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Wide Open Spaces: Colorado's New Development Frontier

Tens of Thousands of Acres on Denver's Eastern Edge Wait for Development
August 8, 2018
Gaylord Rockies Resort and Conference Center, a 1,500-room Marriott hotel slated to deliver later this year in Aurora, CO.

Along Colorado’s Front Range, development discussions usually revolve around Denver. But as people and money continue to flow to the area and development options to the north, south and west are limited by topography and other metropolitan areas, the expansive acreage on Denver’s eastern side is primed for growth.

In five large master-planned developments, nearly 20,000 acres of land in various stages of entitlements and platting are ready and waiting to the east of Denver, both within the boundaries of the city of Aurora and in unincorporated Arapahoe County.

These pieces of land are expected to become home to all kinds of projects, from single-family home developments and apartment complexes to large-scale office campuses and hospitality and retail uses. That is, if they can overcome challenges including a lack of infrastructure and developer hesitance.

Denver Mayor Michael Hancock has long sought developments in the eastern part of the city to fill in his vision of an "aerotropolis" near Denver International Airport, known as DIA. The late Aurora mayor Steve Hogan, who died this summer after a battle with cancer, was well-known for saying that his city is "only half built out."

Infrastructure challenges

Aurora is the third-largest city in Colorado by population, and has scattered city limits that cover 154 square miles from County Line Road north to DIA, and from Havana Street east nearly to the eastern plains town of Bennett.

Add to that the undeveloped acreage in Arapahoe and Adams counties, and the eastern part of the Denver metro is a land developer’s paradise.

But the planned developments in the area have been slow to unfold, with land parcels trading hands between developers and end users taking their time building on their properties.

Take, for example, the Porteos development, a 5,000-acre development just south of DIA with zoning that allows for all types of commercial uses.

There, a 169-acre parcel purchased by Walmart Real Estate Business Trust in 2016 has still not seen any development. Walmart’s real estate arm is expected to build an e-commerce distribution center there, but is "having a hard time pulling the trigger on that," according to Yuriy Gorlov, vice president of the Aurora Economic Development Council.

Walmart purchased the acreage two years ago, but has yet to turn over any dirt or submit building plans. The e-commerce center, on which Walmart has been silent, is still expected to happen at some point, Gorlov said.

Other parts of Porteos have attracted attention from international companies, but none have yet decided to buy, aside from a 2006 deal in which parking operator Park DIA purchased 55 acres for airport parking.

Porteos has one important thing going for it that places it a few steps ahead of other master-planned developments in the area - a direct road to DIA.

A&C Properties, the Phoenix-based developer of Porteos, spent $15 million to extend Jackson Gap Road south to meet East 56th Avenue.

That road is one of only two with direct access to DIA, which is a big selling point, according to Bill Wichterman, vice president and general counsel at A&C. The other road, Pena Boulevard, is frequently clogged with travelers going to and from DIA.

The biggest challenge for the developments-in-waiting is infrastructure, Gorlov said.

Beyond roads, the massive acreages need access to power, water, gas and sewer. Government entities do what they can to facilitate the construction of infrastructure, but in the end it becomes incumbent on private companies to front the often formidable cost.

Additionally, Gorlov said, it’s difficult to get companies to envision what the eastern metro could someday be when it’s currently a vast expanse of prairie.

Perhaps the area’s most anticipated development is helping make the idea a bit more real, however.

A more hospitable environment

Gaylord Rockies Resort and Conference Center, a massive 1,500-room Marriott hotel with an adjacent water park, has been very visibly under construction for years and is scheduled to finish later this year.

The hotel already has bookings extending out several years and its presence has helped move conversations forward, Gorlov said.

As with Porteos, Gaylord extended a road through its property. It stretches 64th Avenue to E-470, the toll road that circles around the metropolitan area to DIA.

"Gaylord is attracting attention," Gorlov said. The construction activity alone has been enough to boost activity, but once the development is finished, he expects interest to jump even more.

"We’re going to, I’m sure, see a flurry of development applications once things are up and running," he added.

One project buoyed by its proximity to Gaylord is High Point, a 1,200-acre development just west of the hotel that will include residential uses, schools and open space, along with office, light industrial, retail and hospitality.

The land for High Point was purchased by Glendale developer Westside Investment Partners for $25 million in July 2017, according to a recent presentation by Cushman & Wakefield land broker Mike Kboudi.

Prospering in Arapahoe County

In southeastern Arapahoe County, 5,000 acres of land are making the slog through an entitlement and platting process that will ultimately create the equivalent of an unincorporated town called Prosper.

Prosper’s developer, an entity called Prosper Farms, started accumulating the land for the project in 1999, according to Jeff Vogel of Denver planning and design firm Vogel & Associates, which represents Prosper and is working with Arapahoe County to move it through the planning process.

At full buildout, which isn’t expected for 30 years, Prosper could include as many as 9,000 homes and 8 million square feet of commercial space. The development would initially be funded by private equity, but eventually metropolitan districts would be formed to issue bonds.

Plans for Prosper in its current form first came to light in late 2014, when the proposal went before the Arapahoe Board of County Commissioners. It achieved several necessary approvals, although it irked Aurora City Council members who were concerned about increased traffic and stresses on water systems.

A preliminary development plan for the first phase of Prosper, which is expected to take several years, was approved by Arapahoe County Commissioners last year.

‘Maybe even the new center’

Even larger than Prosper, but with more planning hurdles to clear, is TransPort, a 6,000-acre development near Front Range Airport, DIA’s smaller sibling east of Imboden Road between East 49th and East 56th avenues.

The project changed hands during the recession and like much of the eastern metro area, needs infrastructure.

Similarly, the Aurora Highlands development, floated in 2017 as a 2,900-acre mixed-use project that could one day expand to 5,000 acres, needs access to roads, water and sewer, which Gorlov points to as one of a very small number of challenges between the wide open space to Denver’s east and potentially more than $1 billion worth of development.

Second to infrastructure, he said, are workforce concerns.

The Denver area’s unemployment rate is 2.1 percent, and has hovered in that area for months now, making it increasingly difficult for companies to find workers.

Additionally, rail service in the eastern metro area is sparse. Many conversations are underway about how large campus users can implement shuttle services to help commuters get to work.

Those large campuses are precisely what economic development officials in Aurora are targeting.

"We’re focused on all commercial in that area," Gorlov said. "There will be some mixed-use development, but we want to see the campus users come to us. Rooftops and amenities will follow. Our long-term vision is to create campuses."

And then?

"There will be a new edge of the metro area," Gorlov said. "Maybe we’ll even be the new center."

Molly Armbrister, Denver Market Reporter  CoStar Group   

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