This week Denver Urban Review sat down with Roy Kline and David Steel, the managing directors of Western Development Group to discuss the progress of their 250 Columbine project and to hear their thoughts on the current state of the Denver market.
The 250 Columbine project is a mixed-use development in Denver's Cherry Creek neighborhood located on the block of 2nd and 3rd Avenue on Columbine Street. The project includes 30,000 square feet of retail space, an 80,000 square foot office building and a for-sale condo project with 71 homes.
DUR: Why did you elect to go with a condo project when so few developers are going that route due to the current construction defects laws?
The office portion of 250 Columbine.
Roy Kline: Our mantra is build it really really well, and warranty it really well, and be a friend to your owners—we are all in this together. With Columbine at the price point we are at, you can afford to have peer reviews, you can afford to have the people double checking and looking over each other's shoulders. We knew that if we build it well enough and protect it, we will be good.
David Steel: You want to stand behind your product. The intent is to live and work here for quite some time. You can ruin your reputation in about three and half seconds unless you stand behind what you do.
DUR: With certain projects there has been an anti-density sentiment around town, did you encounter any resistance or grumpy neighbors with this development (250 Columbine) ?
Roy Kline (left) and David Steel, managing directors of Western Development Group.
David Steel: I don't agree with that. The millennials in particular are driving the live, work, play sentiment and I think that is what everyone wants. But here (Cherry Creek) it is a different demographic, it is a little bit older, but people like it here. It is like a little village and you pretty much have everything you need and you don't have to get in your car if you are working here. We have created a bit of a tailwind and so now what is happening is all these other developers are coming in who have never been here before and try and buy, but they are a little late to the parade and they are going to have to pay a lot of money in land acquisition. Roy and I are always puzzled how they (other developers) can make the prices work with the price of land.
Roy Kline: Initially there was a huge pushback. We went through traffic studies and all sorts of density issues, but we do mixed-use which is super efficient and that is the mantra of the new growth. So when we were approved for the new zoning, everyone voted for us form the staunchest conservative to the greenest liberal and for all these different reasons they all like mixed-use.
DUR: How are the leasing and sales going with the 250 Columbine project?
The residential portion of 250 Columbine nearing completion.
David Steel: From the office perspective, we are moving in our main tenant as we speak and they will begin operating as of next Monday. We have more following in behind that and we are about 85 percent leased. There is a lot of people that want to be here and a lot of people feel they have to be here for business reasons. On the residential side we are at about 85 percent pre-sold. They have all been for cash; we would not accept any kind of financing. It is a different type of demographic. We are at about 70 percent leased on the retail side. There are many amenities with the project, and we list amenities, but the neighborhood is the amenity. You are right here in the heart of all the action and it is a fun place to live.
Roy Kline: We are using an energy efficient heat pump system on the residential side and every unit will have an outdoor space. The views from the western facing units are spectacular.
DUR: You see projections out there that indicate another million people will move to the Denver metro area in the next 20 years. Do you see anything on the horizon that will slow that down?
David Steel: There is always peaks and valleys with these types of things. There could be geopolitical issues on the other side of the world, so who knows. But right now it clearly seems to be the place that everyone wants to come to and live here for all the reasons we live here. There is going to be some constraints in terms of the infrastructure and its ability to handle all of this. We see it now in spades going up to the mountains and on I-25 going from Fort Collins all the way to Colorado Springs. There is just constant traffic and that's what lends itself to more multifamily mixed-use projects, but you can't put ten pounds in a five pound bag. That is what this area (Cherry Creek) struggles with and 60 percent of the traffic is people just passing through on there way to other places. I don't see a trolley system along Speer to downtown coming anytime soon.
Roy Kline: From a quality of life standpoint you can't beat Colorado for weather, for environment, for outdoor activities. There are a ton of employers that get it and as long as the business environment stays positive compared to the coasts, which we all know are imploding just because of how unbelievably difficult they make it to do business there.