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Alliance set to buy former RedPeak deal

Highlights:

  • Alliance Residential wants to buy 32nd and Lowell properties.
  • RedPeak previously had them under contract.
  • Landmark Commission meeting on church building is today.
The Landmark Commission today will consider facade application for the south-facing wall of the former Beth Eden Church.

The Landmark Commission today will consider facade application for the south-facing wall of the former Beth Eden Church.

A large Phoenix-based apartment developer is negotiating to buy three parcels in the heart of West Highland that had been the subject of high-profile zoning lawsuit, several sources have told InsideRealEstateNews.com.

Alliance Residential wants to buy the parcels north of West 32nd Avenue at Lowell Boulevard, according to sources.

As part of the deal, Alliance also is buying the architectural plans from Denver-based RedPeak Properties for the three luxury apartment buildings that would incorporate a historic church into the new community, according to people familiar with the deal, who spoke on the condition that they not be identified. RedPeak had hired RNL to design the buildings in the area known as Highlands Square.

Zoning allows Alliance to build 5-story buildings on Lowell Boulevard, next to the historic Beth Eden Church building, as well as 5-story buildings on Meade Street and West Moncrieff Boulevard.

Historic designation topped height restrictions

Tom Wootten, the managing partner of the parcel’s ownership group, earlier had agreed to limit the height on Meade and Moncrieff to four stories each, if the church building was not granted historic designation.

Wootten also said he would be willing to provide a covenant to preserve the distinctive Tudor-style facade of the church building, effectively saving the building, and limiting the height of future buildings on two of the three sites, if the building was granted a certificate of non-historic status.

The former Beth Eden Church in West Highland has been designated as a historic building.

The former Beth Eden Church in West Highland has been designated as a historic building.

That would give a future developer more flexibility without being hamstrung by historic designation rules, he told the City Council last spring.

However, in May, after listening to hours of testimony overwhelmingly in favor of historic designation, the City Council approved designating the building constructed in 1931 as a Landmark. Historic Denver also supported the designation.

Today, RNL Design is scheduled to present an application to the Landmark Preservation Commission for some facade modifications on a portion of the former church building at 3241 Lowell Boulevard.

The application calls for removing a south-facing retaining wall and adding a street level entrance and patio, as well as replacing and repairing windows. It also calls for adding a connector to a new building. Asphalt shingles, fascia and gutters would need to be removed and replaced with similar materials. The new entrance will be in a newly exposed basement wall, having little impact on the original materials and features, according to the planning department.

The Community and Planning Development staff recommends approval, with the condition that details of the windows be brought back later to the staff for review.

The meeting starts at 1 p.m. in Room 4.F.6 in the Wellington Webb Municipal Office Building at 201 W. Colfax. Ave.

A number of developers have approached Wootten about buying the parcels after RedPeak pulled out of the project in February. RedPeak left with rising costs it felt it no longer could built the quality of building it wanted and achieve the kind of returns its investors were seeking.

Sale price likely north of $7 million

Alliance likely is paying more than $7 million for the property, real estate officials estimated, based on deals that had been presented to Wootten by other developers. A $7 million price tag would equate to about $112 per square foot.

By contrast, a parcel for a luxury apartment building in LoHi, which was shovel ready and had architectural plans in place, last year sold for $226 per square foot.

RNL designed the proposed luxury apartments to be constructed next to the former Beth Eden Church on Lowell Boulevard.

Wootten’s group paid $3.75 million for the parcels in 2011, or $60.34 per square foot. Adjusted for inflation, Wootten’s group paid $3.97 million in today’s dollars.

RedPeak had the sites under contract for $4.55 million, or $73.30 per square foot, according to documents from the zoning trial, in which 10 neighbors unsuccessfully argued that the U-MS-5 zoning designation for the parcels was a violation of Blueprint Denver and should be sent back to City Council to be rezoned.

If RedPeak had bought the property, it would have had to reimburse Wootten for his costs at the closing. Wootten testified during the zoning trial that his group had invested $1 million in the property since buying it, which included razing a non-historic addition to the church building. Before the lawsuit was filed, RedPeak also had agreed to build a 4-story building on Moncrieff. It is unclear how many stories Alliance would build on Moncrieff, if it ends up buying the parcels.

In 2012, Alliance took over a plan from Denver developer Mickey Zeppelin in Cherry Creek. That community, the 261-unit Broadstone Gardens at Cherry Creek, is one of two luxury rental communities in Denver owned by Alliance, according to Apartment Appraisers & Consultants.

It also owns the 226-unit TwenyOne1 On Market at 2101 Market St. in downtown, according to Apartment Appraisers & Consultants. In addition, it manages more than 2,300 units in the Denver area for other owners in nine separate communities, according to AA&C.

Nationally, Alliance Residential owns more than $3 billion in properties and manages a portfolio of properties worth more than $9 billion.

Alliance has not returned several calls from InsideRealEstateNews.com and is unlikely to do so, because of a nondisclosure agreement, according to people familiar with the deal.

Interested in buying a home in West Highland? Please visit COhomefinder.com.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.