The University of Colorado Denver could soon move into new downtown digs after securing funding to buy the Independence Plaza office building for $29.7 million.
The 25-story building sits just across the street from Skyline Park at 1050 17th St., several blocks from the Auraria Campus, where most of CU Denver’s buildings are.
The University of Colorado Board of Regents approved the purchase of the building on Monday, and the local Downtown Development Authority on Wednesday OK'd up to $13 million to help. The deal is expected to close on Friday.
While CU hasn’t finalized its plans for the space, university leaders say the purchase will increase its footprint in downtown, create new space for academic offices and create revenue through leases. CU believes that third-party leases would cover the costs of operating the facility.
The purchase price is a fraction of its value in 2007, when the building’s current owner bought it for $144.5 million.
CU Denver now plans to invest tens of millions more into the tower, which could free up space for the Auraria Campus to expand or renovate, as well as help Denver improve its troubled office vacancy rates.
Independence Plaza is pretty independent of tenants, currently.
Independence Plaza is home to businesses like Wells Fargo and the data center developer CoreSite. It also has a sprawling underground parking complex, a bike corral, and a fitness center.
But mostly, the building is empty. Seventeen of its 25 floors are completely vacant, according to a presentation given to the University of Colorado Board of Regents. The first floor, which once housed a variety of food and beverage tenants, looks more like an empty mall than a bustling commerce center.
Of the building’s 19 tenants, eight have leases that are set to expire by the end of this year.
In total, the building is collecting about $3.1 million in annual rent.
Structurally, the building has seen better days. An engineering firm gave the building a 3.1 rating out of 5, noting that while it is operational and serviceable, it is showing signs of its age, especially in the electrical system.
CU plans to breathe new life into the building.
In the regent presentation, CU said the purchase gives the university an opportunity to “re-align space” that opens up options for the Auraria Campus to grow.
Currently, CU Denver shares some of its space with the two other institutions on the Auraria Campus — Metropolitan State University of Denver and the Community College of Denver. Officials said CU Denver could vacate those shared spaces, many of which have been identified for renovations or redevelopment.
By relocating academic departments and programs to Independence Plaza, students would get “better access to internships, career-embedded curricula, and partnerships.” The university would also seek to rent space in the tower to tenants who are “mission aligned and whose workforce needs align with CU Denver’s academic offerings.”
Meanwhile, CU Denver could change how it uses its on-campus buildings or allow Auraria to redevelop the shared spaces. Buildings like the Plaza Building and 5th Street Hub have been identified for redevelopment.
The purchase doesn’t impact CU Denver-specific spaces on the Auraria Campus, like its two dormitories, a student wellness center and classroom hubs, which will continue to operate in their current spaces. CU Denver also has other properties downtown, like its Lawrence Street Center, which houses several academic departments.
Taxpayers will help.
On Wednesday, the Denver Downtown Development Authority approved a proposal to partner with CU Denver to create an “innovation and entrepreneurship hub” at Independence Plaza.
The DDDA has earmarked $13 million for CU Denver’s Independence Plaza, to be released in two phases.
The first phase would be released immediately to CU Denver as a grant to help CU launch the hub.
The remaining funds don’t have a set release date. Per the agreement, DDDA would reserve $8.5 million to “support innovation hub business incentives,” create “improvements to activate 16th Street Plaza” and rebuild first-floor space for new food and beverage tenants.
The total cost to launch the entrepreneur hub is estimated to be up to $70 million.
Denver City Council now needs to approve the DDDA proposal. The DDDA is a city-affiliated body that collects property tax revenues in the downtown area.
