By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
In 1991, there was a ray of light when Gene Rock managed to unite neighboring property owners behind a proposal to build a 1,074-room Hilton on the block. But existing hoteliers, who believed their businesses would suffer, protested, and Mayor Wellington Webb torpedoed the plan.
It was a puzzle, one nearly 100,000 square feet in size. That's how Makovsky approached Block 162 in the fall of 2005 when he began planning his attack.
"I looked at the ownership on the block and designed a step-by-step acquisition plan that basically said, if I buy property number one and I cannot buy anything else, what can I do with property number one, and if I can only buy property number one and number two, what can I do with that?" he says. "I made a decision to go forward and close on each of these individual pieces knowing what I could do with it or knowing that I could resell the ground to someone else and they could do something with it."
It was an unorthodox strategy. Most financiers refuse to back a development deal piece by piece; they'll provide the money only after every property owner has agreed to sell. But Makovsky's investors, whom he declines to name, were willing to take a risk, confident that he knew what he was doing.
Still, Makovsky says, they had an informal bet going as to whether he'd actually pull it off.
The first piece was easy. The Bank of Denver was already trying to sell its property along Welton Street, where much of the Orpheum Theater once stood. If he couldn't get anything else, Makovsky had a plan for the land. "That parcel was the same square footage as what I had acquired at the corner of 18th and Champa, where I built a parking lot and hotel, the Marriott Residence Inn," he says. "So I knew if I didn't buy anything else, I could at least duplicate a garage and hotel on it."
And dealing with the Bank of Denver's Rock turned out to be refreshingly straightforward. "He was very clear on what he wanted, and it wasn't going to be any different than that. He stuck absolutely to his word on everything he said," Makovsky says.
The admiration was mutual, says Rock: "Evan was fairly straightforward and didn't try to pull all the development tricks that most people try to pull."
"I wish every deal I made was like that," says Makovsky. In the case of Block 162, it wouldn't be.
The next step was the Standish Hotel building on California Street, which the Bank of Denver had used as its headquarters until 2004, when it was sold to Mercy Housing. The non-profit affordable-housing developer had hoped to convert much of the structure into low-income units, but construction costs had skyrocketed and funding had fallen through. The owners were interested in selling, but only if the deal somehow contributed to the organization's mission. Such elements weren't usually the stuff of downtown real-estate transactions, but Makovsky was willing to consider it.
While neither side will reveal the details of their negotiations, RedPeak's Zoellner, who is on Mercy's board of directors, notes that "Evan was creative in structuring a deal to assist the mission of Mercy and at the same time make an economic deal for himself."
And so, in the end, Evan got the building under contract in spring 2006.
With the land he had now, Makovsky could have built a hotel and parking garage on the vacant Orpheum lot and redeveloped the Standish into offices or stores. But he kept going. This was exactly the sort of risky, extended timeline that had scared off developers like Target and Lowe — but Makovsky was willing to be patient.
He next purchased the parking lot between the Standish and the McClintock building from Paradise Cleaners owner Buzz Geller. Like the Dikeous, Geller is a major parking-lot owner, but unlike them, he's always been eager to have his lots redeveloped. "It's a real eyesore," says Geller, who sold his portion of the land for $1.7 million.
Then, to deal with the corner property on California and 15th streets, where a hotel had been torn down to make room for a "temporary" parking lot, Makovsky purchased a third of the land's undivided-interest ownership from a real-estate investor; the other two investors assured Makovsky they wouldn't stand in the way of his plans.
The McClintock building, held by the seventh property ownership group on Block 162, was not needed for Makovsky's redevelopment plan.
That left the Dikeous and the Cooks.
Makovsky can't talk about what happened next, because he signed an agreement swearing not to. He's not allowed to discuss the multi-year negotiations with the Dikeous, for example, or how he tackled the family feud behind the Fontius building. He's also forbidden from revealing the sums of money bandied about, but he admits that the Dikeou holding was the linchpin of his plan all along: "Once all the other pieces fell together, this was the one property that became very important to me.
"There is such a thing as being at the right place at the right time," he adds with a wink. On June 19, the Downtown Denver Partnership publicly trumpeted the news in a press release: "75,000 Square Feet of Contiguous Property in Downtown's Core Changes Hands." Makovsky had acquired nearly every property on the block, including the Colonial. Less than a month later, the partnership announced Makovsky's acquisition of the Fontius building as well.