When residential development pushed his nightclub out of the Prospect neighborhood, Martin Chernoff started buying property around his new location north of downtown.
Today, the 65-year-old proprietor of Tracks has 8 acres along Walnut Street, which makes him one of the largest property owners in the neighborhood. And with a transit station planned a block from his holdings, Chernoff sees potential to build thousands of residences.
Referred to as 40th and 40th, the FasTracks rail station will be the first stop out of Denver Union Station on trains heading east to the airport.
When Chernoff started buying the property five years ago, he didn’t know there would be a transit stop a block away.
“I just knew this was close to downtown and there was no reason it shouldn’t get valuable,” he said. “I figured I was buying it at the lowest price it would ever be, so there was no risk.”
Chernoff followed the same thinking he had when he opened Tracks in the Prospect neighborhood.
“You just knew that somewhere down the road it would get more valuable.”
With its snarl of tracks and railyards, the largely industrial area just south of Interstate 70 and the Denver Coliseum is a challenge to navigate. The 50-acre TOFC, or Trailer on Flat Car yard, where semi-trailers are loaded onto rail cars, is a gulf in the center of the neighborhood.
Capitalizing on transit
Although the station isn’t slated to open until 2014, the city and developers are already creating plans to capitalize on the growth it is expected to generate by creating a new urban community.
This summer, Byron Weiss plans to start building the second phase of lofts at Denver Rock Drill, a 306,000-square- foot complex on 9 acres between Williams and Franklin and 39th and 40th. Eventually the buildings, dating from 1908, will be converted into hundreds of residences, courtyards, restaurants and shops. He will relocate his used warehouse equipment dealership to Commerce City and expects to spend more than $40 million doing it.
Weiss purchased the property in 1993, long before talk of a transit station in the vicinity.
“When we started developing lofts, everybody thought we were nuts,” said Weiss, who operates the business with his sons Andy and Brett.
But their instincts have proved correct. The price of land has more than doubled in the last five years, said Win King, an infill specialist with Land Advisors Organization. Today, depending on zoning, land is trading for up to $60 a square foot.
“When the last cycle cooled down, this area was just warming up,” King said. “When the market came back in mid-2005, this area started to resurge because the groundwork had been laid.”
More recently, the promise of a station has lured developers like Peter Barnes to the neighborhood. Earlier this year, Barnes purchased a block on Walnut between 37th and 38th where he plans to spend about $20 million building up to 150 residential units, as well as shops, restaurants and offices.
“We’re making a pretty big play on it,” Barnes said. “I kind of see it where LoDo was before LoDo hit.”
While plans for a station are cause for optimism in the development community, those already in the neighborhood are concerned about the train traffic the Regional Transportation District’s proposed maintenance facility will generate. The big issue, they say, is the type of technology that will operate the trains: electric or diesel.
“We’re taking the brunt of the system with the maintenance facility,” said Kevin Scott, who has lived in the area for five years. “All the trains will converge there.”
City Councilwoman Judy Montero is pushing for RTD to use the cleaner, quieter electric technology, which would minimize the maintenance facility’s impact on the neighborhood.
“Diesel trains are really loud – 10 decibels – and travel really slow,” she said.
RTD is negotiating with Union Pacific to buy up to 90 acres northwest of the tracks where it will put its maintenance facility. The railroad is imposing restrictions prohibiting residential development on the site, said Bill Sirois, RTD’s manager of transit-oriented development for FasTracks.
Three ways to develop
Union Pacific owns another 50 acres southeast of the tracks that the city has targeted for redevelopment. It’s unclear whether the railroad would prohibit residential development of the property.
The city has contracted with PB Placemaking to create a plan for that property and other land surrounding the station.
“PB Placemaking has developed three concepts they’re calling ‘crash-test dummies,”‘ said Evelyn Baker, senior city planner. “We’ll pull the best bits out of each.”
The concepts are:
In any of the three scenarios, it is crucial to connect the neighborhood east of the station with Brighton Boulevard and the River North area across the tracks, said developer Mickey Zeppelin, who’s looking at real estate in the neighborhood.
“What you want to avoid is creating another place to leave the city from, or another place to park your car,” Zeppelin said. “A park and ride that’s the last cheap parking before you get to downtown is something that really concerns me.”
As for Chernoff, he’s not worried about residential development pushing him out of another neighborhood.
“I hope the property gets so valuable that the highest and best use is for something other than a nightclub,” he said. “Then I can retire with a smile on my face.”
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
