The Lone Tree Golf Club describes itself as "a public country club," and the oxymoron seems entirely fitting. The gabled roof of the 50,000-square-foot clubhouse looms over the fairway, and the club boasts a full-service restaurant and bar, a parquet dance floor, a boardroom, and even suites for overnight visitors. On a sunny afternoon, a group of ladies in bright-green golf shirts emblazoned with the Lone Tree logo sip iced tea and nibble on salads in the restaurant, watching men in khaki trousers tee off on the driving range just outside the window.
Lone Tree looks and acts like a private country club ("Men's Shirts Must Have a Collar" warns one sign) because that's exactly how it started. The club was the centerpiece of an early 1980s real estate development that wrapped hundreds of homes, some selling for as much as $600,000, around a golf course designed by Arnold Palmer. When the club's developer went bankrupt in Denver's end-of-the-decade real estate rout, the South Suburban Park and Recreation District was lucky enough to purchase the golf club for $4.7 million, giving area residents one of the poshest public courses in the country. But Lone Tree's lucky streak is really just beginning. To understand why, all you have to do is look down the fairway toward the northeast.
The golf club sits on a hilltop, and duffers have picture-perfect views of the massive Park Meadows mall now under construction at I-25 and County Line Road. The shiny copper roofs sparkle against the blue sky, and signs are already up for the Nordstrom and Dillard's department stores that will anchor what developers insist is not a mere shopping mall but Colorado's first "retail resort." Across the street from Park Meadows, the Incredible Universe store already has a full parking lot, and a jumble of bulldozers and concrete foundations herald the future homes of superstores like Home Depot, Barnes & Noble and Bed, Bath & Beyond.
This retail explosion, coupled with a bit of wily maneuvering by residents, has given birth to Colorado's newest municipality. And the city of Lone Tree, which will hold its first city council election next month, will soon be one of the richest. The enclave takes up little more than one square mile and is home to just 2,500 people. But Lone Tree has a retail bonanza at its doorstep. The tiny city is poised to collect millions of dollars in sales tax from the thousands of metro residents who will come to shop in the area. Residents can expect to see their property taxes slashed as the sales-tax revenue pours in. And that will be just the beginning of Lone Tree's good fortune.
The city's neighborhoods will likely be among the safest in the metro area, as five full-time police officers patrol two dozen quiet streets. Hundreds of new trees and shrubs will shade those boulevards, as lavish landscaping goes in on residential streets and along County Line Road, Yosemite Street and C-470. Welcome signs with a distinctive Lone Tree logo will greet the public, and elaborate fountains will splash in the summer sun at major intersections.
If Lone Tree's founders have their way, the city will no longer be a semi-obscure subdivision on the south side of County Line Road. Instead, it will take its rightful place as one of the Denver area's premier destinations. "I'd love to be in a position where this community is not looked at as just another suburban community," says Kevin Maiman, an activist in the incorporation effort who is now running for city treasurer. "The [elite] communities that are successful, like Beverly Hills or Seaside, Florida, have an established image. There's all sorts of things we can do to make Lone Tree a place you recognize on the map."
Boosters of the incorporation campaign told Lone Tree voters last November that the new city could collect $1.8 million a year by assessing a 1.5 percent sales tax. Those estimates were based on sales at existing stores within the city limits, including Incredible Universe, Sam's Club and Denver Sports. When Barnes & Noble, Pier 1, Home Depot, Bed, Bath & Beyond and several other stores open this fall, Lone Tree revenues will skyrocket.
So far, the Hahn Company, the developer of Park Meadows, has refused to allow its shiny new mall to be annexed into Lone Tree. But if town officials can change Hahn's mind--and they plan to try--they'll truly hit the mother lode. With projected sales of $300 million in the first year, the 1.5 million-square-foot mall could be raking in as much as $400 million a year by the turn of the century. Foley's and Joslins will open at Park Meadows next year, and J.C. Penney and Macy's are both rumored to be in discussions with Hahn about going into the mall. If Park Meadows is ever brought inside the town boundary, Lone Tree might collect as much as $6 million per year in additional sales-tax revenue.
Park Meadows is expected to draw shoppers from all over Colorado as well as neighboring states such as Wyoming and New Mexico. Many of those consumers will also patronize the superstores in Lone Tree, across Yosemite Street from the mall. That means the people paying Lone Tree's bills will almost entirely be residents of other communities. "The people shopping in the stores are the ones paying the sales tax," says Maiman, clearly buoyed by the prospect. "The tax burden goes to a different source than Lone Tree residents."
But Maiman and the other Lone Tree founders say it's only right that they should benefit from all the commercial development. After all, they say, they will bear a burden as thousands of cars stream along the edge of their neighborhood and the once laid-back area along County Line Road is transformed into a retail mecca to rival Cherry Creek. "We are lucky," says Maiman. "But those businesses came to our doorstep. People will be driving on our roads, and there's a criminal element that comes with that development.
"We have a unique opportunity here," he adds. "It's not being selfish. We're a small area with a group of people who've worked diligently to see this thing through from start to finish."
If a historian ever sits down and writes up the saga of the city of Lone Tree, Jane Staebell will be the story's Martha Washington. A young wife and mother who favors floral prints and sandals, Staebell has worked hard for the past two years to bring Colorado's newest city into being. Like Lone Tree's other founders, she wants the area to be more than just another suburban subdivision, and she hopes that fistfuls of sales-tax dollars will buy Lone Tree an identity it's been missing.
"There's been a lack of cohesiveness," she says. "In the residential area of Lone Tree, we have thirteen or fourteen homeowners' associations. There are medians with landscaping that haven't been maintained. There needs to be some sort of plan for the retail area instead of a hodgepodge. With a city, you can address those issues."
Lone Tree's boundaries stretch only from County Line Road on the north to East Lincoln Avenue on the south, and from Highlands Ranch on the west to South Yosemite Street on the east. But like many residents, Staebell often compares Lone Tree with its huge next-door neighbor.
Lone Tree denizens sometimes see their community as a stray cat that lives next to a development dragon. Whereas Lone Tree was developed in pieces by developers who came and went, Highlands Ranch has a master plan that gives the huge project--now home to 35,000 people--a feeling of order and symmetry Lone Tree residents envy. "Highlands Ranch is huge, but it all looks nice," says Staebell.
But smallness has its virtues. Staebell and others who pushed for cityhood were able to hold dozens of intimate meetings with Lone Tree residents, getting to know their neighbors as well as any big-city ward heeler. Initially, most homeowners were skeptical of the virtues of incorporation, believing it would simply add another layer of government. Staebell and her fellow activists asked residents to hold their tongues while they made presentations. "During the meetings, we wouldn't let people talk until they'd heard the whole thing," she says. "Once we put the pieces together, it all fell into place. It's all very logical once you get it all put together."
Last November residents voted in favor of incorporation by a margin of 676 to 165. Creation of the new city government was delayed when Tandy Corporation, owner of Incredible Universe, filed suit in December, challenging the election on procedural grounds. Tandy feared that a higher sales tax might hurt sales of big-ticket items at Incredible Universe. Douglas County District Judge Tom Curry threw out most of the Tandy suit in January but said the city founders had erred by publishing a notice of the charter election in the Rocky Mountain News instead of in a Douglas County newspaper. Because of that ruling, which delayed the first municipal election until June 4, Lone Tree for now is a city without a city government.
Most of the elected offices will be filled without opposition next month. Staebell is unopposed for one of just two city council seats, as are mayoral candidate Jack O'Boyle and treasurer candidate Kevin Maiman. The only contested offices will be for city clerk and the other council seat. The new city council will quickly propose a 1.5 percent sales tax, which residents will have to okay in next November's general election.
Lone Tree's existence is all about taxes, but it was the voters' rejection of another tax that helped bring the city into being. After first proposing to build a new mall in 1993, Hahn asked voters in the Park Meadows Metropolitan District to approve $12 million in bonds for road construction around the shopping center. Lone Tree is included within the boundaries of the district, which maintains roads and provides other basic services for several subdivisions in the area. Staebell says it was Hahn that first floated the idea of creating a new city surrounding the mall, a concept the developer introduced while campaigning for the bond issue.
District voters defeated the bond proposal by a 2-to-1 ratio in November 1993. But Staebell says she believed a new mall would benefit the area, helping to transform Lone Tree's image the same way the Cherry Creek shopping center turned Cherry Creek North into one of Denver's most fashionable addresses. She and others decided that creating a city would be the best way to pay for Hahn's infrastructure, she recalls. "We started doing various scenarios with the mall included. It was very viable."
But Hahn, fearing rival proposals for new regional malls, was in a hurry to break ground. The company raised the money for the infrastructure costs privately and will pay off its debt by assessing a 1 percent fee on all purchases at the mall.
Still, the temptation of cityhood proved hard to resist. Lone Tree residents watched while barren land that had gone unnoticed for years was suddenly snatched up by developers eager to put up "category killer" stores across the street from Park Meadows. Some of that property had once been owned by notorious ex-Denver real estate operators Bill Walters and Ken Good, who played a key role in the $1 billion collapse of the Silverado thrift. Many Lone Tree residents had already lived through one real estate boom and bust, and they recognized a new boom when they saw it. As each new project was announced, Staebell and her friends estimated the sales tax that would be generated and soon realized there would be more than enough to support a small city, even without Park Meadows. "Once we saw something coming out of the ground, we put the sales-tax projections into what we needed for revenues," she says.
By last summer, the residents were ready to make their civic dream come true. In August, sixty people carried petitions door to door down the drowsy streets of Lone Tree, asking for signatures to put the incorporation proposal on the ballot. The campaign stressed that cityhood could be paid for with taxes paid by other people. The persistence of the activists was rewarded in November, when they garnered almost 80 percent of the vote.
Lone Tree's founders insist they're not interested in creating a new bureaucracy. The five new police officers patrolling Lone Tree will be Douglas County sheriff's deputies under contract with the town. The county will also continue to provide zoning and planning services. Lone Tree's roads will still be maintained by the Park Meadows Metropolitan District.
But the city's residents will see payoffs other residents of the county can only dream of. The first will come when the $100 annual charge the owner of a $200,000 home in Lone Tree is now assessed for law enforcement is eliminated next year. (In affluent Lone Tree, few houses are worth less than $200,000--and several are worth $1 million.) When the proposed sales tax goes into effect next January, Maiman says, Lone Tree will have annual revenues of $1.5 million to $2 million. And he says that forecast is on the low side. "We chose to be conservative," notes Maiman. "If anything, we underestimated revenues."
As soon as those revenues start streaming in, Lone Tree will likely surpass Glendale as the metro-area city that collects the most sales tax per resident. Ski-resort towns like Breckenridge are tops in the state in per capita sales-tax collection, according to figures provided by the Colorado Municipal League. That Summit County town draws more than $2,250 per resident. But on the local front, Lone Tree is expected to easily surpass the $510 per resident Glendale now collects from its own string of big-box retailers along Colorado Boulevard. Surprisingly, the former mayor of Glendale is a critic of small cities like Lone Tree being formed to collect sales-tax revenue.
"It's not illegal, but it smacks of abuse," says Steve Ward, who is now running for Arapahoe County commissioner. "Theoretically, when you annex land into a city, there should be a reason you do it. I think revenue-driven annexations drive cynicism toward government. People can form the size cities and towns they want to, but we could use some stronger guidelines in terms of where people are allowed to annex." Ward adds that he's also critical of the way Glendale was laid out thirty years ago; the city takes up about one square mile and is entirely surrounded by Denver.
But Lone Tree's civic pioneers say they are simply taking advantage of a rare chance to improve their community. If Lone Tree hadn't become a city, they believe Littleton or Greenwood Village--or a yet-to-be-created city of Highlands Ranch--would have annexed the commercial area along County Line Road. "All Highlands Ranch would have had to do is look east, and Greenwood Village is making efforts to come south to County Line Road," says Staebell. "If Highlands Ranch had taken that area, they wouldn't have included the residential areas. They would have taken the money, and we'd have the same traffic and zoning problems."
Since the city council hasn't taken office yet and sales-tax collections can't begin until next year, no decisions have been made about what to do with Lone Tree's bounty. But there are plenty of ideas.
When voting for incorporation, "most people looked at the quality-of-life issues, with law enforcement and landscaping the streets," says Staebell. "Douglas County is really stretched thin. They don't have the money to pay for those things." Staebell hopes Lone Tree will rebuild certain streets and landscape major thoroughfares. "Projects in the future may be some improvements along C-470," she adds. "There's little to no landscaping. When you drive through a place like Greenwood Village, it has lots of trees. That's one of the areas we'll look at."
Other possibilities include property-tax rebates and refunds to Lone Tree residents for the sales tax they pay on purchases at stores within the city. Free trash pickup and vouchers for golf and swimming at the Lone Tree Golf Club are also under discussion. Staebell would like to see some kind of architectural review board to make sure new commercial development is well-designed. Maiman envisions new signs greeting visitors at the city limits, outdoor fountains, and a public festival that could be held on Arbor Day.
"There's a lot of events that could draw people here for other things than just shopping," Maiman says. "We'd love to have this as a destination for people from Denver and Colorado Springs."
The retailers who'll help pay for this municipal extravaganza seem resigned to the higher sales taxes that will fund the city of Lone Tree. Even Incredible Universe, having failed in its legal effort to fell Lone Tree, apparently has decided that the retail chain reaction now transforming County Line Road will bring in so many new customers that few will notice the higher sales-tax levies. "With all of the building going on around here and the traffic, the sales tax will have a very minimal effect," says Skip Dwyer, general manager of Incredible Universe. "The sales tax will still be lower than in 95 percent of the area."
Once Lone Tree voters approve the 1.5 percent municipal sales tax next fall, the total sales-tax rate in the city will be 5.5 percent. That's less than the 6.8 percent rate in Littleton, 8 percent in Aurora and 7.3 percent in Denver. On the other side of Yosemite, sales tax in the Park Meadows mall in unincorporated Douglas County will be just 4 percent, but that doesn't include the 1 percent surcharge Hahn will tack on to every purchase to pay off the debt it took on to build roads to the shopping center.
The players in Lone Tree's new city government are still hoping they can win Hahn over and get the company's consent to annex Park Meadows. Hosting a regional shopping mall--and garnering millions in new tax revenue--is every city's fondest dream. State law, however, says that a piece of property over forty acres can't be annexed without the permission of the property owner. "There's always been a hope of ours that at some point in time we could negotiate with them to come into Lone Tree," Staebell says. "We could take over some of their infrastructure debt. There could be benefits to both sides."
At the moment, Hahn isn't interested. Company executives say Douglas County is taking care of their needs, and the mall would have little to gain from signing on with Lone Tree. "Throughout the development of the property, we've worked so well with Douglas County," says Pam Schenck, general manager of Park Meadows. But Schenck adds that, whether or not the giant mall does a deal with Lone Tree, it will benefit the community by serving as a buffer between residents and the interstate.
While there's every indication Park Meadows will be successful, the history of some other regional malls shows how one decade's retail star can turn into another era's black hole. Cinderella City in Englewood and the Northglenn Mall were once retail hothouses, drawing shoppers from all over metro Denver. Today both shopping centers have been reduced to mostly empty hulks, and the cities of Englewood and Northglenn have suffered from the loss of sales-tax revenue. Both are now struggling to come up with redevelopment plans for the malls.
Staebell is confident Lone Tree won't ever face those problems, even though its superstores will be dependent on Park Meadows to draw shoppers. "Cinderella City was never at a prime location," she says. "It was never easy to get to." Lone Tree is also in an area of town "that has a higher socioeconomic base than Cinderella City had," Staebell notes. "I just don't see this mall having the problems they did."
But predicting the fate of a mall twenty years down the road is virtually impossible. Englewood, for instance, was once convinced it would have a perpetual money machine with its now-empty regional mall. "Every mall has a date of obsolescence, and no mall is immune from that," says Eileen Byrne, a Denver retail consultant who has advised local cities on how to revive dying malls. "Cinderella City was a prime location in its day. In 25 years, any number of things could change. The southeast could become too congested and people won't want to live there. But Park Meadows is designed perfectly for today's market needs."
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For now, Lone Tree's financial future looks secure, to say the least. But the city will still face the eternal suburban challenge: the struggle simply to be noticed by one's neighbors. Schenck recently bought a home on the golf course in Lone Tree and says she found out firsthand just how far the town has to go before it has some name recognition in metro Denver. "It's my perception that unless you live in Lone Tree, you don't really know that it exists," she says. "When I registered at my church under Lone Tree, they called me back and said, 'It has to say Littleton.' I said, 'I think it can say Lone Tree or Littleton,' but they said, 'It has to say Littleton.'" Lone Tree only recently got permission from the post office for its residents to use the town name in their mailing addresses.
But Lone Tree's civic boosters are hoping the town's obscurity will soon be a thing of the past. Plans are already in the works for T-shirts and baseball caps with a Lone Tree logo that proudly proclaims Lone Tree as "Colorado's newest city." Maiman wants to work with Lone Tree's retailers to market the area to shoppers. "We're at the intersection of I-25, C-470 and County Line Road. You can't beat the location." Indeed, even as many Coloradans deplore the suburban sprawl now spreading through Douglas County, Maiman celebrates Lone Tree's geographical good fortune. "There's no place in the metro area with more explosive growth in such a concentrated area," he says.
Maiman moved to Lone Tree a year ago from Texas, and he and his wife took an immediate liking to the place. "Our realtor showed us around," he says. "We looked at everything from Cherry Creek south. We saw our house and fell in love with it. The Park Meadows mall was under construction; that was all we knew."
As for that mall, which for now will continue to sit, siren-like, just out of reach of Lone Tree's tax collectors, Maiman waxes philosophical. "You can take it two ways. You can say, 'That's a big mall and I don't want to be near it,' or 'That's an opportunity we can take advantage of,'" he says. "Some communities would love to be able to do that but can't. We have an opportunity here, and people are excited about it.