- A judge rules in favor of the city and against neighbors in the so-called RedPeak case.
- Uncertain whether the neighbors will appeal.
- Will RedPeak now build 5 stories on one site instead of 4 stories
An important milestone in a two-year battle pitting a number of neighbors against the City of Denver, a landowner and a developer was reached this week when a judge refused to overturn zoning that allows five-story buildings in the heart of West Highland.
But whether the saga is over, remains unclear.
The plaintiffs, 10 neighbors who belong to a grassroots opposition group called No High Rises in West Highland, can still appeal the decision made on Wednesday by Denver District Court Judge Robert L. McGahey, Jr.
Tom Wooten, the head of an investment group that owns the properties and hoped to sell them to Denver-based RedPeak Properties, which would develop the buildings, also could seek damages against the neighbors.
Before the lawsuit was filed in April 2012, RedPeak had voluntarily agreed to limit the height of the building on the West Moncrieff parcel to four stories, while building five-story buildings on the other two sites on Meade Street and Lowell Boulevard. All three are north of West 32nd Avenue.
On Thursday afternoon, District 1 Councilwoman Susan Shepherd, wondered if RedPeak now will build five stories on Moncrieff.
“Maybe they will try to add some of those units back to try to recoup some of their costs,” Shepherd said.
Later Thursday, she spoke to a RedPeak official, and its game plan was still unclear.
“Frankly, I don’t think they know what they’re going to do yet,” Shepherd said.
RedPeak no longer has the properties under contract, but Shepherd was assured the company still wants to move ahead with the development.
“And obviously, Wootten is going to want to recover his costs,” Shepherd was told.
Shepherd and all of the other City Council members were named in the lawsuit, even though Shepherd was not in office when the properties were zoned U-MS-5 in June 2010.
The plaintiffs had argued that U-MS-5 was improper spot zoning and the buildings should not be allowed because West Highland is an “area of stability,” and not an “area of change,” under the Blueprint Denver land-use and transportation guide that is a part of the city’s Comprehensive Plan.
The judge rejected all of their arguments.
“I’m glad we have a decision,” Shepherd said. “I’m not surprised by the judgement.”
However, she in no way gloated or crowed about the city’s victory.
“I know this is incredibly disappointing for a lot of people,” Shepherd said. “I hope that we can just put this behind us and move forward.”
Shepherd said the plaintiffs have 45 days to appeal the decision.
“It certainly is their right to do it, but that will just draw it out and the battle will keep continue,” Shepherd said.
“I think it would be more productive to just move forward.”
InsideRealEstateNews.com has contacted Laura Goode, the founder of No High Rises; Laurie Rust, one of the pro bono attorneys for the neighbors, as well as several of the plaintiffs.
None have yet responded.
Jeff Hawks, an apartment broker with ARA, who has been following the saga since it began, said the judge made the right decision.
“I would say is that reasonableness is what won,” Hawks said.
“Colorado was built on logic and reason,” Hawks said.
“We started getting away from that. If people stop being reasonable, we will be like California,” where development is difficult, expensive and can drag on for years, he said.
The neighborhood, in fact, should have welcomed RedPeak, which is headed by Mike Zoellner.
“RedPeak and Mike are unique in that they are true long-term owners who keep properties in their portfolio for a long, long time,” Hawks said.
“Ninety percent of the developers build them with the idea of selling them as quickly as possible,” he said.
“For them, long-term is five years; they typically want to be out of it in three years.”
Zoellner, who has deep roots in the West Highland area, develops high-quality, energy efficient buildings because they take a long-term perspective, he said.
“Mike is a true son of Colorado,” Hawks said.
“If the neighbors could have picked any developer they wanted, Mike would have been their man.”
Unfortunately, the delay caused by the trial, and changing market conditions, means the RedPeak has less money to spend on the apartments, Hawks said.
“I would advise Mike to build the maximum number of units he can build,” Hawks said, which would mean adding a fifth floor to the Moncrieff building.
Indeed, under the circumstances, the neighborhood would be better off having a five-story building on Moncrieff, Hawks argued, although he is unlikely to convince any of the opponents.
“What the neighborhood wants is the highest quality units as possible,” Hawks said.
The highest quality units will attract young professionals with good incomes who eventually plan to start families and move into houses in the neighborhood, he said.
It also would attract a lot of empty nesters, who want to sell their big suburban homes and move to a neighborhood near downtown, he said.
“I have a lot of friends who are in their 60s who would love to live in a luxury apartment in West Highland, but there is nothing available,” he said.
But quality may suffer if RedPeak builds fewer units, he said.
“So, yes, I think the neighborhood would be better off with a five-story building on that site.”
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