Three-and-a-half years after buying the former Veterans Affairs hospital, GM Development has begun refashioning it into apartments.
The Denver-based firm broke ground on the redevelopment in late April, according to GM executive Ben Gearhart.
“The 10-story landmark has watched over Denver for generations, and we are proud to bring street-level activation back to a block that has been dark for too long,” he said.
The project will turn the 490,000-square-foot main VA building at 1055 Clermont St., along Ninth Avenue just east of Colorado Boulevard, into 493 apartments. The base of the building will incorporate about 15,000 square feet of retail space and about 35,000 square feet of medical office space.
The latter is intended to mesh with the neighboring Rose Medical Center, which once expressed an interest in buying the former VA hospital itself.
The hospital, known as the Rocky Mountain Regional VA Medical Center, moved to Aurora in 2018.
GM was the top bidder for the 8.2-acre property in an auction held by the federal government in August 2022. The firm closed on the acquisition the following month, paying $41.3 million. The deal included multiple buildings, including an eight-level parking garage.
GM has one investor in the project, whom Gearhart declined to specify. The firm recently secured $130 million in financing through the Department of Housing and Urban Development with the help of Walker & Dunlop. A key part of that is historic tax credits.
GM specializes in adaptive reuse projects and has done work both locally and in other states. In 2020, the firm saved a former funeral home in Denver’s Berkeley neighborhood from demolition. The firm also renovated and sold a former hostel in Uptown.
Gearhart said those projects have given GM “a unique skill set” that the VA building needed.
“And this one was in our backyard,” he said, adding that the firm liked the neighborhood’s proximity to Cherry Creek and Colfax Avenue.
The former VA campus is by far the largest the company has taken on. The biggest building the firm worked on previously was about 100,000 square feet, Gearhart said.
Early in its ownership, GM dealt with numerous break-ins at the property. But the biggest surprise ended up being “how well engineered the building was,” he said.
Interior corridors will remain the same and original marble will remain in the lobby, which has a large atrium, he said. About seven months of interior demolition and abatement work preceded groundbreaking.
Gearhart declined to discuss rents or the demographic the building will target. Eight percent of units will be reserved for those making up to 60% of the area median income.
The project is slated to deliver in three phases, from late 2028 into 2029. I-Kota is the general contractor. Exact Architects is the project architect.
More work could occur at the site in the future. An acre is available near the corner of Ninth Avenue and Bellaire Street, Gearhart said. And a Chicago firm continues to pursue a self-storage project to the rear of the main building.
“Itap a unique story and a success story to be able to navigate through the environment of where the multifamily market is and preserve Denver history,” Gearhart said.
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