Public money will be used to fund the lion’s share of the $420 million needed to build the public pieces of the Union Station project.
Roughly $280 million has already been identified. It includes about $213 million from FasTracks funding, $16 million in state money and $50 million in federal highway funding.
All but $29 million of the remaining $140 million would come from a combination of Transportation Infrastructure Finance and Innovation Act loans, tax increment financing, historic-district tax credits and new-market tax credits.
The winning development team, Continuum Partners/East West Partners, would pay $29 million for the right to develop 19.5 acres around Union Station.
For the past month, development proposals submitted by the two finalists – Union Station Partners and a team led by Continuum Partners/East West Partners – have focused on how the bidders would pay for the work required to connect the century- old train depot with the upcoming FasTracks light-rail system and other transportation options. The first glimpse of financial information was obtained Tuesday by The Denver Post.
The document reveals that Continuum/East West is the high bidder, with a $29 million offer for the right to develop the 19.5 acres around the historic station. Union Station Partners bid $20 million.
The Executive Oversight Committee, the group appointed to select the development team, was charged with negotiating the best deal for the public, said John Huggins, director of economic development for the city of Denver.
While the purchase price was a factor in the decision, it wasn’t the only consideration, Huggins said.
“There’s development risk,” he said. “Can the selected team build what they’re proposing, and can it be financed? Given the short time frame in which the development is proposed to occur, can it generate the payback of public debt?”
The critical difference in cost of the two proposals is whether to bury light rail. The team led by Continuum Partners and East West Partners leaves light rail above ground but two blocks west of Union Station. Transit and public-space development would cost about $420 million, according to numbers calculated by Parsons Brinckerhoff and reviewed by the Regional Transportation District.
Union Station Partners planned to put the light-rail lines underground, with a total transportation and public-space cost of $495 million.
Both teams proposed using TIF, historic tax credits, new-market tax credits and metro districts to repay the debt. The more dense a project is, the higher the risk it won’t be built because of fluctuating market conditions, Huggins said.
Continuum/East West proposed a 1.7 million-square-foot project, far less dense than the 2.9 million square feet suggested by Union Station Partners.
Funding the renovation
Public money from a variety of sources will be used to fund the $420 million Union Station transportation project:
$230 million FasTracks funding and state transit funding
$50 million Federal funding
$140 million Transportation, Infrastructure, Finance and Innovation Act loan
Repaying the TIFIA loan
Tax increment financing and Metro District revenues from 1.69 million square feet of office, residential and retail development on 19.5 acres around historic Union Station
$29 million from Continuum/East West Partners for development rights
$1 million in historic tax credits
$20 million in new-market tax credits
Sources: Parsons Brinckerhoff, RTD
