Template2019-03-12T10:57:22-06:00

Castle Rock Town Council to eye $72.3 million downtown development

A $72.3 million development could soon join the evolving downtown landscape in Castle Rock, with some help from the town if a public/private partnership gets council approval this fall.

A proposal to construct a seven-story building comprising 124 condominiums, 17,881 square feet of retail and 11,921 square feet of office space directly adjacent to the town hall building is on its way to formal council consideration.

The project, dubbed Encore, would provide two key wins for the town as Castle Rock continues efforts to revitalize the downtown and boost the area economy, said Town Manager Dave Corliss.

The first is that Encore would build more than 300 covered, public parking spaces. There are more than 600 spaces planned in total, but roughly half are pledged for residential, retail and office use. If approved, the development would nearly triple the number of public parking spaces on the site. A town-owned parking lot sits on part of the project site behind town hall at present.

The second allure is the redevelopment of three lots also neighboring the town hall building and its parking lot. A liquor store and two auto shops acquired by the developer would be torn down to make way for the mixed-use project.

The cherry on top, Corliss said, is a pledge from the developer to pay $900,000 toward implementing a train horn quiet zone in the downtown. Encore would also include a civic plaza between it and town hall along with a public dog park, and would help fund a roundabout at South and Wilcox streets.

A proposal strongly resembling Encore was first submitted to the town in 2017 by developer Tom Kahn and called Festival Park Commons. Kahn had responded to a request for proposals, commonly called an RFP, issued by the town earlier that year.

The project later switched hands to Tony DeSimone of Confluence Companies, and was renamed Encore. DeSimone has said the company drew architectural inspiration from the Cherry Creek area when designing Encore, aiming for a modern facade softened by glass elements.

Confluence Companies is no stranger to downtown Castlle Rock development. It's also the developer that brought in the mixed-use Riverwalk project. The Riverwalk is an apartment, retail and office complex at 115 Wilcox St., across the road from where Encore would be built. That project has partially opened but is still under construction.

With the Riverwalk having so recently taken shape, council has a clear example of Confluence Companies' work and what it might expect from the Encore project, which is similar in design. Encore is planned for seven stories, and its tallest point would be approximately 10 feet higher than the tallest point on Riverwalk's south building, which is six stories.

"We've been through three, four, five different configurations of this project. It initially started with a five-story, then a six, and we quickly realized we did not generate enough revenue to pay for the parking structure, so decided to go to a seventh," DeSimone said July 16.

Before shovels could hit the ground, Encore must first get approval of its site development plan by the design review board and final approval from council. Final approval, if granted, wouldn't likely come until September.

Council is preparing to hear a number of items on Encore at its Aug. 20 meeting, including a redevelopment agreement and the possibility of authorizing Castle Rock to take on debt to pay for its share of the project.

Under proposed terms, the town would contribute $10.6 million to the development for 308 pubic parking spaces.

Town staff members expect Encore would generate $28.7 million in sales and property tax revenue by 2048.

Castle Rock would receive 82% of project revenue, while the developer would retain 18%. The town's portion of general improvement district revenue would go toward paying back money borrowed to fund the public parking construction.

Economic consulting firm Economic & Planning Systems determined the project would not be feasible without public money, something council will consider when determining whether to approve the Encore agreement with Confluence.

Councilmember Caryn Johnson has noted the EPS report scrutinized aspects of Confluence Companies' financial analysis of its project, because in it the developer assumed all 124 condo units will be sold by 2021.

“You mention that's a little aggressive,” Johnson said to EPS representative Dan Guimond during a July 16 council meeting where town staff updated council on the project.

Corliss clarified the town collects on property tax regardless of whether the condo units sell. The greater risk for the town is if retail spaces are not filled, because the town would not collect the level of sales revenue it's anticipating, he said.

Johnson also said she felt the design of Encore "seems a little sterile and flattened." Multiple other councilmembers said they were happy with the look and mixed-use plans.

"I think it would be a great place where people can go have a beer and have a meal and walk downtown," Councilmember Kevin Bracken said. "I hope it gets passed."

Downtown Alliance Director Kevin Tilson spoke favorably of the project July 16hailing its location as the best for a downtown public parking garage.

“I wanted to make the point tonight that active and vibrant downtowns don't just happen,” he said. “I would make the argument that the investment that we the leadership of Castle Rock need to make in downtown Castle Rock is parking.”

The DDA would contribute approximately $2.7 million in development fees for the project.

A parking study commissioned by the town previously found downtown Castle Rock does not have an imminent downtown parking problem, but demand for parking is growing, Corliss said.

Mayor Jason Gray said parking is more a perceived problem for downtown visitors. But he believes with Castle Rock's growth, parking will become a legitimate issue if council doesn't act proactively. Castle Rock has added between 1,500 and 2,500 residents a year in the past decade and could surpass 140,000 people by 2040. Corliss said they believe Castle Rock is today home to approximately 70,000 people.

Covered parking frequently costs $30,000 to $35,000 for each space built, Corliss has said. That makes bringing it into town a budgetary challenge, and Encore, he said, a potential solution.

“Significantly, this project will generate enough revenue to pay for the town's purchase of more parking space,” he told council July 16. “If we did not have this project and we still wanted more parking, there is a chance that you as a council would say, 'Corliss, go find $10 million to build a parking garage.' And we don't have that.”