When Red Peak Properties converted an old 31-story office building at 1600 Glenarm Place into apartments, it took a substantial bite out of the Downtown Denver Business Improvement District’s revenue.
In 2005, Red Peak paid the BID an assessment of $36,700. This year it paid $4,200 after opening 1600 Glenarm as apartments with street-level commercial space, said Mike Zoellner, the company’s president and chief executive.
Residential property owners are not required to pay into the BID.
Each time a parking lot, warehouse or office building is redeveloped for residential use, the remaining commercial property owners are asked to make up the lost revenue.
The district’s 2007 budget is $4.6 million, about $2 million of which will be spent maintaining the area bounded by Speer Boulevard and 20th, Wyn koop and Grant streets. The rest is used for such things as holiday decorations, safety and management.
Since 1995, the BID has lost assessments totaling $91,256 as 466,622 square feet of land and 1.6 million square feet of space were converted to residences. People who own the other 350 commercial buildings in the 120-block district have been asked to make up the difference.
Developer Buzz Geller, who owns five parking lots within the BID, said his assessment has increased between 4 percent and 6 percent each year.
The only year the BID posted a gain was in 2002, when Continuum Partners converted a 6,122-square-foot parking lot into 16 Market Square, a building that includes 333,592 square feet of commercial space.
That year it paid the BID $14,649, nearly three times as much as it paid in 2001.
With about a half-dozen new office buildings planned downtown, the BID stands to gain additional revenue in future years.
Geller disagrees with the formula used to calculate the assessments, which is based on the property’s size rather than its total value.
All of the land, but only 15 percent of a building’s square footage, is included in the formula.
“Why are we being taxed at a higher rate than a person who has an office building?” he asked. “It should be based on the net worth of the whole thing.”
Since 1999, the rate at which parking lots and commercial buildings have been converted to condos and apartments has escalated.
It’s a trend some argue stretches the BID’s resources, as residents demand more services.
“We’re adding residents to the building that some would argue are more management- intensive than office tenants,” Zoellner said. “They’re 24/7, as opposed to office workers who are 8 to 5 Monday through Friday.”
Residents generate more trash, request more security and have even suggested providing doggy clean-up bags.
To provide them with additional services, the Downtown Denver Partnership is attempting to create a Community Improvement District (CID), said John Desmond, the partnership’s vice president of urban planning and environment. Downtown residents would be charged assessments for those services.
“It’s about empowering residents and their neighborhoods to have their own revenue tool and their own resources to do their projects,” Desmond said. “The BID would not control anything under the CID. The BID is going to continue to do its thing regardless.”
But residents are skeptical about the benefits they would receive, said John Maslanik, president of the Downtown Denver Residents Organization.
They’re already paying property taxes for services such as trash removal.
“There should be substantial credits from the city back to the CID if we’re going to obtain those services through the CID,” Maslanik said.
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
