Denver wants to buy a former state office building in Cap Hill so housing can be built at the site.
Mayor Mike Johnston’s administration is asking the City Council to approve spending $4.5 million for the 3-story office building at 251 E. 12th Ave., which the state put up for sale last year.
The building sits on an acre and was previously used by the state labor department. In documents prepared for the City Council, Denver’s finance department says it is buying the property to see it redeveloped.
“The city is acquiring the property in support of the Vibrant Denver Bond project to provide affordable housing and to mitigate involuntary displacement. A request for proposal seeking a qualified affordable housing development partner will be issued within weeks of closing on the property,” the documents state.
Voters approved the Vibrant Denver Bond in November. It includes $45 million for affordable housing project development, which the city said would be used to buy land or buildings or to prepare a site for development.
If approved by the council, the 251 E. 12th project would be the first use of that money.
“At this stage, itap too early to say for sure whether a future developer would reuse the existing building, although there is a lot of potential for adaptive reuse at this site,” Laura Swartz, spokeswoman for the finance department, said in an email.
The site is zoned C-MX-8, which generally allows a mix of uses up to 8 stories. JLL, which has marketed the property, called it an “excellent Cap Hill location for an owner-user or fantastic redevelopment opportunity for multifamily.”
The structure is nearly 130,000 square feet, according to JLL. Denver’s assessor values the property at $18.1 million — four times what the city is preparing to pay. The proposed deal equates to about $35 a square foot for the building or $103 a square foot for the land.
The City Council rejected a similar ask six months ago.
In October, Johnston wanted to pay $2.5 million for a shuttered auto shop at 1460-1480 Tremont Place. But the council voted 7-4 against it.
In that case, however, the Vibrant Denver Bond had yet to be voted on. Johnston wanted to use designated contingency funds for the purchase, and several council members specifically objected to that.
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