5 things to know about CityCenter foreclosure

Area indirectly controlled by city to see redevelopment

Posted 8/10/18

It's hard to miss the CityCenter Englewood development — it takes up most of the right-hand view on a drive from South Broadway to the west on U.S. Highway 285. Behind the scenes, that landscape …

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5 things to know about CityCenter foreclosure

Area indirectly controlled by city to see redevelopment

Posted

It's hard to miss the CityCenter Englewood development — it takes up most of the right-hand view on a drive from South Broadway to the west on U.S. Highway 285.

Behind the scenes, that landscape may be about to change: A large portion of the property on along the highway changed hands in a foreclosure sale on Aug. 8, and the city is jumping on what it says is an opportunity — “revitalization” is the buzzword — to reimagine the center in a time of nationwide retail decline.

Here are a few things to know about possible changes.

History of CityCenter

The former Cinderella City mall was a sprawling structure once referred to as “the largest mall west of the Mississippi,” according to a Denver Public Library article. Offering more than 1.5 million square feet, it was a main draw for Englewood in the 1970s.

But competition led to a decline, and after a late-1990s demolition, the site was converted into the city's Walmart, other retail and the building that houses city-government offices and the Englewood Public Library.

That area, CityCenter Englewood, stretches roughly from the RTD light-rail tracks to South Elati Street, and between West Hampden and Floyd avenues.

The Englewood Civic Center, the building that holds the city offices and library, is part of the CityCenter development.

What is EEF?

The city created the Englewood Environmental Foundation in the late 1990s to oversee redevelopment of the mall into the CityCenter site. Three City of Englewood officials make up its board of leaders.

The private nonprofit was formed to “shield the city from potential environmental liability” from issues including asbestos and gasoline contamination coming from nearby properties at the time, according to a city fact sheet. Its financial operation is publicly reported as part of the city's published financial statement, the sheet said.

“As it has evolved, the EEF board defers to the city council to review and affirm all of its recommended actions other than minor day-to-day operating decisions,” said Dan Poremba, Englewood's chief redevelopment officer.

Walmart and the apartments at CityCenter are under other ownership, but EEF is the underlying owner of the rest of the property. EEF “ground-leased” that remaining portion to Miller-Weingarten Realty — now just Weingarten — for a term of 75 years, of which 57 remain. Weingarten was the “master developer” that oversaw which retail businesses would occupy the buildings.

The property includes Ross, 24 Hour Fitness and Harbor Freight Tools, among others.

Why foreclosure?

The decline of “brick-and-mortar” stores was just part of what drove the foreclosure, Poremba said.

Weingarten defaulted on a $33 million debt late last year and had no liability for walking away from that debt, according to the city.

“It's really a great blessing in disguise for the city,” Poremba said. “It gives the chance to disrupt what would have been an inevitable downward cycle of that retail.”

Current business' leases are not directly impacted by the foreclosure, and it's expected that the retail tenants will remain in place, Poremba said. It appears that the interim lessee of the former Weingarten property — which oversees it before it fully changes hands — will work to lease current vacancies in preparation for selling the property, Poremba said.

Mixed-use options

Smaller retail, office uses, educational and entertainment sites, and even a hotel are among the possibilities the area could see, Poremba said.

Near the RTD station, more multi-family residential units could be in the mix. City staff and council's preferences for what combination of uses could arise remain to be worked out, Poremba said. The goal is to “revitalize this area on behalf of all of Englewood” and generate significant new tax revenues for the city, he added.

The remaining 57 years of the lease is too short a term for most developers and investors, so it's likely the new buyer would have to discuss with the EEF and city about extending the lease, Poremba said. That's what could give the city a voice in what uses go into the redevelopment — otherwise, it has little say.

Change of space?

The city leases the Englewood Civic Center — a former Foley's department store — from the EEF. Although it's not part of the Weingarten foreclosure, it's likely a new developer would desire to redevelop the civic center for uses like office, hotel and residential, Poremba said.

Such a change would require city council's direction. City Manager Eric Keck has favored the move as a way to save money — staying in the civic center costs about $2.4 million annually — for a city facing steep upcoming infrastructure costs that it's not prepared for.

Since discussions dating back to at least January 2016, some councilmembers have been uneasy with moving Englewood's city hall.

C-III Asset Management is the interim lessee after the foreclosure, but its role is to sell to another company that will succeed Weingarten. When that will occur is unknown, and the city plans to meet with C-III in September.

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