World Trade Center Denver project brings on new partners, poised to break ground this year in RiNo
Project first announced in 2016 now located in tax-break producing opportunity zone
In stasis for much of the last two years, the World Trade Center Denver project in the city’s RiNo district took a big leap forward this week when new partners signed on to co-develop its office and hotel towers.
Groundbreaking on the 2.1-acre site at the northwest corner of 38th and Walnut streets is now expected to happen before the end of the year.
Formativ, the Denver-based mixed-use developer leading the project, announced Wednesday it signed up Chicago-based Golub & Co. to co-develop the 14-story, 350,000-square-foot office tower there. A division of investment banking giant Goldman Sachs will be the lead equity investor in the $180-million project that will include an above ground parking garage with more than 600 spaces, according to Formativ.
“We’re incredibly excited about having Golub & Co. as our partner,” Formativ CEO Sean Campbell said. “They opened an office here in Denver last year and we’re really excited to be working on these projects with them.”
Golub’s portfolio includes the Tribune Tower in Chicago and Park Tower in San Francisco where Facebook leased 750,000 square feet last year, according to a news release.
Kemmons Wilson Cos. from Memphis, Tenn., meanwhile has signed on to co-own and develop the project’s “hospitality tower,” a nine-story, 240,000-square-foot project that will include a conference center and hotel of at least 240 rooms. Company namesake Kemmons Wilson launched the Holiday Inn hotel chain, but no brand has been attached to the forthcoming accommodations in RiNo yet. That tower is expected to cost north of $114 million, Campbell said.
“It’s an exciting time to be entering the hotel market in Denver,” McLean Wilson, principal of Kemmons Wilson Cos., said in a news release.
Karen Gerwitz, president of WTC Denver, the Mile High wing of the nonprofit trade organization, first announced plans to move her headquarters to the River North Art District in early 2016, in part because of a lack of event space in the old digs downtown.
Dirt was expected to move on the project site — adjacent to the development-driving 38th and Blake Station rail stop — as early as the winter of 2017. Part of the delay was due to a beneficial change in the regulatory weather: The land the project sits on is in an opportunity zone. The opportunity zone system, created by the 2017 Tax Cut and Jobs Act, allows investors to put built-up capital gains into funds that are invested in state-designated zones that cover economically floundering areas. Any investments in those zones held for 10 years will see all capital gains taxes on them waived. After waiting for the IRS to iron out rules around the zones, Campbell expects his project to attract more investors and ambitious office tenants.
“I think it will be a draw for a company looking to have an HQ or be born in an opportunity zone and take advantage of that,” he said.
Launched as a mechanism to market and support artists living in the formerly neglected industrial area, the River North Art District has exploded over the last few years. It is now home to a multitude of bars, restaurants, apartments and high-profile commercial projects such as the Hub building at 3601 Walnut St., headquarters of HomeAdvisor. Golub vice president Josh Patinkin referred to it as “one of the fastest growing office sub-markets in the country,” in a news release Wednesday.
Formativ has been there since the boom began, co-developing the Industry Denver shared working space that opened on Brighton Boulevard in 2014. Now, Industry has a second location across the street from where the WTC Denver project will rise.
Formativ isn’t discussing tenants in the project at this time, but Campbell made it clear the WTC Denver will be center stage. The campus is expected to open in 2021.
“They’ll be one of the namesake tenants with their office there and run their larger vision of making Denver and the metro area a global presence, promoting international trade and business throughout the state and the larger Rocky Mountain region,” he said. “We’re excited to help them create a global city.”