The owner of two dilapidated buildings along East Colfax Avenue will go before Denver’s Landmark Preservation Commission for a second time Tuesday, citing financial hardship as the reason he should be allowed to demolish the 130-year-old structures.
Property owner Pando Holdings, developer Kiely Wilson’s firm, is appealing the commission’s rejection last summer of its demolition application, and the financial hardship pleading is one of the final avenues left to get permission to tear down the former mansions in the Wyman Historic District.
The historic designation of the buildings at 1600 and 1618 E. Colfax Ave. complicates the demolition bid as city officials and the preservation-focused nonprofit Historic Denver have advocated to preserve the once-stately buildings that are now legally protected.
Wilson declined to comment Monday, saying he would only answer questions after the hearing.
His firm bought the buildings in 2017 for $3.2 million, planning to tear down the structures and build a mixed-use, seven-story residential tower that preserved the existing structures.
That plan was approved. But as it moved through a years-long city permitting process, the already-damaged buildings became home to squatters and, eventually, the scene of a fire last March that Denver firefighters extinguished from the outside due to the building’s deterioration.
After the fire, Pando received a letter from the city announcing the buildings had been deemed unsafe. Both structures are on Denver’s neglected and derelict building list. Wilson had until June to demolish or fix them. He opted for demolition, but the Landmark Preservation Commission vetoed that.
City officials and Historic Denver have pushed for the buildings to be restored, saying they made a commitment in 1993 to recognize the area as a historic district and are sticking to it.
Wilson appealed the commission’s June vote, arguing that preserving and restoring the properties would be a financial burden. That presentation is scheduled for Tuesday.
The developer argues in the demolition application that construction costs skyrocketed during the pandemic and restoration estimates far exceeded original price quotes.
In the application, Denver-based real estate and land-use legal firm Otten Johnson Robinson Neff + Ragonetti PC said it would cost about $12 million to rehabilitate the structures to get them to a point of resale. The firm estimated the resale value after restoration at $4 million.
“It’s tough to do a project when the outcome is an $8 million loss,” said Frank Locantore, executive director of Colfax Ave Business Improvement District, which is supporting the demolition bid.
John Deffenbaugh, Historic Denver’s CEO, countered, saying those rehabilitation costs are severely inflated. He estimated costs amounting to half of what the application claimed.
“The outcome of this case has potential to generate nationwide consequences for building preservation, calling into question the integrity of ordinances that protect historic buildings and districts across the country, and creating a ‘play book’ for developers that could have significant and detrimental consequences to ordinances that protect the quality of built environment in which we live,” Deffenbaugh wrote in a letter sent to the Landmark Preservation Commission opposing demolition.
“The burden of proof as to whether the structures should be demolished lies with the applicant. Historic Denver believes insufficient evidence has been provided to justify demolition and we strongly urge the commission to deny this application. Critical enforcement action is required as a matter of extreme urgency to halt the deterioration of these legally protected buildings.”
Locantore, who penned a letter in support of Pando’s demolition request, said he understands that, at one time, the buildings were a beautiful addition to the neighborhood and were worth revitalization.
“We’re in a situation where the repairs, because of the fire, outstripped the ability to recoup any money from it,” Locantore said in an interview. “If the buildings are not demolished, those buildings are going to look the way they look until they fall from the weight of their own gravity and the elements. The neighborhood and community will be saddled with an eyesore and a dangerous area for a good ‘nother decade.”
The application argues that denial of the demolition would result in Wilson being forced to invest millions of dollars into buildings he knew would be worth substantially less than the costs he would incur to refurbish them.
“Such a result is clearly prohibited by the law,” the application states.
Representatives of Otten Johnson Robinson Neff + Ragonetti declined to comment for this story.
“The Commission should understand that denial of the Appeals would constitute a taking for which the City would be liable under the United States and Colorado Constitutions to pay the Applicant just compensation that would exceed $10 million,” the application states. “To avoid this outcome, the Applicant respectfully requests that the Commission render a determination of economic hardship and permit demolition of the Properties.”
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