Denver, Aurora partnership sets new standard

Erin Johansen

Denver Business Journal

HighPointe @ DIA, an 1,800-acre, mixed-use development planned near Denver International Airport, is breaking new ground when it comes to regional cooperation.

The $1.5 billion project, which will include residential, office, retail, hotel development and a golf course, will be in both Aurora and Denver.

Historically, this would pose planning and compliance headaches for the developer and stiff competition for tax revenue between the cities.

But in the case of HighPointe, Aurora Mayor Ed Tauer and Denver Mayor John Hickenlooper have agreed to philosophically put aside boundary lines and work on the project together so it's based on sound planning principles rather than competition for tax revenue and two separate sets of rules.

Cooperation on a project of this type and size is virtually unheard of in the metro area and even more noteworthy because it's between two neighbors that had a chilly relationship under their previous administrations.

But Hickenlooper and Tauer, who both were elected in 2003, included regional cooperation as part of their respective campaign platforms.

"It's a place where we can begin to develop a habit of cooperation," Tauer said. "You don't develop habits by speeches, but by doing."

"It's a model of cooperation," Hickenlooper said. "When Ed Tauer and I started talking about how we're not going to poach -- this is an area where we can start. Too often projects are driven by economic needs rather than good planning."

The competition for tax sales and commercial property tax revenue is particularly fierce in Colorado where residential property taxes are kept low by the Gallagher Amendment. This means residential development -- which generally requires the most infrastructure and services -- is least able to pay for it.

So to make up for the cost of providing residential services, cities often compete for commercial and retail development, which bring higher tax revenues. This also means developers often can get cities to compete for their projects and locate in the city that provides the most assistance.

"The fact that Denver and Aurora were able to put that aside is a leg over a very deep chasm," said John Huggins, director of the Denver Mayor's Office of Economic Development and International Trade.

The HighPointe project, which is being developed by Landmark Properties Group Inc., is bordered roughly by Tower Road on the west, Peña Boulevard to the north, 64th Avenue on the south and E-470 on the east.

The build-out time for the project is 20 to 25 years, and it's expected to produce up to 40,000 new jobs -- not including related construction jobs -- said Ray Pittman, president of Landmark Properties Group.

The project is slated to include up to 3,000 for-sale and rental homes of all types and price points; 300 to 400 acres of public open space, including an 18-hole golf course; a 350-plus room hotel and conference center; a 10 million-square-foot, high-end business park; and up to 1 million square feet of retail and commercial development.

The developer also is talking to the Regional Transportation District about public transportation at the development.

The details of the revenue-sharing plan are still being worked out, but conceptually it will mean sharing tax revenues regardless of where the different uses officially sit.

Huggins said city leaders are furthest along in talking about sharing taxes generated by the hotel.

The cities also must determine how they will share services like fire, snow removal and street maintenance once the project is done.

According to Hickenlooper, that part won't be so difficult. "We know how much those things cost," he said.

City and business leaders from the region say in addition to its significance because of the precedent it's setting for regional cooperation, the project is important because it will be the first impression those arriving by air get of metro Denver -- particularly those considering operations here.

"When we have prospects and they fly into DIA, they are kind of in Kansas," said Wendy Mitchell, president of the Aurora Economic Development Council. "It's the gateway. Because of that, it's important to have some sort of a presence out there.

"There will be high end-office, a conference hotel. It will kind of set the tone for the area. The site-selection people will see it's a real city," Mitchell said.

The conference hotel will allow groups to hold more quick meetings in Denver, which is a mid-point for companies located on either coast.

Landmark Properties Group is working with both cities on the development submittal. Because each city has different guidelines regarding building, planning, zoning and design, the city departments are working together on a set of guidelines that will work best for the project.

The city of Denver agreed to follow Aurora's timetable for the review process, in part because it's faster and more predictable, Huggins said.

Both cities have given priority to moving the project ahead.

"We're going to have a sense of urgency on everything," Hickenlooper said.

"We've had multiple presubmittal meetings. We've been through that process and our formal submittal will be submitted in mid- to late May," Pittman said. "We hope to have entitlements and the master plan approved by end 2004."

Pittman has been involved with the site for years, as his previous employer, Catellus Development Corp., was hired to develop the land. When that company started focusing more on industrial development, it no longer made sense for it to develop HighPointe, Pittman said.

Colorado International Center LLC owns some of the land and is in the process of acquiring the balance of the 1,800 acres, Pittman said.

"It will be very prominent," Pittman said. "I think the regional cooperation is very prominent. It has great access, great views and no major challenges. It's at a great location and happens to straddle two cities."