Top

news

Stories

 

Trouble Ahead, Trouble Behind

Union Station's past will have a major impact on its future.

The agreement even specifies that if the city alters the zoning and the owners decide to demolish the building, "no further approval shall be required except such approvals as are customarily required to obtain a permit for demolition or alteration of non-historic buildings."

Tom Ragonetti is the Denver attorney who represented the railroads in 1988 and is negotiating for them now with RTD for the sale of the building. He says the agreement was justified since the railroads had to give up significant pieces of property to Denver for the construction of Wewatta Street behind the station, as well as for the extension of the 16th Street Mall and several other streets into the valley.

That's why they demanded the right to do high-density construction on their remaining property. "By the time you looked at all the different things the city wanted, there wasn't much land left to be developed," he says. "In order to enjoy the basic development rights in the Platte Valley, you have to go up. It was just a matter of geometry."

Current city planning director Jennifer Moulton headed up Historic Denver when the 1988 agreement was made, and she doesn't hide her loathing for it. "I hated it then and I hate it now," she says. "We've looked at the agreement every way we can to see if we can undo this. They gave them the right to do this for fifty years. I want to get rid of it and the city wants to get rid of it."

In the end, market realities may make it impossible to ever build the two towers. Amtrak and the residents of LoDo successfully resisted the idea of moving the passenger rails away from the station several years ago. Now, anyone putting up high-rises would have to build over active rail lines, an expensive proposition, Farley says. "There's tremendous cost in building over rail lines. Ever since they decided to keep the tracks there in the early '90s, the development reality of building there was pretty slim. There's plenty of places to build that are easier than that."

But in real estate, zoning is money, and the owners of the station, at least two of them, have claimed in negotiations that their development rights entitle them to top dollar for the property. That means the 1988 agreement has now come back to haunt RTD. Since Denver will also put up a substantial amount of cash in any deal to buy the station, city taxpayers may also have to pay for the decisions made thirteen years ago.

Moulton says she can't fault the owners for claiming the zoning makes their property more valuable; she says if she were in their shoes, she'd make the same claim. "It's a right they have," she says.


Union Station's ownership structure reflects the tangled legacy of the railroads in Denver. The station had always been jointly owned by the railroads that served it, and when the 1988 deal was consummated, there were half a dozen railroads involved. Since that time, a series of mergers has steadily reduced the number of railroads serving Colorado. Those changes in the railroad industry have also changed the ownership of the station.

In 1992, Trillium Corporation, a Bellingham, Washington, timber company and real estate developer, bought the real estate holdings of the Burlington Northern railroad for more than $50 million. Overnight, that made Trillium the largest landholder in the Central Platte Valley and gave it a major stake in Union Station. The next year, reclusive Denver real estate magnate Pat Broe picked up the Santa Fe Railway's share in the station in a deal involving his system of short-line railroads. The only original owner that still has a stake in the station is Union Pacific.

Trillium now owns half the station, Broe has one-sixth, and Union Pacific has a third. Before the station can be sold, all of the parties have to sign off on a deal, and that has been a source of conflict between the owners.

"One of the issues is that we've got owners who don't like each other much," says Moulton. "It makes it difficult to work with them."

Trillium has much at stake. It has been an enthusiastic proponent of the idea for a major transit hub at the station, and it's not hard to see why: Trillium owns the property across the street from the station, on the northwest side of the existing tracks. The company has the right to develop 3.6 million square feet of office space on that ten acres. "With an air train to DIA and light rail coming, it just makes sense that the intermodal facility be there," says Trillium attorney Steve Farber.

Utter worked for Trillium for several years, and she acknowledges that the company has been a longtime booster of the idea. "Trillium always envisioned an intermodal station there; they've been a big advocate of that," she says.

Unfortunately for Trillium, they're partnered with one of the most notoriously difficult developers in Denver. Broe is a legend in local real estate circles for his dedication to squeezing every last dollar out of a deal. He spurned repeated offers to sell the Sugar Building at 16th and Wazee Streets before finally selling the building (and an adjacent parking lot) in 1998 for $5 million, earning a hefty profit on a property he had picked up for just $1.2 million in 1991.

« Previous Page
 |
 
1
 
2
 
3
 
4
 
5
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
Sort: Newest | Oldest
 
Loading...