Sandwiched between a small brick building and a larger apartment complex along a light rail line is 3030 Welton St., where a local developer is considering building apartments. (Matt Geiger/BusinessDen)
Mainspring has been figuring out what to do with its tiny 4,200-square-foot lot in Five Points for the better part of eight years.
The local development firm submitted plans to the city Monday for a four-story, 22-unit income-restricted apartment building at 3030 Welton St. — a lot that Mainspring CEO Andy Schlauch calls “oddly shaped.”
“There’s frontage along an RTD line along Welton, which makes it difficult to underwrite any project, which is one of the reasons it has taken us a while to determine the best path forward,” Schlauch said.
“It hampers construction in particular. We can’t ever block that or access Welton during the construction process.”
When Mainspring, founded by Fiona Arnold, bought the site for $366,000 in 2017, “micro residential” or a hostel were considered. Back then, the company had recently finished developing the RiNo retail complex Backyard on Blake.
Fast forward to early 2020, and the company was set to break ground on Cabarita House, a five-story hostel with a funky layout — a bar and lobby on the top floor with retail on the ground level.
“We scrapped the hostel plans when Covid hit … Ever since then, it’s been trying to explore what’s the highest and best use for the property — for the neighborhood, the site and for us,” Schluach said.
That highest and best use, he now believes, is actually in lower-density housing.
Technically, Mainspring could build up to seven stories on the lot. The site is zoned for five and income-restricted housing incentives allow for additional height.
But each additional floor adds new complications, like a required elevator with a power generator or the need to use a tower crane, Schlauch said. And because the site is so small, it’s impossible to spread out those added costs over enough units to make the math work.
And financing the project won’t necessarily be easy either. Many income-restricted developments are funded by federal and/or state low-income housing tax credits, but Schlauch doubts he could land them.
“I think because of the high demand for tax credits in the state, it would be very difficult for us to obtain those … Tax credit markets these days are so competitive that you really need services or wraparound services that go with your project,” Schlauch said.
Equity for the project would likely come from nonprofits and philanthropic organizations with “mission-driven capital,” he said.
What about buying adjacent land to create a bigger development site? Schlauch said he’s tried that, too. Adjacent to his property, at the corner of Downing and Welton, sits a tiny neglected brick building on a 1,700-square-foot lot.
“We have tried to reach the owner of that lot many times and have not had any success,” he said.
The building directly to the north of the 3030 Welton St. lot. (Matt Geiger/BusinessDen)
Given all the complicating factors, Schluach emphasized that the proposal he sent to the city is just to see if building onsite is feasible.
“We’re trying to get a better understanding of what the requirements are going to be from RTD and all the various agencies that have authority over development in Denver so we can figure out if we can make it work economically, given those constraints,” he said.
In the meantime, the property is listed for sale for $495,000 by Joey Gargotto, broker at NAI Shames Makovsky.
“We’ve talked to residential developers, we’ve talked to affordable developers, we’ve also thought there might be an opportunity for a small commercial building, like a small restaurant … or an owner/user office space,” Gargotto said.
“Our marketing has attempted to try to pull from each of those categories. The most interest we’ve seen is on the residential and affordable side.”
The site on the edge of Five Points sits a block away from the 30th and Downing light rail station. Next door to Mainspring’s Welton property is Charity’s House, a 36-unit apartment building completed in 2023 for those making less than 30 percent of the area median income. A block away, local firm Shanahan Development is building a six-story, income-restricted condo project.
Mainspring, meanwhile, last year finished renovating a midcentury office building in Uptown.
Sandwiched between a small brick building and a larger apartment complex along a light rail line is 3030 Welton St., where a local developer is considering building apartments. (Matt Geiger/BusinessDen)
Mainspring has been figuring out what to do with its tiny 4,200-square-foot lot in Five Points for the better part of eight years.
The local development firm submitted plans to the city Monday for a four-story, 22-unit income-restricted apartment building at 3030 Welton St. — a lot that Mainspring CEO Andy Schlauch calls “oddly shaped.”
“There’s frontage along an RTD line along Welton, which makes it difficult to underwrite any project, which is one of the reasons it has taken us a while to determine the best path forward,” Schlauch said.
“It hampers construction in particular. We can’t ever block that or access Welton during the construction process.”
When Mainspring, founded by Fiona Arnold, bought the site for $366,000 in 2017, “micro residential” or a hostel were considered. Back then, the company had recently finished developing the RiNo retail complex Backyard on Blake.
Fast forward to early 2020, and the company was set to break ground on Cabarita House, a five-story hostel with a funky layout — a bar and lobby on the top floor with retail on the ground level.
“We scrapped the hostel plans when Covid hit … Ever since then, it’s been trying to explore what’s the highest and best use for the property — for the neighborhood, the site and for us,” Schluach said.
That highest and best use, he now believes, is actually in lower-density housing.
Technically, Mainspring could build up to seven stories on the lot. The site is zoned for five and income-restricted housing incentives allow for additional height.
But each additional floor adds new complications, like a required elevator with a power generator or the need to use a tower crane, Schlauch said. And because the site is so small, it’s impossible to spread out those added costs over enough units to make the math work.
And financing the project won’t necessarily be easy either. Many income-restricted developments are funded by federal and/or state low-income housing tax credits, but Schlauch doubts he could land them.
“I think because of the high demand for tax credits in the state, it would be very difficult for us to obtain those … Tax credit markets these days are so competitive that you really need services or wraparound services that go with your project,” Schlauch said.
Equity for the project would likely come from nonprofits and philanthropic organizations with “mission-driven capital,” he said.
What about buying adjacent land to create a bigger development site? Schlauch said he’s tried that, too. Adjacent to his property, at the corner of Downing and Welton, sits a tiny neglected brick building on a 1,700-square-foot lot.
“We have tried to reach the owner of that lot many times and have not had any success,” he said.
The building directly to the north of the 3030 Welton St. lot. (Matt Geiger/BusinessDen)
Given all the complicating factors, Schluach emphasized that the proposal he sent to the city is just to see if building onsite is feasible.
“We’re trying to get a better understanding of what the requirements are going to be from RTD and all the various agencies that have authority over development in Denver so we can figure out if we can make it work economically, given those constraints,” he said.
In the meantime, the property is listed for sale for $495,000 by Joey Gargotto, broker at NAI Shames Makovsky.
“We’ve talked to residential developers, we’ve talked to affordable developers, we’ve also thought there might be an opportunity for a small commercial building, like a small restaurant … or an owner/user office space,” Gargotto said.
“Our marketing has attempted to try to pull from each of those categories. The most interest we’ve seen is on the residential and affordable side.”
The site on the edge of Five Points sits a block away from the 30th and Downing light rail station. Next door to Mainspring’s Welton property is Charity’s House, a 36-unit apartment building completed in 2023 for those making less than 30 percent of the area median income. A block away, local firm Shanahan Development is building a six-story, income-restricted condo project.
Mainspring, meanwhile, last year finished renovating a midcentury office building in Uptown.
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