RTD is exploring the sale of an entire square block it owns on downtown Denver’s 16th Street Mall.
The site – bordered by 16th, 17th, Blake and Market streets – houses the Regional Transportation District’s headquarters and the Market Street bus station.
RTD will hire real estate experts to assess the market value and potential reuse of the property as the transit agency considers relocating its offices to Union Station, General Manager Cal Marsella told RTD board members this week.
The move of RTD’s operations from the block would open up one of the largest commercial development opportunities in the heart of downtown Denver in years.
“I think it would be a very attractive block,” said Terry Matthews, senior vice president with the real estate firm Fuller and Co.
The site is especially attractive because it offers “a 17th Street address with direct access to the 16th Street Mall, like the Tabor Center and Republic Plaza,” said Matt Brower, a broker with the Grubb & Ellis commercial real estate firm.
The 20-acre Union Station site is scheduled for redevelopment, and RTD plans to ask companies that will lead the reconstruction to include a new office building for the transit agency in their plans, Marsella said.
RTD officials expect to ask for proposals from prospective developers of the Union Station area, which will serve as the transit hub for the agency’s $4.7 billion FasTracks expansion plan.
The area around Union Station is expected to support 1.4 million square feet of new commercial development.
Commercial real estate experts say the block between Market and Blake might sell for between $16 million and $23 million and would likely end up with a mix of office, residential and retail uses.
With FasTracks and Union Station as a future transit hub, it’s expected that Lower Downtown properties will only increase in value, said Errin Welty, senior research analyst with Grubb & Ellis.
“Anything toward this end of the mall is more sought-after, more valuable,” Welty said, adding that office vacancy rates in LoDo are about 6.5 percent, far less than the 17 percent in other parts of downtown.
RTD’s ownership of the city block dates to the construction of the 16th Street Mall in 1982, said RTD spokesman Scott Reed.
At that time, the agency located its headquarters at 16th and Blake, and built the mall shuttle bus right-of-way, Reed said.
The federal government paid for a portion of the downtown transit development, and the Federal Transit Administration would have a stake in any proceeds from the sale of the block. But the federal stake could be transferred to new RTD office and bus facilities at Union Station, officials said.
There is no timetable for the move of RTD to Union Station until a master developer is selected for the project and a plan is finalized.
The Denver Regional Council of Governments might join RTD in a Union Station office building. DRCOG administrative officer Betty McCarty said her organization built an “opt-out” clause into its current office lease so the group would be able to make the move to Union Station if it has that opportunity.
DRCOG, which represents about 50 county and city governments in the Denver area, has 89 staffers in leased office space near South Colorado Boulevard and Cherry Creek Drive South.
Relocating its headquarters to Union Station would be “consistent with the transit and land-use policies of DRCOG” and give the public and agency board members easy access to meetings using rail and bus transit, said Boulder County Commissioner Will Toor, chairman of DRCOG’s board of directors.
Staff writer Jeffrey Leib can be reached at 303-820-1645 or jleib@denverpost.com.
