Property Values
Mark A. Manger

Property Values

In April, Derek Empey, vice president of development in the San Diego office of the Morgan Group, released an intriguing memo to his co-workers. A sort of Sun Tzu's Art of War for hawkish developers, it's titled "How to Play the Game: 10 Lessons Learned From Infill Developments."

Lesson number three, "Keep a Wary Eye on Left Field," goes like this: "Because urban areas tend to be heavily politicized, expect an array of highly charged opponents...likely opposition will include historical societies, sensitive neighbors, churches, local 'muckrakers,' and numerous others with 'perceived rights.'

"Since all will want to tell you how to do your job, get this ball going early through face-to-face public forums. Be prepared to hear wild claims from the 'perceived rights' folks (i.e. car parkers, neighbors and community groups who have walked their dog or played basketball on this land for twenty years and feel they have earned the right to control its destiny). To diffuse them, build your credibility as the problem solver, while painting the opposition as less than credible."

One of the highest-volume builders in the U.S., the Houston-based Morgan Group constructs luxury apartment compounds all over the country, mostly in suburban sprawl zones where opposition from "car parkers," dog walkers and other "sensitive neighbors" is weak to nonexistent.

Locally, the Morgan Group has installed three of its trademark mid-rise, high-end apartment complexes in the last decade. The first, a 291-unit cluster in Englewood dubbed the Greenwood Apartments, opened in 1994. Next came The Landing at Bear Creek, a 224-apartment complex in Lakewood completed in 1996. The Estates at Park Meadows, a 518-unit development in Littleton adjacent to the Park Meadows shopping mall, was finished last year. And two months ago, ground was broken on The Estates at Westminster, a 504-apartment project scheduled for occupation in May 2003.

But now the Morgan Group wants to bring its promise of "City Living With a Country Club Lifestyle" to Denver's urban core. The company is proposing to build The Plaza at Colorado, a four-story development containing 193 apartments that would occupy an entire block on the eastern edge of the city's historic Congress Park neighborhood. And for the first time in the Denver area, the Morgan Group is facing organized opposition.

One might say a force of resistance is massing in "left field."

"We have told them as a neighborhood, time and time again, that we do not want this here," says veteran neighborhood agitator Kathleen Hynes, a thirty-year resident of Congress Park. "The Morgan Group is a one-note developer. All they do is big, boxy, suburban-style apartment complexes. Well, that note may play in the suburbs, but it's not going to play here. We're not in the mood to dance to it."

The perception of the "perceived rights" crowd in Congress Park is that The Plaza at Colorado violates the design standards secured in the Congress Park Neighborhood Plan, which was approved by the Denver City Council in 1995 as an amendment to the Denver Comprehensive Plan. According to a city council proclamation, "The Congress Park Neighborhood Plan is the official guide for the City and County of Denver and private citizens when making decisions affecting the future character of the Congress Park neighborhood." The plan declares that new developments in the neighborhood must "remain consistent and complementary with the existing neighborhood character" and rules that "large scale development that could harm the historic character of the neighborhood shall be discouraged."

Most of the houses in Congress Park, whose boundaries are roughly between and Sixth Avenue and Colfax, York Street and Colorado Boulevard, are early-twentieth-century Craftsman-style bungalows. Characterized by full-width front porches, brick columns, box-bay windows and overhanging gabled roofs with exposed support beams, Craftsman homes are low, compact and quaint.

By comparison, The Plaza at Colorado would be lofty, bulky and generic. But whether it would "harm the historic character" of Congress Park is a matter of opinion, as is whether it would complement the neighborhood. Rent for the one- and two-bedroom apartments in the complex would range from $880 to $1,600 per month. Amenities would include a swimming pool and health spa, concierge service, a movie theater, and an enclosed parking garage that would be invisible from the street, which even critics of the proposal admit is a nice touch.

Also, the site of The Plaza at Colorado -- one square block bordered by Colorado Boulevard, Harrison Street and Ninth and Tenth avenues -- is now an unsightly, 344-space parking lot owned by the University of Colorado. The only structures on the property are three houses that have been converted to medical offices and an undistinguished two-story apartment building, all tucked into the northeastern corner of the lot.

"I'd rather look outside my front window at a classy apartment community than a bunch of asphalt and weeds," says Pam Montgomery, who lives across the street and counts herself among the minority of Congress Park residents who support the Morgan Group's plans. "It's not like they want to build a Kmart or something," she says. "The [Plaza at Colorado] is a lot better than a lot of other things that could go on that land."

That may be true, but it's beside the point, says Jonathan Blaine, chair of the historic-preservation committee for Congress Park Neighbors, the local neighborhood group. "Just because another developer might come along with an even worse idea is not a good reason to support this one," he says. "It's the wrong kind of development by the wrong kind of developer for Congress Park."

On July 9, four Denver neighborhood associations co-sponsored a packed, tense community hearing at National Jewish Hospital, where Blaine and fellow Congress Park activist Steve Klein roused the rabble with a PowerPoint presentation called "We Can Do Better Than The Plaza at Colorado."

The presentation featured superimposed images of The Plaza at Colorado looming over the bungalows along Harrison street, as well as warnings of hellish traffic should the project go through. (A traffic study commissioned by the Morgan Group found that the parking lot, which is reserved for University of Colorado Health Sciences Center [UCHSC] employees, now generates 885 traffic trips a day; the study estimated The Plaza at Colorado would increase that figure by 405 additional trips. By comparison, the type of mixed-use retail/residential development favored by many Congress Park residents would increase traffic by 707 trips, according to the study.) At the end of the meeting, the attendees voted against the Morgan Group's proposal by 46 to 15, a three-to-one margin. One week later, the Congress Park Neighbors board of directors also voted against the development, 6 to 1.

At the latter polling, Montgomery, whose husband is opposed to The Plaza at Colorado, cast the lone vote in favor of the development. "I don't understand why so many people in this neighborhood are so determined to run these guys out of town," she says. "I trust the Morgan Group. I think they've made an honest effort to do the right thing. I think they've gone out of their way to gather input and accommodate everyone's concerns."

Montgomery points to a number of design enhancements the Morgan Group has made during the last year as evidence of the corporation's good-faith dealings with her neighborhood. "The first buildings were terrible. But they listened to us, and they changed their plans," she says.

When the Morgan Group unveiled the first draft of The Plaza at Colorado at a community meeting in August 2000, nearby residents were horrified. The conceptual drawings showed a flat-roofed, right-angled monstrosity that resembled a prison. If every structure makes an architectural statement, this one shouted, "Boo!"

Seeking cover from the resulting outrage, the Morgan Group hired Denver architect Joe Poli to give the building a makeover. "He thoroughly researched the architectural styles of Congress Park and invested a tremendous amount of time in redesigning the project to work in harmony with the Congress Park neighborhood," says Denver attorney David Foster, who has been hired by the Morgan Group to shepherd the project through the City of Denver's approval process. (Foster is the son of Denver City Council president Joyce Foster.)

Poli's redesign offers a number of concessions, most of which affect only the set of structures along Harrison Street. It shows four separate apartment buildings along Harrison instead of one big one; all four are set back from the curb by twenty feet, just like the bungalows across the street. Likewise, their height was dropped by half a story, which is now underground, echoing the basements common to the Craftsman houses in the neighborhood. Poli also added angled roofs of varying heights and front porches on the ground-floor units.

"I'm in no way suggesting these are now equivalent in impact to one-story bungalows," Poli says. "We're simply trying to express the Craftsman mentality. What we're trying to do is take this sort of size and density and mitigate it with architecture."

Congress Park Neighbors zoning-committee chairman John Van Sciver dismisses the design changes as superficial at best. "They put a little lipstick on it and tied a bow in its hair and trotted it back out for another look," he says. "They're not fooling anyone."

Foster finds this lack of appreciation for the Morgan Group's efforts frustrating. "We have addressed as best we can all of their objective issues, and we have tried to mitigate all of their concerns," he says. "It seems no matter how we respond with new planning techniques, there are some people from the neighborhood who simply want to kill the project."

"With high density, you have a compressed environment where emotions are amplified ten-fold due to close proximity. By being well-versed on the players and their issues, you will be prepared to anticipate and mitigate every question, concern and issue, and thus take the wind out of the opposition's sails." -- From "How to Play the Game," Lesson Number One: "Test the Water."

Bad blood has been spilled before over the destiny of this prized chunk of asphalt in Congress Park.

In 1994, UCHSC, whose campus covers 42 acres on the east side of Colorado Boulevard, announced plans to build a massive eye clinic and cancer center on the lot. Neighborhood activists rallied against the incursion, enlisting the support of their city council representative, Ed Thomas, as well as that of Mayor Wellington Webb.

The zoning for the parking-lot-turned-battleground is split down the middle. The side along Colorado Boulevard is designated R-3 for a high-density apartment district. The Harrison Street side is R-1, meaning it's reserved for detached single-family homes. Plans for a towering medical building violated both codes.

CU's Board of Regents claimed that as a state institution, the university was exempt from Denver zoning laws, but Mayor Webb threatened the board with a cease-and-desist order, and they backed down. Two years later the regents retaliated, voting unanimously to abandon the venerable UCHSC campus and move its operations to the former Fitzsimons Army Medical Center in Aurora (the phaseout is expected to be completed some time between 2008 and 2010). The regents blamed their decision in part on a hostile relationship with the Congress Park neighborhood.

The two sides appeared to make peace in the fall of 1998, however, when CU asked various Congress Park neighborhood associations to submit a list of criteria for developments to go on the block before the university put the land on the market. Responding to that invitation, Capitol Hill United Neighbors (CHUN), an umbrella organization for the groups, submitted a wish list of development guidelines, stressing that "greater building density along Colorado Boulevard is acceptable, with lesser density along Harrison Street (either single-family homes or townhouses) being required." CHUN then thanked the university "for seeking neighborhood comment before issuing its request for proposals."

Their gratitude proved premature.

The university received no responses to its request for proposals before the posted deadline, says Denise Brown, chief planning officer for UCHSC. "We were about to go through a broker when the Morgan Group showed up on our doorstep, and we began negotiating with them.

"We agreed we would include the neighborhood's suggestions in our annual planning update to the Board of Regents, so the regents were fully informed of the neighborhood's priorities," Brown adds. "But we never promised we would adopt those priorities as our own."

Last year, the Morgan Group signed a contract to buy the lot for $2.7 million (the land was recently appraised at $2.8), contingent upon the City of Denver's granting the developers the zoning change they need to put up four-story buildings along Harrison Street. No rezoning, no deal. On June 4 of this year, the company filed its application with the city, pledging that The Plaza at Colorado will represent a "careful knitting into the fabric of the existing neighborhood.

"This proposal recognizes the value in preserving our Denver neighborhoods while contemporaneously planning for higher density residential projects along the arterial corridors and transit lines [Colorado Boulevard]," the application claims. "Additionally, this proposal recognizes the value of locating housing near employment centers, further reducing our reliance upon the automobile."

It's no coincidence that the development group's formal request for a zoning amendment reads like an excerpt from a new-urbanism phrase book. Last year, Denver planners began renovating the city's land-use and transportation plans according to the new school of urban design, which embraces high-density housing along public-transportation lines and in areas where people can walk to work ("The Big Squeeze," November 2, 2000).

By suggesting that The Plaza at Colorado's "close and convenient proximity to the employment centers of the Hospital District, Downtown, and Cherry Creek will encourage alternative modes of transportation," the Morgan Group is demonstrating the same strategy as a college student who feeds a question back to her professor on an essay test.

This doesn't mean that such claims are false, just that they're a sweet song to the ears of Denver officials. Kiersten Faulkner, the city's area planner for Congress Park, supports the Morgan Group's request for a zoning change, arguing that The Plaza at Colorado is exactly the kind of residential development Denver needs to combat urban sprawl and traffic congestion as the city prepares for the 100,000 or more new residents expected to move here in the next twenty years.

"I think she's under a lot of pressure to approve high-density housing along Colorado Boulevard at all costs, even if it means totally forgoing an adequate review process," says Congress Park Neighbors' Blaine of Foster's assessment.

Both the Denver planning board and the city council must approve the proposal before construction can begin. Faulkner estimates that the planning board will vote on it in September, and the city council will take it up in late November.

Councilman Thomas, who represents Congress Park and was an ally of the neighborhood in its fight against UCHSC's expansion, has yet to announce his position on The Plaza at Colorado. "The issue of rezoning is quasi-judicial, so the councilman is not going to comment prior to a public hearing," says Thomas aide Roger Sherman. "He has received quite a few letters, faxes and e-mails on the matter. He appreciates all the input, and he will take it into account when it comes to a decision before the council." Sherman notes that input is running about 2-1 against The Plaza at Colorado.

The last time the Morgan Group was forced to contend with a coalition of angry neighbors was in May in Duluth, Georgia, a suburb of Atlanta, where the company proposed to build the Crossroads at Gwinnet, a 505-apartment complex near a shopping mall. The Gwinnet Place Neighborhood Alliance fiercely opposed Morgan's plans, to no avail. The Duluth City Council not only approved the project, but also voted to allow the company to increase the size of the development by sixty units and reduce its setback from the street.

The developer doesn't have a perfect record of victory by knockout, however.

In 1992, the Morgan Group came under fire from a hastily organized coalition of several hundred residents of Houston's Fleetwood district, who joined forces with the congregation of a synagogue to protest Morgan's proposed Fleetwood Village apartments. The residents succeeded in pressuring the development group to sell the land to the city for its original purchase price of $675,000 and simply walk away. At the time, company CEO Michael Morgan commented, "It's a happy ending. Life's too short. We're not in business to fight with people." The lot is now a playground and two tennis courts.

Many opponents of The Plaza at Colorado would like to see the City of Denver buy the contested parcel in their neighborhood and turn it into a park with a recreation center. Barring that, they propose one of two alternatives.

The first is to sell the land to a developer who will build according to the existing zoning -- a high-rise apartment complex on Colorado Boulevard, with townhomes along Harrison Street. "That way, you create a buffer between the neighborhood and the busy traffic along Colorado, and you have a more elegant transition into the neighborhood," says John Van Sciver of Congress Park Neighbors.

But in order to ensure the greatest amount of profit, the developer would have to build the apartment complex along Colorado Boulevard to the maximum height allowed under R-3 zoning, which is seven and a half stories.

"I think it's a very good question as to which would truly over-tower the nearby houses -- a four-story building on the entire block or a seven-story building on one half?" says Katrina Plank, the Morgan Group's vice president for development in Denver. Also, any structure that's taller than five stories in Denver must have a steel frame, which greatly increases construction costs. The Morgan Group builds only wood-frame structures. "It's a question of economics," Plank adds. "We don't believe we could get away with charging the rents we would need to charge in order to offset the cost of building a seven-story structure."

A more workable option might be a mixed-use development that stacks loft-style apartments atop ground-floor retail spaces on the Colorado Boulevard side, continuing the retail corridor there, and builds either single-level homes or two-story townhouses along Harrison Street. Two years ago, Congress Park Neighbors and CHUN supported a similar development, which also required a zoning change to allow for an increase in density. That project is now under construction at the intersection of Colfax and Steele.

"We're not against all development," says Van Sciver. "But we are against developers who can't think outside a very rigid box."

"If you even remotely mislead someone, you will be painted as a snake oil salesman, or just another member of the 'Evil Empire.' Be up front at all times. Be sincere. Ask for your opponents' input, even if it's not necessary. Come into the market with the attitude that you're going to do more deals in this community, and you will." -- From "How to Play the Game," Lesson Number Ten: "Tell the Truth"

The fight between Congress Park and the Morgan Group may be just the first of several struggles over the property left behind in UCHSC's move to Fitzsimons.

The main campus is bordered by Colorado Boulevard, Clermont Street and Eighth and 11th avenues, but the university also owns a number of choice parcels immediately outside the perimeter, in addition to the lot in Congress Park. Because of this, other neighborhood groups are looking to the controversy over The Plaza at Colorado for indicators of what to expect from the university, the city and developers in terms of proposals nearer to their homes.

"There's been a lot of speculation that this is going to be a treasure trove for developers, and that speculation is really premature," says architect Syd Harrison, who sits on the board of directors of the Bellevue Hale Neighborhood Association (Bellevue Hale is north of UCHSC). "It hasn't been determined yet what will be sold and what won't."

Harrison is also part of an advisory committee that the university has formed to help determine what will happen to the buildings and the property. Aside from neighborhood representatives, the committee includes architects, urban planners and university department heads. Students in CU's graduate school of architecture will also be involved, addressing the issue as a yearlong project. They are scheduled to meet with the advisory committee for the first time this month.

More than half of the property on the UCHSC campus was donated to the university just after the turn of the last century by the Bonfils Foundation, a deal that included a deed restriction in which the foundation insisted that the property always be used for "hospital or high education purposes." (Harrison says it's possible that the University of Colorado at Denver might take over some of the buildings one day.) The rest of the campus could be up for grabs, though, as could the property the university owns in the outlying neighborhoods.

One such parcel is UCHSC's North Pavilion, located along 12th Avenue between Cherry and Clermont streets in Bellevue Hale. The North Pavilion now houses the UCHSC's psychiatric department. Harrison says the university recently had the property appraised, which he interprets as a signal that it will go up for sale shortly.

"Unlike the Morgan Group site, this lot is more in amongst the neighborhood," he says. "It's right in the middle of us instead of out on the edge, out along Colorado Boulevard. So, obviously, we're very interested in the possibilities for what might go there, and we have opposed high-rise developments in the past.

"Basically," he adds, "we feel we're going to be the next Ninth and Colorado."

Mary Nell Wolf also sits on the university's advisory committee, but as a boardmember of the Cramner Park/Hilltop Civic Association, she's especially concerned about her own neighborhood, which is just south of the campus. "We're closely monitoring the process of how this all plays out on the other side of Colorado," she says.

"We intend to be intimately involved in all the redevelopment decisions made on our side of the street. There's a lot more property over here, and its future is undetermined."

UCHSC planner Brown says that in determining that future, the university would much rather deal with city officials than self-appointed neighborhood groups.

"We find that when we deal with city planners and elected representatives, we have good discussions. When you lose ground is when you have these open meetings where you invite everyone to come. That's when the misunderstandings begin."


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