Editorial —
Denver Mayor Mike Johnston held an outdoor press conference by Union Station. He correctly noted that Denver, to be a successful vibrant city, must have a successful vibrant downtown, and for Colorado to succeed it needs a successful City and County of Denver. He also noted that Denver needs to break out of the area’s post-COVID “doom loop” that other cities like San Francisco are experiencing.
The trouble he has is that his solution of using an obscure special taxing authority — the Denver Downtown Development Authority (DDA) — to raise a half billion dollars to invest in downtown won’t work because of what the mayor will use the money for. The mayor is lying to you when he says he doesn’t know what the money will be used for. He indicates the “campaign will start with a conversation with downtown residents.” He has even set up a website, Denvergov.org/DDA, “where every Denverite can chime in with their hopes and dreams for what they want from the downtown.”
What a bunch of “malarkey” as President Biden would say. Luckily citizens have become a great deal wiser over the last few years that they cannot just count on what the government and politicians say is true. Rest assured every penny of that half billion “free money “ has already been spoken for.
The mayor will announce that what Denverites really want is for existing high rise office buildings to be retrofitted as personal residences. Of course, the mayor cannot be that brutally frank so it will be closer to what the mayor sheepishly said he maybe, sort of likes: “more childcare centers, commercial-to-residential conversions, and affordable housing.”
Yes of course, we need more childcare centers in the one place in Denver where there are almost no children. Downtown is inhabited by young two income couples with no children and older citizens whose children have left home so they decided to move to downtown Denver. The mayor also would like to have more “affordable housing” in the most expensive place to live in Denver. Really? No problem. He just declared 10% of the converted units must be “affordable” however he may define that term.
That leaves you with “commercial-to-residential conversions.” Anybody who has looked at such conversions states that they would be incredibly expensive and better to tear down the existing office towers and build new apartment houses and condominiums.
But you are failing to see who this is intended to benefit. Denver has a 30% vacancy rate and many properties have gone back to the regional banks that overly invested in office buildings and some properties owned by Real Estate Investment Trusts (REITS) that are in the same position. The banks have written off the loans and the REITS their investments. But they are both unwilling to expend any more money on the properties. That is where DDAs come in. They give free money to the property owners for the overly expensive conversions and now the properties will actually be worth something.
Even better, the Biden Administration knows it can’t let the regional banks go belly up so it has massive amounts of money in the form of federal grants for “commercial-to-residential” grants.
But if nothing is ever paid back who loses? Well, of course you do. The money that goes in the Tax Increment Financing is money that would otherwise go to the general fund of the city as well as to the Denver Public Schools. The schools just increase your mill levies as back fill and the city either cuts services sometime in the future or raises taxes sometime in the future but that is for your kids to worry about if they still want to live in Denver.
It is a great rob Peter (Denverites in the future) to pay today Paul (the banks and the REITS). Luckily no other media outlet in the Denver market other than the Chronicle will tell you this and the scheme will merrily be approved by the Denver City Council and the people voting in the future DDA. They have nothing to lose, only you, and you don’t get to vote on the matter. What a wonderful world.
— Editorial Board
