Courtesy of The Luzzatto Company
Audio By Carbonatix
Plans to convert two mostly vacant downtown office towers at 621 and 633 17th Street to apartment buildings with affordable units are threatened by a standoff over a ground lease long held by the Lakeside Park Company, founded in 1935 by Benjamin Krasner when he took over ownership of what is now Lakeside Amusement Park. Today, Krasner’s daughter, Rhoda Krasner, is the registered agent for the company, which owns the park as well as this ground lease, which runs until December 2055.
Downtown Denver has been suffering since the pandemic caused a dearth of downtown workers, and moving in more residents has been a goal of Mayor Mike Johnston. The proposed project would replace two zombie office towers with housing, but the new owners feel like they’ve been taken for a ride by Lakeside.
The Luzzatto Company (TLC), a California-based real estate company, purchased the two towers on April 1 of this year for $3.2 million, with plans to convert the office space into approximately 750 apartments along with a child-care center, a bookstore and other retail and restaurant spaces, a basement theater, rooftop pool, and outdoor amenities. The president of the company, Asher Luzzatto, says that without a deal with Lakeside that allows TLC to renew its ground lease for another 99-year term (as two other lessees have done) or Lakeside selling that lease to someone who would renew it, construction lenders won’t put their money into the project.
Last week, TLC won an auction to purchase the Denver Energy Center, another pair of downtown office towers at 1625 and 1675 Broadway, for $5.25 million; Luzzatto plans to convert some of that space from office to residential units. The sale is expected to close next month. But first, he’s dealing with Lakeside.
Luzzatto knew about the ground lease problem when he bought the 17th Street buildings, but didn’t see it as a major obstacle. “What we thought was going to be a frankly very easy negotiation with Lakeside has turned out to be absolutely brutal. It’s been non-responsive, and we’ve since learned that every owner has had basically the same issues, there’s literally no way of this project moving forward without something happening with that lease,” Luzzatto says.
Brenda Fishman, Rhoda Krasner’s daughter who oversees the amusement park, responded to Westword ‘s queries in a brief email: “In regards to the ground lease at 633 17th Street, our goal is to have the owners bring the lease current.” Fishman did not respond to subsequent outreach asking what the specifics of bringing the lease current might entail. The family is notoriously press-shy when it comes to talking about the amusement park, but Luzzatto says he can’t reach them either.
According to Luzzatto, the attorney for Lakeside, David Shore, told TLC it needed to compensate his clients for payments from 2015 onward. “They’re claiming they’re owed money, but they won’t say how much they’re claiming, they won’t even put a number on it,” Luzzatto says. Shore did not respond to Westword’s request for comment. Luzzatto says Lakeside cashed its rent checks from 2015 to 2022 with no objections to the rate it was paid.
The current dispute arises from an earlier dispute the value of the ground lease: The owner prior to TLC, a local company called E2M Ventures, had the ground lease property appraised by Cushman & Wakefield, a massive real estate firm based in Chicago, in 2024 in an attempt to settle what was owed to Lakeside for the lease. The appraised value on January 1, 2025, was $800,000, which the coimpany said would mean Lakeside was owed $56,000 per year in rent for its space.
A December 30 email from E2M to Shore reads, “As discussed, we are committed to resolving any discrepancies regarding the rent amounts due and will continue to make the $42,000 annual rent payment until a new value is mutually agreed upon.” A series of scanned checks from E2M’s LLC for the property shows three checks dated January 6, 2025, for $42,000 each and notated for 2023, 2024, and 2025 ground leases. They were not cashed by Lakeside, and on March 28 the owner stopped payment on them, just prior to TLC closing on its purchase of the two towers. It’s accompanied by a note to Luzzatto, reading, “FYI- you might have to cut her checks again once you close.”
Luzzatto says no other developers were willing to take on the risk, given Lakeside’s failure to communicate with previous owners. “The only reason I could do it is because I’m an attorney, I read all the documents myself, and felt like there was no way in this world we couldn’t solve this.” But his optimism has taken a darker turn. “It’s an undefined liability — You have these people that are claiming they’re owed money, but they won’t tell you how much they’re claiming.”
Still, Luzzatto says his company is amenable to a solution, even if it pays out money it doesn’t actually owe. “We would consider something going backwards, which we have no obligation to do,” he tells Westword. “We just want to do it under the understanding that this will all be wrapped into a lease extension.”
