"I at least thought we were going to get a couple of down votes," says Eric Rieken, one of hundreds of residents who packed a Westminster City Council meeting to protest a proposed 200,000-square-foot Wal-Mart Supercenter. "But they pretty much discounted everything we said."
Like many newcomers to Colorado, Rieken and his wife were drawn by the allure of openness. But in the rapidly developing northern periphery of Denver, Rieken is unsure how long that vision will last.
After Rieken, a computer programmer, landed a job at a GIS mapping software firm three years ago, he and his wife began searching for a house that was not only near open space, but close enough to Interlocken office park that the commute would be no more than 45 minutes. They settled on Broomfield. In his free time, Rieken, who has the tall, wiry frame of a long-distance runner, trains for marathons and also enjoys biking and extended day hikes -- activities that weren't as accessible in San Antonio, his former home. It was a pleasant-enough city, Rieken insists, but it didn't have the same commitment to the natural landscape that he found in the Denver area. The tenth-largest city in the nation, San Antonio has only seven cumulative miles of trails, "while the small town of Broomfield has 43 miles of trails," he says. "So you could immediately tell what people value just by something that simple."
The Riekens chose a house in a new development at 136th Avenue and Zuni Street adjacent to hundreds of acres of farmland, a welcome break from the disorienting uniformity of strip malls that had been built to the south in recent years. "Neither of us are 100 percent into suburbia," Rieken says. "But if you have to have suburbia to be close to work, then having those gaps of open farmland is great."
But what incoming residents often perceive to be a solid reminder of Colorado's rural roots, developers and property owners may regard as underutilized ground cover. Unless the land has been designated as "open space" (which, by definition, is land removed from the market and therefore closed to new growth) by some official entity, that piece of earth is just one annexation or zoning change away from being developed -- and all the plants, creatures and unobstructed views on top of it from disappearing. And in the northern metro area, one of the fastest-growing regions in the nation, empty real estate is rapidly filling up. The Colorado Department of Local Affairs estimates that growth in the three-county -- Broomfield, Adams and Weld -- area will increase by 58 percent by 2020, for an additional 100,000 people. So even as Rieken complains about new developments, he's painfully aware of his own complicity in destroying the very thing that inspired him to move here.
"I'm the first one to admit that I'm part of the problem," he says. "I came from another area, and my wife and I plopped down here in suburbia in a new development. So I can't complain when other people are making the same kinds of decisions. I understand growth. I just think that city planners should plan. There's a big disconnect."
That disconnect has been very evident over the past year, as anti-Wal-Mart citizen groups protested before city councils across the northern suburbs. When Rieken spoke in opposition to a proposed Wal-Mart at 136th Avenue and I-25, he presented a stack of petitions with 2,836 signatures that he and other volunteers had collected at a nearby Safeway. While people had varying reasons for opposing the project, Rieken smartly centered his argument on issues that he knew the Westminster council could actually take into consideration, land-use questions like noise, traffic and the project's appropriateness for the site. This new store would abut a gravel trail system that the city maintains along Big Dry Creek, where Rieken jogs. Why would the city want to ruin one of its prize attributes, he asked, when it's made such a commitment to open space in the past?
Despite Rieken's best efforts, the Wal-Mart project -- which had moved to Westminster after Thornton blocked a proposed store across the highway -- was approved unanimously by the council. Wal-Mart already has five stores in the northern Denver region, and now approved plans for two more -- which would give the north metro area a Wal-Mart roughly every five square miles. But two anti-Wal-Mart measures are going to the voters November 1, and rumors about two more possible Wal-Marts have people on edge.
If residents of the northern suburbs are truly concerned about growth in the region, however, they need to look beyond big, bad Wal-Mart. Because those stores are just a drop in the development bucket.
At the intersection of I-25 and Colorado 7, where Broomfield and Thornton meet, two huge regional retail projects are in the works. On the Thornton side is Larkridge, slated to open October 20 and set to become the largest retail development in Colorado. Billing itself as a "regional power center," Larkridge boasts a commercial area that, when finally built out, will be 240 acres, the equivalent of 180 football fields, with two million square feet of shopping space (400,000 more square feet than at Park Meadows, the state's largest indoor mall). Already open are Sears Grand, Circuit City, Home Depot, PetsMart, Office Max, Dick's Sporting Goods, Pier 1 Imports and dozens of other chain stores and restaurants.
Right across I-25 in Broomfield, three major projects are planned, says planning director Terrance Ware: the 120-acre Northlands, with 1.1 million square feet of retail space; the 2,700-acre Anthem, with a mix of 11,000 housing units, retail and an office park; and the 75-acre Palisade Park development, which will include yet more retail. Five miles south on I-25, at 144th Avenue, Forest City has broken ground on a mixed-use "shopping village" in Westminster that will put 500 residential units on a pad with 900,000 square feet of shopping, including a Foley's, a JC Penney, a twelve-screen AMC megaplex and a Super Target. Certain characteristics make the northern Denver area appealing to developers, Ware says, including cheap land, flat topography and, most important, secure water rights.
The exploding development has Rieken worried. "It's going to have a huge impact on us," he says. "My ability to hop on a bike and escape to the north is going bye-bye. And that makes me feel a lot more claustrophobic." But all those trails and the open space that Rieken loves so much -- that convince him and other potential homebuyers to settle somewhere -- cost money to purchase and preserve. In order to keep their budgets healthy, municipalities need a wide sales-tax base. The town that has the next big regional mall project on its side of the fence reaps the revenue, while the town across the highway has to find another way to pay for all the increased infrastructure associated with new growth.
With another new mall, perhaps.
As retail projects continue gobbling prairie to the north, they leave behind aging malls that were once considered economic boons, and now become economic bombs.
"Anyone call my phone?" a hulking guy in his mid-twenties asks into the tiny cell phone pressed into his ear. He's wearing an oversized basketball jersey, and his hair is pulled into cornrows. "Just check my fucking phone, a'ight?"
He hangs up; he's in a bad mood. But as he and his crew of bad boys with eyebrow piercings, neck tattoos and rat tails saunter past the Disney Store and the Orange Julius stand, he brightens up when one suggests hitting up Foot Locker. "I want to check out some new kicks," he mutters.
Westminster Mall has seen dramatic changes in recent years -- the most conspicuous its changing clientele. There are many more minority shoppers than you would have found here a decade ago, reflecting the demographic shift in the surrounding neighborhoods. Not everyone is decked out in thuggery, though, and there's a fairly even mix of teenagers, seniors and young families.
Westminster Mall opened in 1977 at Sheridan Boulevard and the Boulder Turnpike, at what was then the city's edge. It started with a Joslin's and thirty smaller stores; after a major expansion in 1986, it grew to include four more anchors: Foley's, Broadway Southwest, Mervyn's and JC Penney. Like many suburban communities, Westminster lacked a downtown or any other pedestrian-friendly gathering place, so the mall quickly assumed this role by default, if not by design. Its layout was similar to other enclosed malls of the era, with smaller businesses lining the long arteries that ran between the big department stores. Residents would stroll its long hallways on weekends, while teens lingered in the arcade and hung out in the food court. The mall's trademark hot-air balloons rose and fell in the central court area above a fountain series of wide stairsteps that generations of sugar-fueled kids darted across.
From the moment it opened, Westminster Mall began drawing customers away from Northglenn Mall, six miles to the east. Northglenn had gotten its start in the early '60s as a development of 3,000 single-family homes near the intersection of 104th Avenue and I-25, the first large-scale project by Jordon Perlmutter, then operating as Perl-Mack Co. In 1962, Life magazine proclaimed it "the most perfectly planned community in America"; one of its main features was the regional shopping complex planned at the center. The area incorporated as a city in 1969, and the recently opened "North Glenn Mall" provided as much as 45 percent of the city's sales-tax revenue, but that dropped after the Westminster Mall opened and shoppers headed off to greener pastures. In 1997, with only 20 percent of its space leased, the mall's sales-tax contribution to the city fell to a meager 7 percent.
Other early metro-area malls suffered the same fate. But dead malls don't disappear; they linger on as monumental eyesores that blight neighborhoods. At one point, Englewood's 65-acre Cinderella City was the biggest mall west of the Mississippi; it was finally demolished in 2000 after a decade of pitiful deterioration, and the area has since been turned into a mixed-use mini-downtown. Lakewood's Villa Italia Mall fell to the wrecking ball in 2002.
Dolores Hayden, a professor of architecture at Yale University, has written numerous books examining the often-ignored history of America's suburbs. This omission is strange, she points out, since "most Americans live in suburbs these days, not in inner cities or rural areas." In Building Suburbia: Green Fields and Urban Growth 1820-2000, she outlines the evolution of single-family housing from the street-car suburbs of the late 1800s to the mass-produced, post-war "sitcom suburbs." One of the critical developments in the creation of modern-day suburbs and, in particular, modern-day malls was the gradual change in tax codes between 1954 and 1986 to include accelerated depreciation for commercial properties, she says. Basically, this accounting trick meant that instead of assuming a property built on a previously undeveloped site had a life of thirty or forty years, you could assume it only had a life of seven years. "It meant that you could have losses -- tax losses, paper losses -- you could set against your profits, and therefore the whole thing was going to be less profitable; you could pay less taxes," she explains.
Essentially, the government had found a way to subsidize new real-estate development in locations far from the core city. "But what did happen as a result was that developers started to build faster and more cheaply since they knew they'd be turning these things over," Hayden goes on. "What was implied [in the tax code] was that there would be dead malls and dead main streets and declining places every time the new one opened up. And what's happening [in Denver] is simply the same process fifty years down the line. I think you see some areas where the older suburbs are in terrible shape, and other places where they are experiencing a revival, especially if they have some type of public transportation and a good location."
At the former home of Villa Italia, for example, Lakewood and developer Continuum Partners rehabbed the hundred-acre pad into Belmar, one of the nation's first attempts at creating a true urban downtown district on the site of an old shopping mall. The raves that Belmar has drawn stand in stark contrast to what's happened in Northglenn. Under pressure from a city council desperate for a boost in revenue, Northglenn Mall was finally demolished in 1998 by Jordan Perlmutter & Co.; the site has since been reconstructed as the Marketplace at Northglenn, an outdoor power center with a Lowe's, a Borders, an Old Navy and several other big-box mega-marts that stare at each other over an amplitude of parking and some obligatory landscaping.
While its longtime rival bit the dust, Westminster Mall celebrated its twentieth birthday as the northern area's supreme shopping destination, with 1.5 million square feet and 170 stores. By now, Joslins had become Dillard's, Broadway Southwest was Sears, and Montgomery Ward had jumped on as a sixth anchor. Sales totaled $289 million in 1998, the second-highest in Colorado per square foot.
Kenton Anderson, Westminster's general manager since 1985, credits the mall's lasting popularity to its tenant mix, which straddles the line between practical-minded purchases and high-end appeal. "We've always been the type of place where middle America shops," he says. But Anderson acknowledges that the lack of competition in the area has contributed to the mall's success, too.
The neighboring cities of Broomfield and Arvada had long watched with irritation as their citizens, guided by the magnetic pull of the Westminster Mall, drove into the heavily retailed town of Westminster to spend their dollars at both the mall and the 4.4 million square feet of surrounding retail space. So in the early '90s, both Broomfield and Arvada began rezoning huge swaths of land at their western boundaries to allow development of commercial and office space, in hopes of landing a large retail project that could compete with Westminster Mall.
Arvada's ambitions for the intersection of highways 72 and 93 were largely blocked by the parcel's proximity to the contaminated Rocky Flats site and Boulder's successful purchase of 1,100 acres for open space at the entrance to Coal Creek Canyon. But Broomfield's efforts were much more successful. The growth of the Interlocken office park along the U.S. 36 corridor added several hundred thousand square feet in office space to the area and, in the late '90s, spurred developers to choose the western tip of the city for a new super-regional mall.
Westminster didn't take the threat of the upscale FlatIron Crossing lightly. In 1999, city manager Bill Christopher proclaimed that Westminster was committed to maintaining its foothold in the northwest retail market. "In order to do this," he said, "aggressive reinvestment in a large economic engine like the Westminster Mall is warranted."
In partnership with the Westminster Mall Company, which owns and manages the center, the city covered $7.5 million of the $10 million facelift that gave the mall a more contemporary look, with new facades, skylights and seating areas. "Westminster Mall will continue to be a major player in the north area's marketplace," Christopher predicted at the ribbon-cutting in 2000, pointing out that the mall was tied with the then brand-new FlatIron as the second-biggest shopping center in Colorado, behind Park Meadows' 1.6 million square feet.
Despite the city's investment, recent years have not been kind to Westminster Mall. The remodel of the food court promised in 2001 has yet to be done, and most of the eateries have closed, save for an Italian and a Mexican joint. While some stores seem to be prospering -- cell-phone outlets and sports-jersey shops are uncommonly abundant -- the classic hot-air balloons are deflated and the fountain is empty.
From its peak in 1999, sales-tax collection at the Westminster Mall has decreased by 35 percent. Meanwhile, the vacancy rate has risen by 15 percent, and today only 80 percent of the leaseable space is filled. BC Surf and Sport moved from the mall's almost-empty north wing to a spot near the interior earlier this year. "We were so dead up there it was crazy," says assistant manager Zach Romero. Business has since picked up, but the shop isn't doing anywhere near the numbers it was when the mall was hopping.
While Anderson admits that FlatIron has affected the mall's sales, he points to other factors, too. The economic downturn in 2001 had an impact on all metro-area malls. And the big-box discounters and power-center-type developments that transformed the retail landscape in the '90s have hurt his traditional anchors. "You don't have department stores anymore with the strength in the changing retail environment," he says. "Sears is combining with Kmart, Foley's is merging with Macy's, and Target is spinning off Mervyn's. That's quite a change in a short period of time."
In 2001, when Montgomery Ward closed all six of its Colorado stores, he began to see the mall lose strength, Anderson says. But with five remaining anchors, he's confident the mall "has stayed viable and will continue to stay viable."
Brent McFall, Westminster's city manager, doesn't express the same confidence. "Retail is a fickle business, and the tastes of the customers and what they're looking for, the atmosphere, has to be constantly reinvented," he says. "In the case of the Westminster Mall, the ownership has not significantly reinvested in the mall property itself." He would like to see a complete overhaul that would "reposition" the mall to appeal to consumers whose shopping habits have changed; this might entail tearing down certain sections of the structure.
But Anderson believes the $7.5 million the city invested in the mall's facelift has already paid off. Westminster could have done nothing, as Boulder did with the forty-year-old Crossroads Mall, which fell into near abandonment after the opening of FlatIron and was demolished last year. "Nothing was done, and now it's extinct," Anderson says. "It's gone. It has disappeared, and Westminster is still here." The 65-acre Crossroads site is being rebuilt as an open-air, "main-street-style" retail development dubbed "29th Street" by a subsidiary of Macerich Co., the Santa Monica-based real-estate firm that also owns FlatIron.
Zach Romero remembers the slow, painful demise of Crossroads very well. He worked at the BC Surf and Sport outlet there, and recalls dreary times in 2001 and 2002 when only ten customers a day might wander into the store. He's afraid the same fate could befall Westminster Mall, especially after the three new retail developments appear along northern I-25. "Yeah, as soon as those new malls open up, that's going to kill us," he says.
One of those developments, the one-million-square foot Orchard Town Center, is located on the northeast boundary of Westminster. Scheduled to open between fall 2006 and spring 2007, Orchard will feature many of the same anchors now found at Westminster. But McFall says he isn't worried that the new mall might cannibalize its existing mall. "For us, it is really a distinctively different market than the Westminster Mall," he explains. "It doesn't mean there won't be some cannibalization, but we think by and large it will not have a significant impact on the Westminster Mall."
None of the new developments are malls in the traditional sense, because all are variations on the open-air, main-street theme. "But it's going to have an effect on all the malls," Anderson predicts, and that includes Westminster Mall. "The retail pie keeps getting cut up into smaller and smaller pieces, and that effect is just more dilution of the retail market as a whole."
Byron Koste, director of the University of Colorado Real Estate Center, says malls have to distinguish themselves in order to attract a customer base that is increasingly particular and diverse. "In the good old days, all malls were the same," he points out. "Southwest mall was the same as the Northwest mall, same as the Westminster Mall, same as the Crossroads Mall. They had the same tenants, same configuration, and if you were blindfolded, you would have no clue where in the world you were. What is happening is that malls are having to attract customers. How do you do that? You differentiate."
Developers are now trying to understand the specific market they're serving, and designing the atmosphere and tenant mix around that. "Because a good mall for the southeast would be different than a good mall for the southwest," Koste says. "Now, one could say that FlatIron and Park Meadows are similar, but I guarantee that what happens out on I-25 and Colorado 7 is going to be different, because they're serving a different clientele."
And when FlatIron opened ten miles northeast of Westminster Mall, what clientele was it catering to? "Yuppies," Koste says. "I mean, it's yuppie heaven. Look at the restaurants; look at the stores. They have a Bed, Bath & Beyond, a Restoration Hardware. They have three or four that have virtually the same type of product, and they're all doing well because the young, wealthy folks buy that stuff like popcorn."
When FlatIron Crossing held its grand-opening celebration in August 2000, approximately 100,000 people drove to Broomfield to check out the new mall located off the Boulder Turnpike. Following the pattern of the successful Park Meadows to the south, Phoenix-based Westcor Partners had developed the mall as a "retail resort" with a strong emphasis on high-end shopping and superior architectural design. It took more than two years and $220 million to complete the 170-acre site, which contains enough square yards of asphalt to pave 97 football fields and enough square feet of interior glass to create 4,400 car windshields, and involved moving enough dirt to fill 87 Olympic-sized swimming pools.
Anchored by a Foley's, a Nordstrom, a Gaylan's sporting goods store (now Dick's), a Dillard's and a since-defunct Lord & Taylor, the core section of the mall featured 160 stores and restaurants, and the half-mile-long outdoor area had room for another forty stores. Shoppers marveled at the elegant yet earthy space, from the vaulted ceiling with exposed oak beams to the overstuffed leather couches and flagstone flooring. Promotional materials said that FlatIron's designers had been inspired by the beauty of the "mountain canyons, high country trails, and prairies not too far away" and wanted to express "the setting and sensibilities of the landscape where it takes root."
But the same bucolic landscape that marketing rhapsody celebrated was already endangered. Roll Development's FlatIron Marketplace opened just east of the mall in early 2001; the 432,000-square-foot "lifestyle center" featured some thirty chain stores and restaurants and was anchored by Best Buy, Nordstrom Rack and the Great Indoors. And soon more dirt will be moved for Coalton Acres' massive, 165-acre Main Street at FlatIron, with 657,000 square feet of stores, restaurants and office space, including a 200-room Marriott, a DSW Shoe Warehouse and a 206,000-square-foot Wal-Mart Supercenter.
The sheer size of the mega-mall and these two neighboring companions makes FlatIron a city unto itself -- an arcadia of shopping where nobody lives, but where everybody goes to get their clothing, food and entertainment. Unlike shopping districts that are designed to serve a specific area, FlatIron leasing agents boast that the mall is strategically located to attract shoppers from as far away as Laramie and Cheyenne, not to mention Fort Collins, Greeley, Loveland, Longmont and the north Denver suburbs. And especially Boulder.
Having long used a city sales tax to purchase open space around city edges, the Boulder City Council faced its own shopping-center dilemma in the late '70s. "The issue wasn't shopping center or no shopping center," says former Boulder County commissioner Paul Danish, who'd authored the city's original growth-management plan as a member of Boulder City Council in 1976. "The issue there was, where does the shopping center go?" Crossroads Mall had stood at two main thoroughfares, Arapahoe Avenue and 28th Street, a half mile from the downtown core, since 1963. But now developers were eyeing Foothills Parkway at the far edge of the city for a new collection of department stores.
"We had done comprehensive planning that showed a compact city, and we wanted it centrally located," Danish says. Developers threatened to take their project to nearby Louisville unless Boulder capitulated, and finally both parties reached an agreement that the city would institute an urban-renewal authority and set up tax-increment financing to pay for the expansion of Crossroads. Completed in 1983, the new, two-story section included several department stores and a Foley's, which was the only large retailer still in operation when the mall finally bottomed out in the late '90s.
While Crossroads died, FlatIron Crossing was born. The area was ripe for a regional mall. "They understood that they had the emerging Superior," says CU's Byron Koste. "The area supplied expensive housing that grew up overnight. All of a sudden, there were a couple of thousand new homes, all $400,000 to $600,000; the people who lived there were often dual-income with a disposable income to die for; and [developers] gave them a mall right down the street where they could spend it."
FlatIron was not only an aesthetic offense to Boulder's environmentally focused policy, but an economic barb as well. In 2001 and 2002, Boulder felt a sudden bloodletting of sales-tax revenue -- what city economic strategists refer to as "leakage" or "retail outflow" -- that has only recently slowed. Other cities felt the pinch, too. "The economics of it for the city is clear," Koste notes. "You don't want your residents running across a jurisdictional boundary and spending their money in somebody else's limits and that city gets the sales-tax bump. So they're vitally important for the community."
For Broomfield, FlatIron was a bonanza. The sales-tax collections have helped the city pay for more open space, new city buildings, state-of-the-art recreation centers and a strong police and fire force. While nearby cities had to tighten their belts in the early 2000s, Broomfield was relatively awash in revenue. Since it opened, the entire FlatIron District has generated $79.7 million in sales tax -- but not all of that has ended up in city coffers.
To score the three large projects, Broomfield granted the developers a big-money incentive in the form of a $135 million abatement on future sales-tax revenue earned by the district, according to Greg Demko, finance director for the City and County of Broomfield. Since the district was four miles away from the city's core, it required a huge amount of new public infrastructure: roads, streetlights, sidewalks, sewer and gas lines and highway interchange upgrades. The developers subsidized the city while it created that infrastructure; so far, Broomfield has rebated $37.5 million back to the developers. But Demko is quick to point out that this wasn't a flat-out subsidy to line the developers' pockets. "They are paying all of their property taxes," he notes. "It's not urban renewal; this is a development agreement with share-back revenue they produce."
And even with the rebate, the $42 million retained by the city over the period accounts for 52 percent of Broomfield's sales-tax collections, doubling the cash in city coffers. If the mall's sales tax continues at current rates, Demko projects, Broomfield's debt will be paid off by 2022 at a total cost of $282 million.
According to the International Council of Shopping Centers, a non-profit trade group for retail developments, FlatIron took in $12 million in 2004, about $398 per square foot. The national average for enclosed malls was $366 per square foot. FlatIron has a 98 percent leased rate, says mall spokeswoman Heather Dray, "which is higher than the national average." But that percentage doesn't include anchors or the now-vacant Lord & Taylor. It also doesn't seem to reflect the mall's outdoor section, The Village at FlatIron Crossing, which has been struggling to attract and retain tenants since the mall opened.
One weekend afternoon, a young woman and her mother strolled past the valet-parking kiosk into the outdoor segment of the mall, which was designed to resemble a European village.
"Are they closed, too?" she asked, peering into a shuttered storefront.
"Maybe they were too expensive," the mother offered. They both turned and looked across the corridor at another store where a large sign pronounced "Going out of business. Everything must go."
Larkridge is set to open on October 20. Months before, the home site of Jordan Perlmutter & Co. featured a banner ad with a bulldozer pushing a pile of dirt and the question "When was the last time you felt the earth move?"
The earth is certainly moving in this part of the metro area -- and not just because of Perlmutter's development. Taking note of the transportation confluence of I-25, Colorado 7 and the recently completed E-470 interchange, retail developers have spent the past two years securing prime tracts of commercially zoned property that could provide convenient shopping for all those future consumers driving along I-25.
The borders of three cities and three counties converge here; all are racing to put the next big regional mall project on their side of the fence. Although some experts already consider this market oversaturated with retail, developers and municipalities alike are confident that the tenant mix at each project will be sufficiently unique to serve non-competing segments of the marketplace. These regional retail centers not only expect to pull the "underserved" customers from the 120,000 housing units already within a ten-mile circumference of the interchange, but they're betting that the retail and office developments themselves will spur an influx of new residents to the area.
They're in "edge node" mode. In Dolores Hayden's A Field Guide to Sprawl, a pictorial encyclopedia that defines different types of suburban development and uses numerous aerial photographic examples from Colorado to do so, an edge node is described as a large, loose grouping of office and retail usually found off highways. "People may work in edge nodes, but they don't like to live there," she writes. "So they jump in the car at 5 o'clock and drive for an hour to some place that they think is unspoiled, and that's why some of the fastest growing places in the US are the rural fringes."
Will Coyne, land-use advocate for the non-profit Environment Colorado, has been following the growth trend in the northern metro area and contends that regional shopping malls are the antithesis of sustainable planning. "Smart growth is about creating livable communities where people can live, work, shop and play all in the same area," he says. "Where you don't have to get in your car and drive ten, fifteen miles to go somewhere. These things are built on automobile culture." He argues that cities that allow low-density, auto-oriented housing developments end up forcing themselves into a position where they need to build large regional shopping centers.
"The cost of the infrastructure of services to residential subdivisions is so enormous that [the developments] don't come anywhere near paying for themselves," he says. "So to pay for them, they build a new regional shopping mall or a new Wal-Mart." Colorado cities have been inordinately dependent on sales-tax revenues since the state adopted the Gallagher Amendment in 1982, which stipulated that no more than 45 percent of the total amount of state property tax collected must come from residential property, while 55 percent of the property tax collected must come from commercial property. "The only way they can continue to feed it is to build," Coyne says. "More residential development for immediate money and then big retail developments to bring in more sales tax."
Thornton began prepping its northern property along I-70 for future development ten years ago, putting sewer and water lines in to make the area more appealing for developers. "We knew this growth was going to come, and we wanted to be prepared," says Mayor Noel Busck. But the city wasn't just trying to be accommodating -- Thornton officials recognized that their financial health was at stake as well. "The I-25 corridor is really our cash cow because we're so sales-tax-based," he adds. "Every municipality in Colorado is." So when Perlmutter and Co. approached Thornton a little more than two years ago with the idea of a mega-power center modeled after their earlier project in Northglenn, the city enthusiastically welcomed the proposal for Larkridge.
At the same time, both Broomfield and Westminster were shooting for their own regional retail centers in the area, and everyone recognized that the first developer to put its footprint in the sand could determine the ambitions of the other two. "This has been a horse race," Busck says. "But Mr. Perlmutter is a visionary person. He said, 'We can build this. We can do this now.'"
The developer originally projected that the power center would open sometime around 2008, but with a strong interest from retailers, it was able to fill up the tenant slots and open nearly three years earlier than anticipated. "So we got out of the blocks first," Busck says proudly. "We hit the home run first."
City officials anticipate that Larkridge will generate around $8.5 million in sales-tax revenue in its first year of operation. Much of that will be funneled to the urban-renewal district that the city created in order to upgrade the vast infrastructure improvements that the development will necessitate, but Busck is still giddy about the revenue possibilities that the mall will create. He's much more wary of growth to the north, especially in the fast-growing towns of Dacono, Firestone and Frederick, and has been an outspoken critic of large-lot, semi-rural ranchettes in Adams and Weld counties. "These folks are going to be coming into my city one way or another," says Busck, who's also a boardmember on the Denver Regional Council of Governments. "And they're coming in now, and a lot of them aren't even counted in the metropolitan district."
But as long as they come with cash -- and leave when they're done shopping -- he can live with it.
In Northglenn, the earliest of the mall pioneers, officials recognize that the continued growth will have its effect -- particularly since landlocked Northglenn is missing out on the northern I-25 boom. With the opening of Larkridge, the city is preparing for a 10 percent drop in sales-tax revenue at the Marketplace at Northglenn. But that's not much of a concern to Perlmutter, which recently put the Marketplace up for sale, with a reported top bid of $87 million.
The company wants to focus on bigger and better properties. The future, after all, is just one zoning change away.
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