ULI Land:June 2004: Signature Landmark

Urban Land: June 2004

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Signature Landmark

by Brad Berton

A proposed $1.5 billion, airport-adjacent, mixed-use project is targeted to provide the signature landmark that Denver now lacks.

With the local economy generally grounded and air travel still recovering from the 9/11-related slowdown, the question is: Will the future HighPointe@DIA (Denver International Airport) proceed at mach speed, or will it need a takeoff boost?

The $1.5 billion mixed-use project, proposed by Ray C. Pittman, Jr., and partners of Landmark Properties Group, aims to do for Denver and its giant hub airport what the Las Colinas and Reston Town Center planned communities have done for the Dallas/Fort Worth (D/FW) and Dulles airport districts: namely, provide the signature landmark Denver now lacks.

When Denver Metro’s $1.2 billion E-470 tollway was linked last year with the I-70 freeway just south of the $4.3 billion Denver International Airport, Pittman had already been scouting for opportunities to leverage billions of public investment dollars into profitable property plays. He was looking at both short and long term possibilities, as another megatransit project—a proposed $4.7 billion light-rail line—was most likely eventually going to hook up the new DIA with Denver’s central business district. There would then be two systems—the new tollway and the new light-rail line (if built)—bringing thousands of people to the new HighPointe @ DIA.

The 47-mile tollway and an expanded airport are expected to support a strong base of distribution-related uses. But Pittman also perceived opportunities for something grander that might leverage off the 37.5 million annual passengers now passing through the airport—not to mention the busy freeway interchange. Just north of the EastGate site, “a higher-end office park right at the airport made a lot of sense to us,” Pittman recalls. “It would be a defining, signature project” linked to DIA and the entire Denver metropolitan area.

The moniker selected for the development, HighPointe, reflects the fact that the mile-high site for the project has the highest elevation in the airport area. “It’s a defining piece of real estate, with a great view of downtown and pretty much the whole Front Range,” Pittman relates. And he is intent on defining the property in the more literal sense by applying an integrated mixed-use plan designed to emphasize local color.

“It will be the first [built] thing that travelers see when they fly into Colorado,” Pittman stresses, “and the last thing they see when they fly out.” There apparently will be plenty to see below, as Pittman is pursuing entitlements to site what he calls a “healthy balance” of jobs, housing, services, and transportation options on the HighPointe property. Preliminary plans call for more than 300 acres of public open space, including an 18-hole golf course; a 350-room conference center/resort hotel; a high-end business park potentially reaching 10 million square feet; 1 million square feet of retail and commercial space; and a residential community combining 1,600 single-family and 1,400 multifamily homes.

“The sky’s hopefully the limit” for Pittman and company, says longtime local transportation planning professional Bill Sirois. “It looks like a huge opportunity right now,” given the new tollway, the potential rail system, the unusually large assemblage of undeveloped property, adds Sirois, who managed Denver’s light-rail station development program before joining architectural/engineering firm Carter & Burgess. Area citizens will vote on a sales tax increase to fund the FasTracks rail program this November, continues Sirois. “If it passes, that will really open up development opportunities” around DIA, he concludes.

Predictably, industrial and commercial developers such as ProLogis, Trammell Crow, and Lowe Enterprises likewise have been maneuvering to tie up chunks of the prairie lands surrounding DIA. Plus, there has been no shortage of homebuilders targeting the area, particularly specialists in the hot-selling moderate price points. But no one else has anything remotely as ambitious as HighPointe on the table.

While realizing that the project’s potential as Denver Metro’s signature property poses no shortage of challenges, Pittman aims to incorporate something of a “Colorado environment” theme through integrated architecture, landscaping, and monuments. It will draw at least in part on the DIA terminal’s “iconic” architecture, including dramatic roof spires influenced by the nearby Rockies and Native American teepees, he adds. “So we’ll aim to maintain that link, which should be a competitive advantage.”

The HighPointe team came to appreciate the “bold, forward-looking mixed-use” projects—modeled after the Reston and Las Colinas communities—that were developed beside Dulles and D/FW, Pittman recalls. The mixed-use visions have helped those developments become “internationally recognized places in and of themselves,” notes Pittman. “They are our role models for HighPointe to some degree—albeit they are on a much larger scale.”

As they considered planning and design options for HighPointe, team members studied historic development patterns around D/FW and Dulles, as well as other remote hub-category airports such as Chicago O’Hare and Atlanta Hartsfield. A key analogy is that these metropolitan areas opted to leapfrog close-in candidates in favor of more distant airport sites, “and then grow toward them,” Pittman relates. Indeed as Sirois notes, “We’ve seen projections that the airport vicinity could capture as much as half the metropolitan area’s job growth over the next three decades.”

HighPointe should attract its share as the planning team aims for some signature drama by juxtaposing highly modern 21st-century structural architecture with “Prairie West”–themed landscaping, explains principal Mark Nuszer of Denver-based Nuszer Kopatz Urban Design Associates, HighPointe’s lead land planning and landscape designer. The goal is to remain “forward looking” rather than drawing on the nostalgia characterizing much of today’s new urbanism–based, mixed-use strategies, adds Craig Karn, Nuszer Kopatz’s director of planning.

The master plan aims to leverage HighPointe’s visibility from the north-south tollway, which dissects the property’s eastern flank, as well as from east-west thoroughfare Pena Boulevard, which runs into DIA to the immediate north. Much of HighPointe’s office space will surround these high-traffic corridors, providing ample opportunity for iconic architecture along the property’s peripheral slopes, Nuszer notes.

But it probably makes more sense to incorporate mountain and prairie themes into HighPointe’s civic fabric—bus shelters, activity centers, and the like—rather than mimic DIA’s spires in the commercial buildings, Nuszer suggests. Commercial structures probably will see combinations of modern building materials with the likes of timber, red sandstone, and granite, he adds. “That should remind everyone of the context they live in, the proximity to the airport, the Rockies, and the high plains as well.”

With any luck, HighPointe’s projected two-decade buildout could start as early as next year, thanks to an unusual level of planning cooperation between the two cities in which the property lies. About 1,200 acres are in Aurora, with the balance in Denver. Their respective new mayors, Ed Tauer and John Hickenlooper, are demanding that staffers collaborate heavily on entitlements and hence avoid competition.

“Both of the new mayors are energetic, visionary leaders who have been much involved in the planning process,” Pittman says. Indeed, securing entitlements today “seems a lot more realistic” and possible than it was for many years under previous clashing jurisdictions, Sirois agrees.

The Landmark team finished and filed its application for HighPointe’s framework development plan in mid-May. Ideally, final approval from the Denver and Aurora city councils will come by year-end followed by a Phase I ground-breaking ceremony sometime next spring.

A first order of business is to assemble a design and planning team. In addition to Nuszer Kopatz, the developers have engaged Klipp Architecture for commercial features, and RNL Design to help with individual structures and other elements.

As for ownership of the assets, Landmark has formed ventures with two landowners who collectively contributed some 1,600 acres constituting the HighPointe site. The other 200 acres planned for the golf course are to be leased from DIA. Landmark and partners plan to sell residential sites to single- and multifamily developers. Specialists will likewise handle the hospitality developments. Landmark and partners also aim to form a venture with an experienced golf course designer and operator.

Pittman and his company have reached an agreement with an “internationally recognized” equity partner, and hope to finalize and announce the arrangement this summer. Meanwhile, locally based Horizon Bank has agreed to provide the bulk of the necessary predevelopment debt. Through assessment areas known locally as “metropolitan districts,” special assessment bond financings likely to exceed $100 million will finance development of HighPointe’s basic infrastructure, Pittman explains.

Up first for construction are the first phase of single-family homes, and ideally the golf course and clubhouse, notes Pittman. If he finalizes arrangements with a hospitality specialist, Pittman says he would like to see a hotel underway soon. Market conditions will help determine the construction sequence and timetable, he adds. Demand for single-family homes in the DIA vicinity remains relatively robust, although the multifamily market is still soft, Pittman notes. The hospitality market is “pretty good,” as developers have not overbuilt hotels in the emerging airport marketplace. However, financing new hotels remains difficult in the wake of the sector’s post-9/11 struggles, he acknowledges.

Depending on the outcome of the November ballot and the subsequent success of an organization pursuing more stops along the FasTracks route, HighPointe might move along more quickly than anticipated. A group of area property owners operating as the Northeast Corridor Coalition has been pushing for additional stations along the planned rail system to better serve residents and business, Sirois notes. Its successes in that effort may go “a long way toward shaping development patterns” in the DIA vicinity, he adds.

FasTracks’ fate and near-term economic sluggishness notwithstanding, commerce appears destined to flourish in and around DIA even as Denver’s developed periphery pushes that direction. Hence, HighPointe will not have to fly high immediately—it is bound to find its wings at some point.

Brad Berton is a Portland, Oregon–based freelance writer specializing in real estate and development.

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