A complicated, five-party agreement has been reached that will allow full development of Stapleton’s last large parcel to proceed. The so-called “five-party finance proposal” awaits formal Denver City Council approval and is scheduled for a final vote on April 10. At a Finance and Governance Committee meeting March 21, councilmembers indicated their support. The other parties to the agreement have already signed on: Forest City, Denver Public Schools (DPS), the Denver Urban Renewal Authority (DURA) and the Park Creek Metropolitan District (PCMD).
The agreement addresses “trunk infrastructure” required to allow development of the entire Section 10, the nearly square-mile parcel located north of 56th Ave. between Central Park Blvd. and Havana St. (extended). Currently, residential development is occurring on the western third of the site. The required improvements include grading and drainage ($7 million), completion of trunk open space improvements ($12.5 million) and a fire station ($9.4 million).
These are among a slew of infrastructure projects identified in the earliest days of Stapleton redevelopment for which there was inadequate funding. See below for a listing of these projects totaling $51.8 million. The agreement does not address the second- and third-tier projects shown in the graphic. However, with agreement reached on the fire station and trunk open space, full build-out of Section 10 and its estimated 2,800 dwelling units can proceed. The agreement also allows DPS to finance its acquisition of a second elementary school site in Section 10.
Key features of the agreement include:
Forest City will impose homebuilder fees on Section 10 home sites to ensure $12.5 million is available to finish improvements to pay for trunk open space in Section 10. (Forest City declined to provide any details about those fees, saying they “involve an agreement between Forest City and our builders”). Total earth-moving and drainage improvements in Section 10 are relatively high because of a long-standing agreement with the federal government that stormwater drainage would be contained on-site and not flow onto the Rocky Mountain Arsenal National Wildlife Refuge, formerly a contaminated Superfund site.
DPS will use certificates of participation (COPs) to finance $16.45 million of public infrastructure including the North Fire Station ($9.4) and the school site acquisition ($7.05 million).
Forest City will apply all acquisition proceeds from the DPS site to grading and drainage of the site. DURA will agree to repay from future tax increment revenue (TIF) the DPS COPs and, by 2025, the city’s 2017 budgeted expense of $8.4 million for the widening of the Central Park Blvd. bridge. That project is slated to begin late this fall with an expected construction duration of one year. The widened bridge will be built by the PCMD, the special district created to oversee construction of trunk infrastructure throughout Stapleton. This repayment of Denver’s up-front payment for the bridge widening is consistent with one of the fundamental assumptions about Stapleton redevelopment—that it would pay for itself. The five-way agreement also lowers financing costs for the infrastructure because it takes advantage of public agency borrowing costs (2.5-3.5%) rather than having to rely on Forest City “advances,” i.e., loans (8.5-10%).