Denver permitting is ‘worst in the western U.S.,’ caused foreclosure, exec says

Todd Gooding expected to spend a year renovating the industrial property his firm bought in 2022 in Denver’s Central Park.

Instead, completion took two years — a delay he blames on the city’s permitting process.

“It is by far and away the worst in the western U.S.,” said Gooding, president of Oregon-based developer ScanlanKemperBard Cos.

Earlier this month, SKB’s lender initiated foreclosure on the company’s 140,000-square-foot building at 8000 E. 40th Ave., which was set to be rebranded as Central Park Foundry. A leasing brochure advertised it for “industrial, flex R&D and creative uses” with suite sizes as small as 4,700 square feet.

But Gooding said the building has no tenants.

“We kind of missed our leasing window,” he said.

SKB bought the building on 4.7 acres, plus a 0.75-acre parking lot across the street, in March 2022. Public records don’t reveal what the firm paid, but do show that SKB took out a loan at the same time from New York-based Bridge Investment Group for up to $23.58 million.

The loan was set to mature in March 2026, according to the paperwork. In filing for foreclosure this month, Bridge said SKB still owed $18 million in principal.

With no tenants, Gooding said, the property has had no income to stay current on loan payments.

“We’ve offered to work with the lender to take back the property,” he said.

SKB also owns York Street Yards in the Clayton neighborhood, which counts among its tenants Rivian, a dog park bar and packraft maker Kokopelli. The firm bought that property in 2020 for $77 million, and got it rezoned last year. (Gooding also expressed some frustrations with Denver during that process.)

SKB initially thought it could replicate its York Street Yards success at Central Park Foundry.

Gooding said he thinks things would have been different if Central Park Foundry had been completed within one year, as originally expected.

“Time would tell, but we did have a lot of tenant interest early on,” he said. “And we couldn’t commit to timing because we didn’t have our building permit.”

In addition to Portland, SKB has done projects in the Seattle and Phoenix metro areas, as well as the Bay Area. Given Denver’s permitting situation, he’s “not sure how involved we’re going to be” in the city going forward, although he added that he still likes the demographics and sees opportunities in the broader region. SKB already does work in other Front Range municipalities.

“We’ve been pretty active in Boulder and Broomfield, and to be honest, Boulder is one thousand times better,” he said.

In terms of Denver’s permitting process, “nobody went out of their way to make our life hard,” he said. But there would constantly be some new issue popping up that hadn’t previously been a problem.