Saturday, Aug. 24, 2019
An independent analysis of a proposed hotel and retail space on University Hill has concluded that the project makes the most sense in the long-run for the city, though it would not bring more jobs or revenue to the area than a theoretical mixed-use office and retail building.
The hotel has been in the works for three years, born amid a decades-long city goal to revitalize the flagging Hill business district. But the proposal has faced significant opposition from neighbors and elected officials opposed to the redevelopment of a business plaza and city parking lot, as well as the addition of another hotel to Boulder.
Plans have morphed significantly over the past few years. Initially, the city was going to co-develop and own an underground parking garage, to be shared with the hotel. Costs were too high, city council decided in September, delaying a vote on approving the public-private partnership. Officials in January proposed exploring the sale of a UHGID-owned parking lot on Pleasant Street to hotel developers, which a split council approved in April.
What is UHGID? The University Hill General Improvement District. “UHGID generally follows the boundaries of what is known as the Hill Commercial Area, which consists of 33 privately owned properties that contribute to UHGID through a district-wide commercial property tax,” plus two University of Colorado properties and two UHGID parking lots. Source: City of Boulder. Learn more.
The go-ahead came with a request to study the purported financial benefits of the hotel, along with other possible development options. No other projects are being pursued by property owners: the report looked at hypothetical scenarios proposed by council members opposed to the hotel.
An office and retail building would bring the most jobs and revenue to the Hill, an analysis by Denver-based Gruen, Gruen + Associates found, but a hotel would have the greatest benefit for the city in terms of revenue from taxes and fees, as well as money from the sale of the parking lot which staff has suggested be used to build a parking garage on another, nearby UHGID property.
1. Proposed hotel project: 189 rooms with 10,500 square feet of retail space
2. Mixed-use office and retail: 36,000 square feet
3. 35 units of affordable housing over 8,000 square feet of retail
4. Leaving the Pleasant Street lot as-is
Jobs and revenue potential
Hotel: 183.9 employees; $5.133M in earnings; $22.088M in economic output
Office/retail: 257.8 jobs; $10.761M in earnings; $38.899M in economic output
Affordable housing: 111.3 jobs; $2.701M in earnings; $11.025M in economic output
As-is: 78.1 jobs; $1.83M in earnings; $7.307M in economic output
One-time and ongoing benefits
Hotel: $5,428,418 one-time benefits; $1,668,618 ongoing benefits
Office/retail: $4,319,497 one-time benefits; $634,758 ongoing benefits
Affordable housing: $3,604,965 one-time benefits; $449,067 ongoing benefits
As-is: $0 one-time benefits; $340,728 ongoing benefits
Potential new retail demand
Hotel: 26,400 square feet
Office/retail: 5,100 square feet
Affordable housing: 1,300 square feet
“The proposed hotel development is estimated to generate the highest one-time and ongoing fiscal impacts and second highest economic impacts,” the report read. “It also has the greatest potential to generate positive retail demand spillover for UHGID and to improve the balance between retail space supply and demand.”
Potential parking demand was also analyzed by the firm. Existing spaces on the Hill will likely be enough to accommodate displacement from construction during the day, the report found, but evening traffic may exceed capacity, resulting in “limited dispersion outside the commercial district.” Ditto for post-construction evening traffic, when the hotel is expected to create demand for five more spaces than it will provide.
The report’s authors recommended implementing a transportation demand management plan and further research on demand for employee parking. City staff is hoping the university will be able to accommodate some parking for employees at its existing lots or in the planned CU hotel/conference center parking garage across the street.
“CU has responded with openness to partnership proposals from UHGID,” staff wrote in notes to council, “and conversations would resume if the project proceeds and once the number of needed (spaces) is confirmed.”
City council has not discussed the findings, which were included in notes for the Aug. 20 meeting. Staff will continue negotiating the sale of the parking lot, returning to council for approval before executing a deal. A timeline was not established.
Conditions have meanwhile continued to decline on the Hill for restaurants and shops. A group of businesses earlier this year coalesced into a nonprofit to push council for final approval of the hotel.
The “inaction” of the city has “creat(ed) the very situation we are trying to avoid,” Mark Henritz, co-owner of The Sink told Boulder Beat in April — “the loss of small businesses.”
Gruen’s report found that businesses on the hill “have significantly lower sales per square foot than the city as a whole,” despite similar average rents.
Hill retail sales, on average:$230 per square foot
Boulder as a whole: $435/ sq ft
Hill rents, on average:$20-$25/ sq ft.
Boulder as a whole: $25.37/sq ft.
The city is working closely to help find new spots for businesses that will be displaced by the redevelopment. Property owners have put together a fund to help pay for relocation.
The most recent staff update to council did not include a status report of Hill businesses. A list was compiled months ago that showed four of 15 businesses who would be impacted by redevelopment have already closed, while two more plan to shut their doors and three others were working to move.
Even that update is outdated now. Staff made note at the time of one new business opening: B’s Grilled Cheese, which debuted in October. Less than a year later, that eatery has closed.
— Shay Castle, email@example.com, @shayshinecastle
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