COVER STORY, FEBRUARY 2005

BUILDING BIG IN THE ‘BURBS
Belmar mixed-use development transforms Lakewood, CO.
Brian A. Lee

It’s one thing to seek greener pastures in which to develop, free of the restraints of the establishment, face to face with a clean slate. It’s quite another thing to transform your whole situation when things aren’t clicking like they used to. It takes vision and commitment — in the case of Colorado’s fourth largest city, big-time commitment.

Belmar, just outside of Denver, is a 22-block town center redevelopment.

The suburban Denver city of Lakewood is teaming with Continuum Partners in the massive $750 million redevelopment of 104 acres into a new 22-block town center called Belmar. At build out, the mixed-use property will comprise 1.1 million square feet of retail space, 800,000 square feet of office space, approximately 1,300 residential units and a hotel.

“We’re in the process of reinventing ourselves,” says Steve Burkholder, mayor of Lakewood, a city of 145,000 located between Colorado’s capital city and the Rocky Mountains. “We’re basically a first-tier suburb, but we really were more of a bedroom community. We’re trying to create that sense of community that, quite frankly, we never really had, that place where people could gather and enjoy each other and enjoy their families.”

In the mid-1960s, a developer built the 800,000-square-foot Villa Italia, considered at the time to be a pioneering retail center and said to be the largest indoor, air-conditioned shopping mall between Chicago and California. In the 1980s, Villa Italia added to its base of more than 70 retailers and expanded to 1.4 million square feet. At its peak in 1994, it generated $3.12 million in sales tax.

“However, Villa Italia’s complicated ownership structure presented difficulties in updating the property or selling it for other uses,” says Tom Gougeon, Continuum Partners’ director of development for Belmar. “Sales declined and the mall began to deteriorate.”

The city of Lakewood knew some forward thinking would be required to turn the mall site from a liability back into an asset. A citizens advisory committee, appointed by the mayor of Lakewood, studied the site and began to explore options for its redevelopment. “One thing that emerged from the process was Lakewood’s desire to have a downtown,” says Gougeon. “Up until its decline, the mall had served as Lakewood’s social center.” Formed in 1997, Denver-based Continuum Lakewood Development Company LLC partnered with the Lakewood Reinvestment Authority in the redevelopment of the old mall and the transformation of Lakewood’s downtown. Boston-based Elkus/Manfredi Architects Ltd. was the master architect while Van Meter Williams Pollock, QPK and Architecture Denver made up the design team for the Belmar project.

“[In redeveloping the mall,] we felt that we had to do something dynamic,” says Burkholder. “We didn’t want to put in a bunch of big box discount retail so we tore down the mall and put in 22 city blocks and, essentially, it’s back to the future. We’ve got retail and restaurants on the first level. The second level is businesses or doctor’s offices or athletic clubs, and the third and fourth levels are where people live.”

The demolition of Villa Italia mall began at the end of 2001, site work started in 2002 and vertical construction of Belmar got underway in April 2003. The $220 million first phase opened in May 2004. The completion date of the enormous town center project is in 7 to 10 years.

According to Gougeon, more than 80 percent of Belmar’s 1 million-square-foot first phase is leased, a figure that includes more than 50 operational retail and restaurant tenants. An additional 90,000 square feet of retail, restaurant and event-center tenants will open in the second quarter of this year. Through its various residential offerings, Belmar establishes 24-hour ties to the community. Forty-three of 109 apartments are complete with 85 percent of those occupied. The remaining 66 residential units will be completed in the second quarter. The first 22 of 132 townhomes are nearing completion, 12 loft condominium units are finished and a joint venture with Trammell Crow Residential that will create 300 apartments and 70 condos will begin in the third quarter. Construction of five live/work units will begin this year as well.

The first component of Phase II of Belmar commenced construction in November 2004 and will consist of the biggest Whole Foods Market (58,000 square feet) in the metro area and an additional 45,000 square feet of office space, 50,000 square feet for retail use and a 700-car parking structure. The balance of Phase II includes three more mixed-use buildings consisting of a total of 95,000 square feet of ground-floor retail with 132 apartments and 65 condominiums above and parking below.

Gougeon says that Belmar’s retailers were asked to use their smallest formats to provide increased variety along the street front. “The way Continuum designed this property, you don’t have a big mass of blank wall that you walk by,” says Burkholder. “About every 50 feet, you have a new storefront.”

Says Gougeon: “A great deal of thought went into the relationship between the street and the sidewalk. No detail was too small, from custom designed light fixtures to tree grates to manhole covers. Belmar has an urban park and a public plaza. One hundred and fifty trees from the mall were saved and transplanted at Belmar.”

Lakewood officials not only contributed conceptually to the mixed-use facelift of their city but also financially. As a development incentive for Continuum, the city cut in half its already low sales tax of 2 percent (Burkholder says that the average city sales tax in the metro Denver area is 3.37 percent). On top of that, the city put in a 2.5 percent public improvement fee (PIF) that went toward paying for the public improvements to the property. Something had to be done to aid Continuum in the face of such huge front-end development costs. “They had to tear out all the old infrastructure and then put in a new infrastructure for 22 city blocks,” says Burkholder. “Before they even raised a piece of steel, their costs were right at $175 million.” Every time consumers purchase something at Belmar, they pay the 1 percent city sales tax and then the 2.5 percent PIF. Funds from the latter are dedicated to bonds that finance Belmar’s parking structures. “To make the project successful, you had to have structured parking so we’ll have roughly 9,000 parking spaces at build out,” adds Burkholder. “Of that amount, roughly 650 are on the street where there is metered parking but all of the rest of the parking is free.” Finally, the city of Lakewood has agreed to split with Continuum its 3 percent lodger’s tax for the hotel property.

The proactive approach of the advisory committee, key input from the community at large and the city’s unique collaborative relationship with Continuum Lakewood Development Company made Belmar a reality. “The main goals were to create a downtown with a real sense of community, to reconnect this site to the surrounding area, to celebrate the public rather than the private realm and to create an environment that was pedestrian- rather than automobile-oriented,” says Gougeon.

In doing so, Belmar has also reestablished Lakewood as a regional retail destination, created a high-quality office submarket and offered many types of housing options not readily available in that part of the Denver metro area. And the benefits keep on coming.

“Now, instead of a sea of parking, you find people walking down the street with their dogs, meeting friends at the weekend market, taking in a movie, partaking of a number of cultural activities, shopping at the local stores and dining at local restaurants,” says Gougeon. “Belmar is also an excellent example of taking a brownfield site and redeveloping the ugly duckling into a swan. This is what can be accomplished if the community is involved in the decision making process and the developer is willing to listen to community input and become a long-term partner with the community.”

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.