The Denver Downtown Development Authority has declined, at least for now, to help finance a conversion of an office building along 17th Street into apartments.
Denver-based Revesco Properties, led by Rhys Duggan, is spearheading the proposed conversion of 475 17th St. in conjunction with the building’s owner, a German pension fund, and asset manager Civicap Partners.
In its application last October, Revesco said turning the 16-story building into 140 apartments would cost $77 million. It asked for a loan of $29 million — about 38% of that. That works out to about $207,150 a unit.
Evan Kurtis, director of development and construction at Revesco, told BusinessDen that the DDDA didn’t like three components of the application: the total amount requested, the amount per unit and the 15-year payback period.
“We basically heard in February unofficially,” he said of the rejection, which was first reported by the Denver Business Journal.
The DDDA, a city affiliate, has up to $470 million in bond funding to spend on revitalizing downtown. Office-to-residential conversions, which would allow more people to live downtown, have been a priority for the organization.
“Itap very expensive compared to our other deals, and I’m not sure why,” said Bill Mosher, Denver’s chief projects officer.
The DDDA has awarded loans to four other downtown office conversions:
• $63 million for 710 apartments at 621 and 633 17th St. ($88,750 a unit)
• $14 million for 178 apartments at 110 16th St. ($78,650)
• $14.5 million for 120 units at 910 16th St. ($120,850)
• $17 million for 116 units at 820 16th St. ($146,550)
A lender recently foreclosed on 820 16th St., however, killing that project.
Revesco assumed that 563-square-foot studios at a converted 475 17th St would rent for $1,500, according to its submittal, and 841-square-foot one bedrooms for $2,112. The company’s plans also called for 13 two-bedroom and 13 three-bedroom units.
Revesco can alter its application and resubmit it. Kurtis said Revesco is exploring low-income housing tax credits as a possible way to reduce the needed loan amount.
Mosher said the DDDA also opted not to finance a $64.5 million request to assist development of a 36-story hotel with apartments and hotel rooms on the former Greyhound block. That request was made by Chicago-based Golub & Co. and New York-based Rockefeller, which bought the block in 2020.
Revesco is building apartments around Denver with Denver-based Alpine Investments. And earlier this month, the company discussed its desire to build 50 homes adjacent to The Fort restaurant near Morrison, which Revesco and Denver-based City Street Investors purchased in January. The two firms hope to have the restaurant and land annexed into Morrison.
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