Central Business District
Multifamily Rental Housing
ULI Global Awards for Excellence 2015 Winner
A brief is a short version of a case study.
Denver Union Station is a large-scale mixed-use development—including office, residential, retail, hotel, and transit uses—in downtown Denver. The project has been a transformative effort for downtown Denver and for the larger region. The redevelopment of Denver Union Station turned a vacant parcel of land and an underused old train station into a progressive urban redevelopment that is an exemplary model for cities and transit systems worldwide. The project has also established a new district and center of gravity within downtown Denver. The project involved a public/private partnership among private developers and various public agencies including city, county, state, and federal entities.
The Denver Union Station (DUS) redevelopment is that rare project that elevates not just its immediate surroundings, but an entire city and region. By connecting downtown Denver to its new airport and the larger Denver metropolitan area through multiple modes of transportation, DUS has not only transformed a downtown neighborhood, but also created a national and global model for large-scale, mixed-use projects.
Since 2014, the year in which its initial phases opened, the project has succeeded as its stakeholders had envisioned, integrating disparate elements into a cohesive, inviting urban center. Some 19.5 acres of new office, retail, hotel, and residential development are encompassed in the core area of the project, including the freshly renovated Union Station at the center, where multiple modes of transportation converge upon new bus, light rail, and passenger rail facilities, all comfortably integrated with restaurants and inviting public spaces. Surrounding parcels encompassing more than 40 acres also are part of the larger Union Station plan.
One of the largest undertakings of its kind, the Denver Union Station project is also one of the most complex and successful collaborative public/private development efforts in the United States. It also exemplifies the power of transit-oriented urban development to completely transform a neighborhood and a city.
The Union Station site is located between a large swath of railroad tracks on one side and downtown Denver on the other. Recent development activity had brought revitalization to much of the surrounding area. The Lower Downtown (LoDo) area, just to the south and east of the site, has become in recent years a very successful urban revitalization story in its own right. The development of the new Riverfront Park urban community, to the north and west on the other side of the railroad tracks, also highlighted the redevelopment potential of the area. Riverfront Park was connected to the 16th Street mall by a pedestrian bridge over the tracks, and this new bridge brought an increase in pedestrian traffic through the area.
But prior to redevelopment, the area immediately surrounding Union Station was largely devoid of pedestrian activity. The Union Station Terminal itself was run-down and lacked commercial viability, serving as office space for Regional Transportation District (RTD) and a few other leased options, and the Great Hall was empty, filled only with old train benches. An abandoned rail yard occupied the remainder of the grounds. Nearby, meanwhile, the portion of the Central Platte River Valley between the station and Riverfront Park was largely undeveloped.
The core Union Station parcel itself as acquired by the RTD measures 19.5 acres, and is generally bounded by 16th Street, Wewatta Street, 18th Street, and Wynkoop Street, with one additional triangle parcel to the west of 16th Street and a parcel to the east of 18th Street. Additional parcels to the north of the core site, on seven separate blocks, encompass an additional 40-plus acres of land that is being developed by various developers including Shorenstein, Holland Partners, Greystar Capital, and Hines.
Development Background and Timeline
The redevelopment effort began in 2001, when the RTD acquired the DUS site in cooperation with the City and County of Denver (CCD), the Colorado Department of Transportation (CDOT), and the Denver Regional Council of Governments (DRCOG). Following this, the RTD subsequently extended the successful Denver Light Rail transit and 16th Street Mall Shuttle to Union Station.
In 2002, the Denver Union Station Project Team was formed to create a master plan and prepare an environmental impact statement (EIS) for Union Station. At this time, civic leaders also began to explore how Union Station might help solve Denver’s problem with traffic, parking, and pollution through the creation of one central, multimodal depot.
The Denver Union Station Master Plan was developed and approved in 2004 by each of the partner agencies (RTD, CCD, CDOT, and DRCOG). In addition, Denver voters approved FasTracks—122 miles of new commuter-rail and light-rail lines and 18 miles of bus rapid transit, radiating out from Denver Union Station. In 2005, RTD also began the master developer selection process by issuing a request for qualifications.
In 2006, RTD issued the master developer request for proposals for the Union Station development and subsequently selected the Union Station Neighborhood Company (USNC), a joint venture entity of East West Partners and Continuum Partners, as the master developer to head the redevelopment of Union Station. USNC then began work with partner agencies to create a detailed master plan that was achievable and financially feasible. As part of the master plan, USNC made a significant financial commitment to the project with land purchases totaling $38.46 million for six parcels.
USNC kept the project moving forward during the 2008–2009 recession. In October 2008, the Federal Transit Administration (FTA) signed the Denver Union Station Record of Decision, which gave the green light to proceed with the redevelopment. Following this, the partner agencies established the financing and governance structure for the public infrastructure and transportation improvements at Denver Union Station. The Denver Union Station Project Authority (DUSPA) was also created, which includes representatives from DRCOG, CDOT, RTD, CCD, and the Denver Union Station Metropolitan District. DUSPA then hired Trammell Crow Company as their owners’ representative.
In 2010, construction of the Union Station Multimodal Transportation Center began, and in February 2010, the Federal Transit Administration announced loans to renovate Denver Union Station, as well as $120 million in grants for the three FasTracks rail corridors. Following this, USNC closed on North and South Wing development parcels.
In 2011, the Union Station Alliance was chosen as the developer of the historic Union Station Terminal, and in 2012, Wynkoop Plaza construction began, as well as construction on the North Wing and South Wing parcels and redevelopment of the Union Station Terminal.
The project opened in April 2014 with the opening of the North and South Wing parcel buildings, in May the bus facility opened, and in July the Union Station Terminal building opened, including the hotel within. In 2016, the commuter-rail portion of the project opened, including the light-rail line to Denver International Airport. All planned development in the Union Station neighborhood is scheduled for completion by 2019.
Development Entities and Development Finance
Numerous public and private entities were involved in the development, including the RTD, CCD, DRCOG, CDOT, USNC, and DUSPA. Also, Trammell Crow Company (TCC) was appointed owner representative for DUSPA. The FTA also provided significant financing. In addition, a separate process conducted in 2010 resulted in the selection of Union Station Alliance as the developer of the Union Station Terminal.
The master developer for the project is the USNC, a joint venture of East West Partners and Continuum Partners. Both of these entities had previous experience with large-scale urban projects in the Denver area. East West Partners had previously developed Riverfront Park, just across the tracks from Union Station, and Continuum Partners developed Belmar, a large mixed-use town center in suburban Denver.
A public/private partnership was essential in financing the project. Initially, the intention of the involved parties was to finance the estimated $480 million–plus initial development cost with tax-exempt bonds—for the transit, land acquisition, and Terminal renovation (excluding costs incurred by individual developers for the projects they built on the various parcels). Those plans were scuttled when the recession hit in late 2008, and the team turned to other sources. It obtained $187 million in cash and equity in the form of grants and direct sources, with each of the sources introducing new partners to the project. This included a significant investment by the master developer, USNC, which committed $38 million of its own money for land purchases.
Still, the team needed to find an additional $300 million to complete the core area of the project. The void was ultimately filled by two federal programs that hitherto had never been used together to fund a project of this type: Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, and Railroad Rehabilitation and Improvement Finance (RRIF) loans. The team succeeded in landing a loan of $145 million from the former and $155 million from the latter. The repayment sources were twofold: the RTD provided $165 million, which was annuitized at 5.65 percent as the first source of repayment; and the Downtown Denver Development Authority was created to encumber with new taxes approximately 40 acres of new development to serve as the second source of repayment. Finally, the CCD provided a moral obligation backstop against repayment shortfalls up to $8 million per year. The total development cost for the core area totaled around $487 million.
Another creative financing feature that enhances the project’s fiscal stability is the decision to create a metropolitan district to help fund regional transportation infrastructure associated with the project. The funds collected via this vehicle—estimated to be $30 million over the life of the project—serve as an additional repayment stream for project financing.
Planning and Design
The core plan for the Union Station redevelopment includes four new buildings to the north and west of the station/tracks—including office, hotel, apartments, and condominium buildings—and two new office buildings, flanking the historic terminal building, to the south of the station. Numerous additional parcels, not part of the original 19.5 acres, are located to the north of the station, and the total space at buildout on the roughly 60-acre total site area is planned to include 4.6 million square feet of office, 734,000 square feet of retail and restaurants, 550 hotel rooms, and 3,000 residential units.
The innovative design plan submitted by the USNC was chosen in part because it was ambitious in scope, pedestrian-friendly, ecologically sensitive, and less costly than competing plans. The authors of the plan saw great opportunity not just to restore Union Station Terminal itself, but also to make a broader gesture in which the station would serve as the focal point for a multimodal transportation hub and a large-scale redevelopment with residential, commercial, and retail elements that would transform one of the last neglected areas of the otherwise fast-gentrifying LoDo neighborhood.
The USNC plan also solved a problem. In the early stages of planning, it was the intention that 18th Street run through the project at grade, the perceived value being that cars could be brought into the neighborhood more easily. However, this plan created difficulties for the design of the train hall for northbound trains, requiring that it go underground, which posed major negatives: underground spaces for trains are usually unattractive; the activity of the station would be driven away from the retail at the street level; and the trains would have difficulty getting in and out of the station.
As part of its proposal to be considered as master developers, the USNC devised an innovative design plan that kept the northbound trains at grade, bringing only pedestrians over the tracks at 18th Street and forcing cars down 16th Street. Ultimately, this allowed for significant cost savings (about half the cost of the alternative plan), improved programming, and provided a significant architectural opportunity, which is today a signature design element of the project.
Symbolically, the stately exterior of the Union Station Terminal building, crowned by huge red letters that spell “Travel by Train,” serves as the centerpiece for the project, together with the train platform and its dramatic fabric canopy. With its swooping curvilinear shape and structure, this canopy has become an iconic new visual feature in downtown Denver.
The Terminal building has been renovated to exceed its original splendor. In the station renovation, Union Station Alliance aimed to create a space that the community could be proud of and enjoy while preserving and exhibiting the building’s history. In the Great Hall, workers restored the terrazzo floors, and cleaned and repainted the 2,000 hand-carved, decorative columbine flowers along the windows and balconies.
Original metal sconces around the Great Hall were restored. Elsewhere in the structure, exposed original beams and brick in the hotel’s loft-style guest rooms illustrate station history. The South Wing’s historic staircase also was restored.
The Great Hall and Wynkoop Plaza, a quarter-acre space serving as the historic entry to the Terminal, accommodate heavy pedestrian traffic with the ability to convert into a farmers market, concert venue, dance hall, and more.
Sustainable design, construction, and operation were infused into the project, including building techniques that minimize the footprint, the use of renewable energy sources and natural light wherever possible, stewardship of resources via careful monitoring of water and energy consumption during all aspects of development, and innovative on-site stormwater management techniques to reduce flood risk and improve water quality.
The presence of several new transit modes and a transportation facility with a Leadership in Energy and Environmental Design (LEED) certification, along with applications for future LEED Neighborhood Development (ND) designation for the mixed-use neighborhood and individual LEED certifications for privately constructed buildings, creates a commendable sustainable urban environment. Other green achievements include naturally lit and ventilated railway platforms and Colorado utility incentives by Xcel Energy for the underground bus facility and site lighting.
The project also uses low-flow toilets and an energy-efficient first-of-its-kind exhaust system, and most unused construction materials were recycled. Union Station also includes downtown Denver’s first commuter bike station, offering lockers and bike racks for day use as well as memberships for daily commuters.
Status, Leasing, and Performance
Phase I of Denver Union Station has been completed and is leased. It includes the Union Station Terminal building, bus terminal, train platform, light-rail platform, North Wing building, South Wing building, and public plazas and infrastructure. An additional 1,800 residential units and 2.34 million square feet of commercial property (office, retail, or hotel) is completed, under construction, or in the final design and approval phases on surrounding parcels.
The Union Station Alliance’s leasing strategy for the terminal building site focused on attracting tenants that would establish Union Station Terminal as a destination in its own right, not just a stopping point for travelers. From the outset, the partners agreed to pursue a Colorado-based tenant mix. Larimer Associates, the project’s leasing agent, used its local resources to determine the best tenant mix for the building. Union Station Terminal’s retail spaces were 100 percent preleased at 20 percent above market rates for the submarket. In its first year, The Crawford Hotel was one of the top-performing hotels in the city in terms of room rate, occupancy, and revenue per available room (RevPAR). The hotel is operated by Sage Hospitality.
Lease payments to the property owner, RTD, were set to begin after the first year, two years ahead of pro forma projections, which called for lease payments to begin after the third year. Debt-service coverage for Union Station Terminal’s first full year is 3.0.
Outside the Terminal building itself, the first two commercial structures—the North Wing and the South Wing—were 100 percent leased upon completion, while the adjacent 1900 16th Street building, once largely vacant, is today fully leased, having been folded into the Union Station neighborhood redevelopment project.
The North and South Wing buildings were recently sold for more than $600 per square foot. Two other office buildings in the plan also have experienced vigorous leasing activity. Today, lease rates in the Union Station area range from the high $30s per square foot up to the mid-$50s per square foot, with operating expenses estimated in the range of $14 per square foot. The current average commercial lease rate for the Denver metro area is around $23 per square foot, significantly less than what the Union Station neighborhood is garnering.
As for the residential component of the project, some 2,000 units are under construction or have been completed in the Union Station area as part of the master plan. Apartment projects in the Union Station neighborhood are achieving higher rents per square foot than any of the surrounding neighborhoods. At the same time, the Union Station neighborhood is also building more affordable housing units than required by local zoning statute, ensuring that the Union Station neighborhood is a place for everyone.
And unlike many projects of this scope that languish in delays, the various aspects of the Union Station neighborhood project now are on target for completion by 2019, a full ten years ahead of projections.
Observations and Lessons Learned
Nothing was more instrumental to the success of the Denver Union Station project than the unique public/private partnership that underpins it. From the earliest stages of the project, all key entities were engaged in the dialogue around the planning process. The Regional Transportation District, City and County of Denver, Denver Union Station Project Authority, Colorado Department of Transportation, Denver Regional Council of Governments, Union Station Neighborhood Company, and the Union Station Alliance all worked together and cooperatively in redeveloping Denver Union Station.
Years of constructive exchange of ideas and feedback resulted in many innovative features that make Denver Union Station a model for transportation agencies, urban planners, developers, and communities, including the following:
• A transit hub where nine types of transportation converge, including pedestrian and bicycle traffic;
• All the rail and transit lines, including commuter, light rail, Amtrak, and bus stop at Union Station, providing a central location for riders to make transfers, shop, dine, and connect;
• An expandable design that is capable of growing in step with the neighborhood, city, and region;
• New and much-needed commercial and residential space, including a significant number of affordable housing units, in property adjacent to the station, all emphasizing walkability and blending effortlessly with the existing LoDo neighborhood.
Since the completion of Phase I in 2014, Denver Union Station is exceeding expectations on a variety of fronts. According to estimates, the redevelopment of DUS has generated $3.8 billion in total economic impact in the near term, and another $2.9 billion over the long term—game-changing amounts for a city, a region, and a state. Meanwhile, according to the Denver Union Station Economic Impact Analysis, the DUS redevelopment was responsible for creating 31,000 construction jobs and will continue to support an additional 18,500 jobs. Denver and the region are forever changed by this multimodal transportation center, and ridership is expected to hit 200,000 passenger trips per day in 2030.
The project provides proof that with skillful planning, expert management, collaborative spirit, and vision, a massive urban redevelopment can be completed on time and on budget (even amid the upheaval of a deep recession), with an outcome that meets or exceeds the public’s expectations. As further evidence of its success, Denver Union Station was a ULI Global Awards for Excellence winner in 2015.
|Core area site is purchased by Regional Transportation District||2001|
|Master plan is approved||2004|
|Master developer selection process began||2005|
|Developer is selected||November 2006|
|Denver Union Station Project Authority is created||2008|
|Design/build contract is executed||2009|
|Federal Transit Agency construction loans are arranged||2010|
|Phase I opened||2011|
|Amtrak moves into Union Station Terminal||February 2014|
|North and South Wing buildings open||April 2014|
|Union Station Terminal opens||July 2014|
|Land uses||Initial phases (through 2015)||Future phases||Total|
|Hotel||100 rooms||450 rooms||550 rooms|
|Union Station core area parcels||19.5 acres|
|Surrounding parcels||40+ acres|
|Union Station core area financing sources and development costs|
|Union Station Neighborhood Company equity||$38 million|
|Various partner equity and grant sources||$149 million|
|Transportation Infrastructure Finance and Innovation Act (TIFIA) loan||$145 million|
|Railroad Rehabilitation and Improvement Finance (RRIF) loan||$155 million|
|Total estimated development costs||$487 million|
|Regional Transportation District loan||$165 million|
|Taxes on 40+ surrounding acres||NA|
|City and County of Denver moral obligation backstop||$8 million|
1701 Wynkoop Street
Denver, CO 80202
Union Station Neighborhood Company (USNC), a joint venture of:
- East West Partners
- Continuum Partners
Public sector development entities
Denver Regional Transportation District (RTD)
City and County of Denver (CCD)
Colorado Department of Transportation (CDOT)
Denver Regional Council of Governments (DRCOG)
Denver Union Station Project Authority (DUSPA)
Owner’s representative (for all of the above public entities)
Trammell Crow Company
Historic Union Station Terminal developer
Union Station Alliance
Master plan and transit architect
Skidmore, Owings & Merrill
Transportation infrastructure engineer
Landscape architect and lead public realm designer
Architects—Historic Terminal building
JG Johnson Architects
Transportation/public infrastructure contractor
Patrick L. Phillips
Global Chief Executive Officer
Kathleen B. Carey
President and CEO, ULI Foundation
Senior Vice President
Case Studies and Publications
Case Studies and Publications
James A. Mulligan
David James Rose
ULI Global Awards for Excellence 2015 Winner
Note: This case study draws extensively on information and text—developed by VOCA Public Relations on behalf of the Union Station Neighborhood Company—that was part of the Denver Union Station 2015 submission to the ULI Global Awards for Excellence program.