Zocalo plans 16-story tower by Sloan’s Lake

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Zocalo
A preliminary rendering of the Zocalo Community Development project by Sloan's Lake, which would include a 16-story condo tower.

Zocalo Community Development plans to build a luxury 16-story condo tower near the increasingly trendy Sloan’s Lake Park.

The energy-efficient and yet unnamed development, with a total of 515,400 square feet, would be built on a parking lot at the former Beth Israel Hospital.

The development also would include an unusually large affordable workforce rental component.

The development at West 17th Avenue and Newton Street is still in its early stages despite being in the works for more than two years.

It is expected to have about 160 condominium units and 160 affordable rental units.

The site includes the Sloan’s Medical Center and is two blocks east of Sloans, the mixed-use development that includes the Lakehouse condo high-rise, rental and for-sale units, offices and the Alamo Drafthouse Cinema – on the site of the former St. Anthony Hospital.

Zocalo
An aerial view of the PUD proposed by Zocalo Community Development that would include a 16-story condo tower

Some of the condos in the Zocalo tower also will be affordable.

“It’s nearly unheard of to have 50 percent or more of the units in a project to be affordable,” said David Zucker, CEO of Zocalo.

“At Zocalo, our mantra is that we want to deliver true mixed-use and mixed-income projects,” Zucker said.

The market-rate units in the condo tower will likely be priced lower than the units in the nearby 12-story Lakehouse condo under construction, Zucker said.

Those units are being sold for about $700 per sf.

“Lakehouse has done a great job of proving the viability in Sloan’s Lake,” Zucker said.

“Ideally, we would like to stay out of their way and be somewhat below their pricing,” Zucker said. “That is being respectful, as well as being practical.”

Zocalo
David Zucker

He expects many of the condo buyers to be people moving out of large suburban homes. Other buyers likely will be millennials living in luxury apartment buildings in Denver.

Economic support from the condo component will allow a high percentage of affordable housing, Zucker said.

The condo tower would be designed by Shears Adkins Rockmore Architects, which also will be the master site plan architect. John Gagnon, principal of JG Architects, will design the workforce, affordable-housing portion of the project.

Zucker began talking to the head of the family trust that has long owned the land more than two years ago. He also began talking to neighbors about a year and half ago. The family trust is contributing the land to the development. Zucker is in discussions with several institutional investors that would serve as an equity partner.

This will be Zocalo’s first condo community in Denver in almost a decade. Since it developed the RiverClay Condos in Jefferson Park in 2009, Zocalo has developed a number of luxury, energy-efficient apartment buildings. Zucker said he believes Zocalo has developed more LEED-certified buildings in Colorado than any other developer. The Sloan’s Lake development will continue Zocalo’s commitment to be  energy-efficient and sustainable, he said.

“We had originally planned it to be one mixed-income rental property” that would have had about 250 units, Zucker said.

Zocalo
A preliminary view of the development proposed by Zocalo Community Development across from Sloan’s Lake

However, a five-story building wrapping a garage “would be architecturally unappealing” and not that different from many other apartment communities being built in Denver, Zucker said.

“It dawned on us that with the site sitting on the edge of the city’s second largest park and its largest lake, this is a tremendously unique site,” Zucker said.

“A five-story wrap multifamily project would be so architecturally pedestrian and prosaic,” Zucker said.

In discussions with neighbors, and like the incredibly successful Pinnacle at City Park South development that was developed by Opus in 2005, Zucker realized it would be better to push the maximum height to the center of the full city-block and lower the height to three-story townhomes along 17th Avenue and Newton Street.

“That way we could put the height in the middle of the project,” farther away from nearby homes, he said.

“We also heard from neighbors that they felt a sprawling, five-story project looming at the edge of the street would feel somewhat overpowering,” Zucker said.

“We wanted to be sensitive to what we heard from a year-and-half of working with neighbors,” Zucker said.

Zocalo
A site plan for Zocalo Community Development’s proposed development by Sloan’s Lake

Yet, registered neighborhood organizations have not so far welcomed the proposed tower.

In February, the Sloan’s Lake Neighborhood Association, for example, issued a resolution opposing the project.

The resolution said the Planned Unit Development proposal calls for “massive density and height,” is “significantly out of context with the context and the character of the surrounding neighborhood” and would add to parking woes and traffic congestion.

Zucker, who historically has forged excellent relationships with neighbors near his development, said he understands the neighbors’ concerns with change.

“I think neighbors by and large feel a sense of sadness of the loss of diversity and affordability in Sloan’s Lake over the last five years,” Zucker said.

“I think those who are more progressive recognize that creating affordability and diversity is different today than it was when the neighborhood was being built 80 years ago,” Zucker said.

“Back then, you created an affordable neighborhood with smaller homes and some stacked flats. The solution to creating affordability today is not the same as it was 80 years ago. “

Without the financial contribution from the condo portion, it would be impossible to have 50 percent or more of the units affordable, he said.

“Where we believe the virtue of the project is in creating 50 percent affordability, some believe the greater virtue should be in less density and more open space,” he said.

Zocalo will be seeking a PUD for the development.

Zucker said he knows the city has discouraged the use of PUDs in recent years.

“If this was a traditional site, with zoning in place,we would probably just seek a rezoning,” Zucker said.

“But this is a historic, existing PUD site. The initial PUD was given in 1959. It was the eighth PUD granted in Denver.”

An amended PUD would allow:

  • Affordable units, including at least six units dedicated to formerly homeless schoolchildren and their families;
  • Market-rate condo units; and
  • Retaining the existing medical office building.

The development also would include up to 12,000 sf of office space for Zocalo Community Development and other office users, and about 5,000 sf of restaurant space and up to 6,000 sf of community-serving retail, leased at no cost for community-serving uses.

The development still needs to go through the city approval process, which requires it to be presented to Denver Planning and Community Development and the City Council.

“The zoning will take the better part of a year to be worked out,” Zucker said.

Zocalo
Shown is the maximum height for the proposed development by Zocalo Community Development that would include a 16-story condo tower.

If all goes well, construction could start on the affordable portion in May or June of 2019, with the condo tower starting sometime after that.

The affordable portion would take about 18 months to build, while the condo tower would take about two years to construct, he said.

If you scratch the surface of just about any deal, there is a story behind it. The Rebchook Real Estate Corner looks at the what and who that make the Colorado commercial real estate industry spin every Tuesday and Thursday online at CREJ.com. The people behind the deals are passionate about what they do, whether they focus on offices, apartments, industrial, retail, land or lending. They also are passionate about their clients. Given the cyclical nature of commercial real estate, those who prosper in it have plenty of stories to tell. I hope to share them with you. 

This column includes news stories, in-depth looks at deals, profiles, Q&As and pieces on the latest trends. Contact John with story tips at [email protected] or 303-945-6865.

If you scratch the surface of just about any deal, there is a story behind it. The Rebchook Real Estate Corner looks at the what and who that make the Colorado commercial real estate industry spin every Tuesday and Thursday online at CREJ.com. The people behind the deals are passionate about what they do, whether they focus on offices, apartments, industrial, retail, land or lending. They also are passionate about their clients. Given the cyclical nature of commercial real estate, those who prosper in it have plenty of stories to tell. I hope to share them with you. 

This column includes news stories, in-depth looks at deals, profiles, Q&As and pieces on the latest trends. Contact John with story tips at [email protected] or 303-945-6865.

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