Larimer Place, a high-rise condo project built more than three decades ago in downtown Denver, is considering an innovative plan to add eight luxury townhome-styled units on its third-floor deck that currently is home to its tennis courts.
The plan also calls for adding retail space at 15th and Larimer streets.
The 31-story tower at 1551 Larimer Street was constructed in 1981 and was one of the last high-rise condo buildings constructed in downtown until the Spire, One Lincoln Park and the Residences at the Four Seasons Denver opened in recent years.
The proposed units, which will look like townhomes, but will be condos for legal purposes, are coming at a time when luxury homes in downtown are selling at a brisk pace. All the units in the Four Seasons, for example, have been sold, after a sales in drought in all of 2010 and 2011.
“I think this is an amazing idea,” said Ann Atkinson, a broker with Fuller Sotheby’s International Realty. Atkinson recently presented her analysis of adding the units to downtown’s luxury inventory to the Larimer Place Homeowners Association, which needs to approve the plans before it goes forward. She was extremely bullish on the idea.
The HOA plans an open forum on the issue on Jan. 17 and homeowners in the 168-unit building are tentatively scheduled to vote on it on Jan. 31. It will take a super-majority of the homeowners to approve the plan.
The plan is for construction to begin next fall and be completed in the spring of 2014.
“Currently, we are…presented with an historic opportunity to remake Larimer Place in our effort to return Larimer Place to its status as the jewel of luxury condo living in downtown,” David Stafford Johnson, the president of the Larimer Place HOA, recently told board members.
The HOA board has retained Davis Partnership Architects to consider options for the third-floor deck upgrade project.
Davis Partnership, which is working with BuildMark, a project management development firm, prepared a 22-page analysis detailing the proposal. It includes preliminary drawings of the new units, which are estimated to sell for just under $7.9 million, or about an average price of $984,520. Principals of BuildMark have been involved with a number of high-profile projects in the area, including Denver Union Station.
The units are anticipated to sell at an average price of $560 per square foot. Two of the units would have about 2,000 square feet each, while the other six would be about 1,677 square feet each, according to preliminary estimates.
The new townhomes, which will be severed by a separate elevator, will be priced near the top of the market, which should enhance the sales statistics on the property, according to Davis Partnership.
“The risk of building and selling the new units is entirely on the development team – there is no risk to Larimer Place HOA or individual homeowners,” according to Davis Partnership, adding that the new units will generate between $6,000 to $7,000 of additional monthly HOA fees, when sold.
Current residents would get first dibs to buy a unit and would receive a 5 percent discount.
There will be no cost to homeowners, under the creative plan on the table.
“While under normal circumstances this would seem nearly impossible, we are confident that we have in fact achieved this objective, largely because of the project’s outstanding location,” according to Davis Partnership.
“This is truly a “win win” proposition, one that could add considerably to the value of the existing condominiums. However, it can only happen with the approval of the homeowners.”
The mantra of “no cost to homeowners” is repeated numerous times throughout Davis Partnership’s detailed report.
The Larimer Place Townhomes “are conceived as a means to an end: the goal of this project is to upgrade, refresh and renew the image and identity of Larimer Place — in short to improve deficiencies…in a manner that benefits owners, residents and neighbors,” according to the report.
It says the “immense benefits” to homeowners in Larimer Place “is that all this will be done at no cost to them.”
The idea is that the sale price of the townhomes will cover the cost of developing, designing, constructing financing and selling the units, as well as the cost of adding 16 new parking spaces.
It notes that while “financials may evolve once the project moves forward,” and “while the work to date is preliminary, the development team is confident of the overall feasibility of this project, and with HOA approval, is committed to moving forward with this project.”
The proposal calls for the tennis courts to be moved to the northeast (16th Street) side of the building, but the existing swimming pool will remain on the third-floor deck. The current deck has no shade or shelter from the wind, two downsides that would be addressed by the improvements, according to Davis Partnership.
The townhomes will have their own heating and cooling systems, separate from the centralized system currently serving Larimer Place, so they will not impact the supply of heating or cooling to the existing units.
Rental income received by the HOA for new retail space and display windows on the ground floor would be used to finance construction improvements on the third-floor deck.
“The intent is that the HOA would have lease commitments for these spaces, and would then obtain a loan to cover the cost of the design and construction of the deck upgrades,” according to the report.
Preliminary estimates that the HOA cost would be $600,000. Rental incomes from the retail and display windows is estimated at $4,500 per month, while the monthly debt service would be $3,700, creating a surplus of $800 each month for the HOA’s use.
Because the HOA would need to take out a loan for the third-floor improvements it “assumes some risk relative to being able to rent these spaces,” according to the report.
The HOA board initially asked the architectural firm to consider options to upgrade the third-floor deck.
“From those discussions, a compelling opportunity evolved which involves not only a major upgrade to the third floor deck amenity, but also significant upgrades to the general facade of Larimer Place, all without any assessment to the homeowners at Larimer Place,” according to HOA president Johnson.
“The board has determined that due to the significant potential benefits to Larimer Place, this opportunity is worthy of homeowner consideration.”
Atkinson, the broker with Fuller Sotheby’s, said this is an incredible opportunity, not only for Larimer Place, but for all of downtown, which is starved for high-end product.
“I’m hoping they approve it,” Atkinson said.
Think now is a good time to be buying at Larimer Place? Please visit COhomefinder.com.
Interested in learning what homes are available for sale in downtown? Please visit COhomefinder.com/downtown Denver.
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