The Equipment, Operators For Pre-Pandemic Passenger Load
by Glen Richardson
It has been a ridership roller coaster for RTD buses and trains since the pandemic hit in March, and the roads and tracks ahead look bleak. The ritual of standing shoulder-to-shoulder with strangers during rush hour is history, eradicated by the coronavirus.
Triple Threat: RTD needs to triple the number of trains and buses it has in order to serve the same number of passengers the agency had prior to the pandemic.
While the agency grapples with a path forward, it also faces plummeting ridership and tax revenue. Even if RTD’s financial projections — originally forecast as a $1.1 billion revenue loss through 2026 — drops to just 9% vs. the originally predicted 24% — the road ahead remains treacherous and volatile.
Social distancing rules will not only impede but essentially preclude a rebound. Why? To operate what was a pre-pandemic commuter load back in January, now requires three times the equipment and operators because of the cap on number of passengers. Bottom Line: The agency will likely not be able to restore service to its pre-pandemic levels — or anything close to it.
Huge Debt Burden
RTD was in a delicate financial spot even before the coronavirus. By adding five new train lines since 2012 — a fifth is expected to open in Sept. — the agency is drowning in debt. RTD is due to pay $252 million in debt and interest this year alone. That’s why the agency had made a $40 million cut in its 2020 budget. Even if RTD loses significantly less than the quarter-billion dollars originally projected for 2020, the budget is still a full blown problem.
RTD’s FasTrack program has never met the yearly forecasts following voter approval of the package in 2004. The recession that followed made the difference between forecasted and actual revenue even larger. Thus, RTD took out loans to build many of the train lines it promised voters in 2004.
That’s why now it’s saddled with massive debt payments. RTD now estimates that more than 90% of the $194 million in FasTracks sales tax revenue it expects to collect in 2021 will go to debt service.
Cost Cutting
Crowded Cars Eradicated: Standing shoulder-to-shoulder with strangers has been eradicated by the coronavirus. As a result RTD now needs three times the equipment and operators for a pre-pandemic passenger load.
“We have an incredible system right now but it came as an expense,” admits Heather McKillop, RTD’s financial officer. “It comes as a long-term expense that has to be paid off.”
In addition to the lower-than-expected sales tax revenue, staff must also deal with higher-than-expected operations and maintenance costs for its new train lines plus an aging system that needs repair.
The agency is now cutting cost by delaying projects and freezing administrative hiring. RTD is also reportedly considering furlough days for all workers. Collective bargaining agreements with drivers, however, don’t allow for furloughs and likely won’t apply to them. Given the recent hiring and retention problems with drivers, that is probably a good thing.
Altering Schedules
Among the possible solutions is altering schedules to avoid crowded trains while increasing frequency throughout the day rather than being concentrated at rush hour. That assumes, of course employers are willing to stagger work hours to ease crowding in public transportation. Even so, the agency must demonstrate that the system is clean, safe and that social distancing is mandated.
Aging Buses: As coronavirus costs soar, RTD must also maintain an aging bus line that needs repair. In addition, operation and maintenance costs for new train lines is higher than expected.
As with so many other businesses, the scary part for RTD is the potential duration of the crisis — it isn’t going away anytime soon.
RTD resumed fare collection and front-door boarding on all buses July 1 and passengers are required to wear face covering. Nevertheless they’re only buying time with the virus, they’re not removing it from the equation. The agency must also face the fact many previous riders may continue to work remotely — even if only some of the time — when the coronavirus ends.
Reimagining RTD
“The world has changed, we recognize that and we are reimagining RTD to support this new normal and these new challenges,” says Bill Van Meter, assistant general manager of planning.
Much of RTD’s budget gap for 2020 will be funded by a large grant from the Coronavirus Aid, Relief & Economic Security Act (CARES). RTD leadership admits, however, that they cannot count on a second round of funding.
The agency is continuing to reduce costs and streamline to close the large financial gap. Cuts made to the 2020 budget under the worst-case scenario may result in a surplus by the end of the year, which would be carried forward to the 2021 budget. That would help offset projected losses of sales and use tax revenue, decreased fare collection and the unlikely allocation of additional CARES Act funding.
Riding Healthy
Healthy Ride: Beyond social distancing, electrostatic cleaning of cars is an added burden for agency saddled with huge debt, higher-than-expected operations and maintenance costs for its new train lines plus an aging system that needs repair.
Denver and state health officials say social distancing — at least six feet from other passengers — must be maintained. RTD claims it is adding additional vehicles on busy routes to help maintain the required space between passengers.
RTD is also requiring face covering among both passengers and operators. Staying quiet, as conversation — especially yelling or singing — amplify the spread of the virus. “A quiet car is a safer car,” they say.
Finally, health officials urge passengers to use hand sanitizers or wipes after riding buses and trains.
Largest, Most Costly Riots In History Devastate Denver; City Has $226 Million Budget Gap, Up $46 Million In A Month
by Glen Richardson
Already reeling from three months of city-state coronavirus shutdown orders, more than a week of protests and riots against racism and police brutality have left Denver devastated. Clashing with police, rioters looted and caused nightly property damage to businesses just as they were beginning to reopen.
Riots Devastate Denver: More than a week of nightly protests and riots against racism and police brutality have devastated Denver. The riots are the largest and most costly in Denver’s history. Photo: Hart Van Denburg, CPR News
In size, scope and scale, the riots are the largest and most costly in Denver’s history. Protests were longer and more destructive than any previous race riot dating back to the1880 Chinese Halloween riot on Wazee St. Neither the Holy Week protest following MLK’s Assassination or the Chicano Crusade for Justice were of the same magnitude or duration.
The Mile High City’s worst previous riot happened when the Denver Broncos won their first Super Bowl in January 1998. Thousands of fans went on a rampage overturning cars, looting and vandalizing city buildings. Smaller scale disturbances have followed other Broncos championships plus when the Avalanche won their first Stanley Cup in 1996 and again in 2001.
Capitol Carnage
Near the Capitol on Colfax Ave., down the 16th St. Mall and along South Broadway, businesses were boarded-up nightly on block after block. Many had done so as a safety precaution, but others covered damage or the properties had been vandalized. Corporate and privately owned establishments large and small worried about insurance coverage as their bank accounts, hopes and dreams drained. Since businesses were just reopening following the pandemic, employers are considering whether to postpone or return workers to downtown job sites.
Battered by days of protests, nine state buildings, including the State Capitol and adjacent monuments, were damaged or defaced. It included every set of stairs to the Capitol building, every sign, plus lights that line the walkway. Many trees plus the building’s parking lots were also damaged. Some second floor windows were smashed by rocks, including windows at the offices of Gov. Jared Polis and his chief of staff. Windows on the truck of Senate President Leroy Garcia parked outside the Capitol building were also shattered. Restoring-replacing marble, granite, brass and glass doesn’t come cheap. The state is self-insured for up to about half a million dollars.
Rent Roulette: June was the second straight month Denver rents decreased. City may face a serious decline as huge complexes such as the Deco Apartments on Colorado Blvd. open.
Downtown rioters claiming to seek justice, ironically vandalized a monument honoring victims of injustice. Known as the Khachkar Memorial to the Armenian Genocide, it commemorates the victims of all crimes against humanity, including racism and slavery. Initial assessment of riots by the Downtown Denver Partnership suggest that slightly more than half of the damaged properties were along the 16th Street Mall.
Budget Gap Grapple
Overtime costs for large groups of police plus the Colorado National Guard on the ground during the riots will add millions of dollars to the city’s growing budget deficit. Denver is now facing a $226 million projected budget gap for 2020, up $46 million from what the city projected just a month ago (Chronicle June).
Marathon March: More than 3,000 Denver Public Schools students and alumni trooped down Colfax Ave. on May 7, the 11th consecutive day of protests in Denver.
As riots stoked Denver’s financial slide, the city is reaching out to its landlords seeking rent relief. It is a tenant in 15 leases, including the Denver Post Building. Denver recently agreed to a $10 million sublease for an additional 92,000-sq.-ft. on the Post’s ninth floor. That’s in addition to space leased on floors one, seven and eight, where the city will spend about $32 million over the course of those leases.
City departments working in the Post building include Parks & Recreation, Public Health & Environment, and the Office of Emergency Management. On May 4 the City Council unanimously approved a measure proposing to defer rent for three months in exchange for extending each lease term by three months.
Rent Heebie-Jeebies
With the city’s massive apartment buildup and more units expected to open in the coming months, officials are nervously watching how Denver’s rent trends will impact the city’s outlook. Denver rents declined 0.4% in June, and are down slightly compared to the same time last year.
Human Hurricanes: Downtown was boarded up as human hurricanes raged nightly for more than a week. Some covered damage or vandalism, others were a safety precaution.ٌ
Currently, median rents in Denver stand at $1,067 for a one-bedroom and $1,351 for a two-bedroom apartment. June was the second straight month that the city has seen rents decrease after an increase in March as the pandemic hit.
Denver’s year-over-year rent growth lags the state average of 0.3%, as well as the national average of 0.8%. The dips are occurring at a time when rent growth normally picks up steam seasonally. If the trend continues it could lead to tighter competition for rental units at the middle and lower ends of the market, while luxury vacancies get harder to fill.
Cost Cutting
To battle the double-barreled economic hit, city officials say they plan to mitigate through furloughs, spending cuts, hiring slowdowns and investment prioritization. Furloughs are mandatory days off without pay. City employees must now take eight furlough days — five scheduled and three flexible — in 2020, which Mayor Hancock believes will add about $16 million back to the city’s general fund.
Of the approximate 12,000 city employees, all nonuniform employees will be required to take the furloughs. Uniformed employees, who are under collective bargaining agreements, are not required to take them — nor are elected officials,
Mayor Hancock says, however, that Denver is expediting city construction projects which he claims will, “Keep the whole ecosystem of the economy moving.”
Remodel Rein-In
Nevertheless, the Mayor has put a crucial portion of Denver’s massive National Western Center campus remodel on hold. The city’s ramshackle National Western Complex — home of the National Western Stock Show & Rodeo — is supposed to be made over into a hub where food and agricultural science meet arts and entertainment.
Hold Your Horses: As city’s financial woes worsen a key portion of the National Western makeover has been put on hold. Known as the Triangle, a 10,000-seat arena would replace the Denver Coliseum to host the stock show and concerts.
A combination of voter-approved tourism taxes and private investors are meant to pay for the project wedged between I-70 and the Platte River in Elyria-Swansea.
On hold is a key portion of the campus, known as “the Triangle” (named for its shape), with a 10,000-seat arena to replace the Denver Coliseum and host the stock show, concerts, and other events. A new exposition hall and the restoration of a 110-year-old building, which may be converted into a market, are also paused. The Triangle portion of the $1 billion National Western project is estimated at $528 million.
In a stunning civil lawsuit filed in United States District Court in Denver the powerful and highly politically connected Andrew S. Armatas is accused of sexual assault by a former judicial assistant. Armatas was originally appointed to the bench in 1990 by Mayor Federico Peña and was made the chief presiding judge in 1995 by Mayor Wellington Webb. He retired as chief presiding judge in 2013 but thereafter filled in when other judges were absent.
Judge Touchy Feely: Andrew S. Armatas (photo from 2000) who was the chief presiding judge for Denver County Courts for over a decade and a half has been accused of sexual assault in a blockbuster lawsuit filed in Federal District Court, at left. Armatas is a current member of the five person Denver Ethics Board.
Armatas is an active member of the five member Denver’s Ethics Commission having been appointed in 2013 by Mayor Michael Hancock who has faced various allegations of sexual misconduct himself while in office.
The Lawsuit
The Complaint in the case captioned Rebecca Norris v. City and County of Denver Case No. 20 CV 1226 was filed on May 1, 2020, and lays out a litany of alleged misdeeds by the judge regarding various women at the courthouse one of whom indicated that Armatas was known as Judge “Touchy Feely.”
The lawsuit alleges job discrimination and retaliation under federal and state law with Ms. Norris being fired in January 2019. She was hired in 2007 as a judicial assistant in Denver County Court and received Employee of the Year Award twice. She asserts she was fired in retaliation for her accusations against Judge Armatas, accusations she says the City ignored for more than two years.
According to the lawsuit, Norris claims she first complained about Judge Armatas in the summer of 2016. The lawsuit says she was working in an empty courtroom when Judge Armatas walked in and sat “uncomfortably close” to her. It also says Judge Armatas said to her, “You look like you like to get dirty. You look like you could get wild.” The Complaint declares “Judge Armatas then immediately made unwelcomed physical advances toward (Norris), kissing her and touching her breasts prompting her to scream at him to get away from her and demanding that he leave, whereupon Judge Armatas quickly left the courtroom.” The lawsuit says Norris informed her immediate supervisor that same day what had happened.
The Termination Letter
While efforts to reach Judge Armatas by the Chronicle have not been successful, his side of the story is at least partially laid out in the City’s Termination Letter to Ms. Norris of which the Chronicle has obtained a copy. The termination letter states Norris’ supervisor denies being told anything. It says Norris told inconsistent stories about what happened with the Judge and changed the date of the alleged incident after she learned the Judge was out of state that day. The termination letter says, “The evidence is clear that you made false allegations of a very serious nature against a judge in order to avoid discipline. The accusation that you told your supervisor immediately after the assault occurred and she did nothing in response is untrue and disturbing. You have betrayed the trust of the County Court with your dishonesty and false reporting.”
The Termination Letter asserts that Norris only brought up the allegations after she was under investigation for inappropriate comments to a co-worker. The Complaint, however, asserts that Judge Barry Schwartz confirmed that Norris advised him of the alleged assault before the disciplinary investigation. In the Com-plaint there are various other individuals identified who Norris told about the alleged assault on or about time the alleged assault occurred.
Norris’ attorney Kenneth Padilla responded that “This is a classic example of victim blaming. My client reported the sexual assault to her supervisor by phone immediately and her supervisor told her to take the day off. Furthermore, it was not documented by the city whatsoever. So reconstructing it three years later is very difficult. . . . Telling them they don’t have the right date, or you don’t remember everything. This happens frequently in sexual assault cases, they try to victimize the victim.”
Denver Ethics Board
In a bit of irony Judge Armatas was appointed to the Denver Ethics Board in 2013 by Denver Mayor Michael Hancock with his most recent term ending in 2021. Hancock was accused of sexually harassing a female police officer assigned to his security detail and the City paid a significant settlement in the case, but Hancock managed to avoid any discipline. Cases of sexual harassment are handled by the Office of Human Resources who developed a new sexual harassment training program for other city officials but cleared Hancock of any wrongdoing. It has been asserted that in the City and County of Denver there is one set of rules for the powerful like Mayor Hancock and former Chief Presiding Judge Armatas and another for everyday employees.
Birds Of A Feather: Denver Mayor Michael Hancock who has been accused of sexually harassing a female member of his police detail as well as being a john for a prostitution house in Denver, appointed Judge Armatas to the Denver Ethics Board in 2013 and reappointed him in 2017.
Bankruptcy
The Norris Complaint is not the first brush with notoriety for Judge Armatas. In March 1995 just two months after being raised to Chief Presiding Judge for Denver’s County Courts by former Mayor Wellington Webb he filed for federal bankruptcy under Chapter 7. He listed a mere $16,094 in assets, with and extraordinary $2,659,035 in liabilities. Patty Calhoun in her article in Westword (April 5, 1995) stated that Armatas’ explanation of the 1980s downturn in the real estate market leaves “a real odor in the court.”
The article notes that “when Mayor Wellington Webb asked Armatas to become the presiding judge, Armatas had to know that his bankruptcy filing was imminent. Rather than show judgment, though, he accepted the appointment.” The article goes on to note of the sealing of the divorce records of Armatas and federal tax liens filed against him
Allegations By Other Women
The federal Complaint by Norris set forth a myriad of other allegations by women working in the Denver County system which will be extremely embarrassing for Judge Armatas if allowed in the court proceedings. In July of 2018 Norris retained the services of Employment Matters, an outside consulting firm to help investigate her allegations and that of others. The Complaint states (underlines added):
“Nicole Coburn . . . who was employed by the [the City] as a courtroom clerk stated that Judge Armatas asked her out for drinks several times . . . that he asked for her phone number and that she gave it to him, thinking it was just to talk about work, but ‘then it got weird’; that he texted her on different occasions; that he asked her to meet him for drinks on weekends and after work; that she thought his behavior was creepy because he kept coming to her work area asking to go out with him and because ‘he’s so old.’ Judge Armatas was in his seventies and Ms. [Coburn] is in her thirties.”
“Stacie Beckwith, the Finance Manager for the Denver County Court, informed the Clerk and chief administrative officer of the Denver Count [sic] Court, Terrie Langham, that Judge Armatas had asked her out for coffee; that when she met him Judge Armatas asked her whether she had informed her husband about their meeting, that when she told Armatas that she told her husband everything, Judge Armatas responded that he didn’t tell his wife, touching her hand as she was holding her coffee cup in a way that she felt to be flirtatious and highly inappropriate . . . .”
“Connie Strehler, another Denver County clerk, stated that she worked in the adjoining courtroom that shared space for the courtroom clerks where Judge Armatas worked and that therefore, she had frequent contact with Judge Armatas. Also she said that after Judge Armatas retired, he filled in for her judge; that Judge Armatas always liked to hug female employees of the Denver County Court; that she did not appreciate Judge Armatas hugging her; . . . that Judge Armatas was known as Judge “Touchy Feely”; that Judge Armatas liked to hug a lot and that he hugged ‘the ladies.’ Not just her; and that on one occasion Judge Armatas caressed her hand, rubbing his hand on top of her hand, in a way she did not appreciate.”
The City has yet to file an Answer but a Scheduling and Planning Conference by phone has been set for August 12, 2020. The case has been assigned to recently appointed Federal District Court Judge Daniel D. Domenico.
“Fear is the mind-killer. Fear is the little-death that brings total obliteration.” — Frank Herbert
by Luke Schmaltz
In the midst of every crisis, there are those who rise to the occasion to meet the inherent challenges head-on. Today, such steadfast determination can be seen in the actions of frontline healthcare workers persevering through unprecedented circumstances.
Meanwhile, amid untold stress and confusion, there are scavenger-minded shysters who slink to the sidelines to wait for a distressed populace to reveal a new set of weaknesses upon which to prey.
A Climate Of Chaos
Fake Coronavirus test kits are being marketed to desperate consumers.
Currently, many people are preoccupied with the latest socially engineered concerns sparked by the Covid-19 pandemic. These include the health risks of becoming sick, how to prevent infection, what to do if you get sick and of course — the crippling panic that comes with the so-called impending collapse of the financial system. What makes these issues so dangerous is the deluge of misinformation and disinformation constantly spewed forth from just about every active media outlet. The ideological divide has somehow made politically motivated pundits the mouthpiece of what is largely a healthcare issue. The result is mass confusion, and the overarching revelation that the people “in charge” are incapable of agreeing on a clearly-defined set of fact-driven protocols.
The Trap Is Set
The ever-present “snake oil” has found a new online, electronic marketplace.
These circumstances have inspired a windfall of new frauds, swindles and rackets that are currently descending upon the unwitting and the confused like a swarm of electronic locusts. This pestilence is largely presenting itself through electronic channels — permeating the average victim’s technological bubble in the form of fraud-based phone calls, text messages, emails, social media posts and websites claiming to offer immediate solutions to abnormally urgent problems. Anxiety is winning over rationale, prompting desperate people to engage with offers and propositions that may seem too good to be true — because they are.
Bogus Services
People on Medicare or Medicaid, those with diabetes and individuals over 60 are particularly vulnerable to being targeted by scammers offering fake Covid-19 tests. The Colorado Department of Regulatory Agencies reports that online advertisements and telephone solicitations are offering free testing — all the consumer has to do is provide personal information and health insurance details. Once divulged, the “vendor” disappears, and the scammers use the data provided to engineer identity theft and gain access to personal finances. Other predatory initiatives involve people contacting those in the above categories offering to help them with grocery shopping, retrieving prescriptions and other important errands with the stipulation that they provide their credit card information up front. The money disappears and the service is never rendered.
Bad Medicine
The IRS will only contact you by USPS mail.
Social media channels, email accounts and cell phone text messaging applications are being hijacked to deliver offers claiming to treat and cure the Coronavirus. Legitimate medical research professionals the world over have concluded that there is no definitive, 100% reliable cure and that no vaccine yet exists. Although there are treatments that have shown some promise and researchers are working to develop a way to inoculate against the virus — these efforts are still awaiting definitive results. In spite of the facts, scammers claiming to have the magic bullet that will execute fears of falling ill are bilking the easily-duped out of their money. These schemes feature snake oil in the form of tinctures, teas, essential oils, colloidal silver and other flim flam potions that will cure you of the disease and bolster your immune system.
Stimulus Check Liaisons
Many scams are targeting older folks and young people alike.
Young people and older folks alike — especially those who have been laid off from work or lost their jobs — are awaiting their share of the multi-trillion-dollar stimulus package which was recently passed by Congress. Scammers claiming to work for the IRS are contacting people via phone call, text message and email. They are offering to investigate the status of an individual’s stimulus check and to help usher the process along so the person can access the money sooner. Those who fall for the ruse are prompted to divulge their Social Security number and bank account information among other personal data which allows the scammers to steal their identities and what little money they may have in a savings account or other monetary fund.
It is very important to note that, according to www.irs.gov, “The IRS initiates most contacts through regular mail delivered by the United States Postal Service … the IRS will call or come to a home or business when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment …” Since stimulus checks are not a tax issue, no contact by the IRS other than through the mail should ever be expected. Also, these phishing scams are prevalent across social media, and merely clicking on them from a hardwired desktop computer can allow unauthorized access to your network, your passwords and ultimately to your money.
The pandemic has hatched a new batch of scams and fraudulent schemes.
What You Can Do
You can guard your personal information with hypervigilance and if you choose to engage with a company for any services, use caution and do some research to make sure they are legitimate. Better yet, you can choose to trust only those you know such as coworkers, relatives and neighbors when it comes to asking for help with day-to-day tasks. Meanwhile, you can also stay updated on newly-emerging scams by visiting www.StopFraudColorado.gov and help others by reporting any scams you encounter to the above department’s hotline at 1-800-222-4444 and to the Denver District Attorney Consumer Fraud Hotline at 720-913-9179. In short, there are currently no at-home tests and when there is a definite cure and a proven vaccine, they will be unavoidable headline news items and not secret elixirs from the online flim flam man. Plus, anyone you don’t know who is offering to assist you, is most likely aiming to do so by only helping you part with your money.
Tax Revenue To Drop $180 Million, Double ’09 Recession; Joblon Fears Cherry Creek’s BMC Eatery Ventures May Not Survive
by Glen Richardson
Construction that’s been a-boomin’ in Denver-Cherry Creek since 2013, fueled by a strong job market and a booming tech industry, is about to go bust. That’s the conclusion of an online panel discussion dissecting the coronavirus pandemic’s impact on the metro economy.
From Boom To Bust: This DenverInfill photo of Block 162 in the heart of Denver’s Central Business District symbolizes city’s building boom. Projects such as this one on 15th St. between California and Welton are expected to be completed.
Hosted by BusinessDen — the Mile High City’s online homepage — a foursome of developers speaking at Assembly III made it clear that we’ve just seen a very abrupt end to the boom cycle.
Furthermore, the panel isn’t expecting a quick turnaround of the boom that stretched the boundaries of downtown and put a record number of cranes in the air. BMC Investments’ Matt Joblon, who has invested heavily in Cherry Creek, was blunt about what’s ahead: “I think we’re going pretty deep into a recession and I think it’s going to be drawn out, unfortunately,” Joblon cautioned. His reasoning: “You can’t put a global economy into a coma for two months and just turn it back on and expect things to go back to normal,” he asserted. “If you’re expecting that, you’re going to get punched in the face, really hard.”
Projects currently being built will obviously get finished, according to the panel, but after that it’s from full throttle to sudden stop. “When I can go out and buy a distressed asset at half the price I can build it new, it doesn’t take a genius to figure out what’s going to happen,” Rhys Duggan, president-CEO of Revesco Properties, explicitly explained.
City Crunch
The nationwide financial crisis created by the pandemic and policymakers is doubly grim for Denver. In terms of vulnerability, the City is ranked the nation’s third worst, just behind Detroit. Denver is one of the cities that relies heavily on sales taxes, meaning the closure of restaurants and retail outlets will create an immediate reduction in city revenue. The city’s financial staff expects city tax collections to shrink by an estimated $180 million. The shortfall equates to a 12% drop in tax revenue — roughly double the hit caused by the 2009 recession.
Apartments Anxious: Broe’s Country Club Towers is symbolic of Denver’s apartment buildup. One of the country’s top three apartment builders, Denver could face a disaster as recession historically hits apartments hard.
The fact is Denver’s stay-at-home mandate has cramped consumer spending, crippled restaurants and shops, canceled the city’s tourism industry, and essentially vacated DIA. As a result, tax collections from local and online retail stores, restaurants, bars, marijuana dispensaries, hotel stays, car rentals and jet fuel taxes are quickly drying up.
Another big worry is the city’s massive buildup of new apartments. Denver has been among the top three apartment builders in the country, adding more than 15,000 new units per year. History has shown that recessions hit apartments hard. People stop filling units immediately. Vacancy spikes and rent falls. This could be a disaster scenario for Denver since developers were continuing to add tens of thousands of units as 2020 was getting underway.
A New Ballgame
Finishing Up In Creek: Construction is being completed at the former Inn At Cherry Creek by developer Matt Joblon. He predicts the Clayton St. hotel-social club will be the last hotel or other new project to be built in the district anytime soon.
A survey conducted by the Colorado Restaurant Assn. indicated that if eateries weren’t able to open until mid-May, 11% would close permanently. If not opened until the end of May, upwards of 20% might close permanently. Joblon is even less optimistic, predicting that 30% of restaurateurs and retailers will not open again. “That’s going to create massive retail vacancy and unemployment right there,” he told the panel. Joblon adds that as things start to open again, Cherry Creek’s high-end restaurants — including those BMC has invested in — might not be able to survive.
The Valley’s hotel industry is expected to fare even worse. Currently building a new hotel in RiNo that’s scheduled for opening next spring, panel member Andrew Feinstein — managing partner of Exdo Properties — had this to say about the hotel outlook: “The good news is we are on time, and the bad news is that we are on time,” he declared. “It’s going to be a whole new ballgame delivering a hotel with a restaurant and bar in May 2021, but I’m glad it’s May of 2021 and not May of 2020.”
Later Is Better: Panelist Andrew Feinstein of Exdo Properties is glad this new hotel on Walnut St. won’t open until May of 2021. Exdo is developing the yet to be named Sage Hospitality Hotel along with Walnut Development partners.
Joblon’s BMC Investments is currently building a hotel and social club on Clayton St. in Cherry Creek, but isn’t expecting additional hotels or other new projects to be built in the district. Thus plans for a hotel at the shuttered Bombay Clay Oven site on Cherry Creek’s Steele St. is unlikely. A pair of developers paid $2 million for the site but a San Francisco firm set to lease the project pulled construction plans when the pandemic hit.
Also in question is the redevelopment of the east side of Clayton St. across from Joblon’s hotel. Broe Real Estate planned to begin a makeover of the eastside of the street this spring. Transformation plans included demolishing two existing structures and replacing them with an eight-story building. Another seven-story building was to be built at an existing parking garage site.
Hotels Hemorrhaging
Virus Closes Palace: Denver’s legendary-ritzy Brown Palace hotel that opened in 1892 hadn’t closed until hit by the pandemic. Most hotels have been forced to close including downtown’s Four Seasons and Grand Hyatt.
Denver’s hotel and hospitality sector has been among the Valley’s hardest hit by the pandemics. Owners and investors are reeling, as occupancy dropped to zero and most shut down. Closures included the legendary-ritzy Brown Palace that opened in 1892, and hadn’t closed until now. The city-state’s largest hotel, the Gaylord Rockies Resort also closed, its $80 million, 317-room expansion postponed to stave off money losses. Downtown’s Four Seasons and Grand Hyatt also closed as did the JW Marriott and Halcyon in Cherry Creek. Occupancy isn’t likely to come back until at least the fourth quarter of 2020.
The metro Denver market contains 44,437 rooms across 318 hotels. Another 1,263 keys were delivered during the last 12 months, the largest increase in hotel rooms in Denver’s history. Hoteliers must now grapple with finding a GPS to get them back on the road safely as they begin to accelerate. Unlike in previous years, high speeds could spell disaster unless they make smooth, sensible decisions.
The road ahead will also be challenging for city-state car dealers as Colorado’s first quarter car registrations through March 2020 declined 22.1%. Moreover, Colorado Automobile Dealers Assn. President Tim Jackson is predicting up to a 60% decline, or more, over the next couple of quarters as the impact of the virus impacts travel and the economy.
“We are kept keen on the grindstone of pain and necessity.” — H.G. Wells, The Time Machine
by Luke Schmaltz
The recent government-mandated closure of non-essential businesses derailed the economy like an F-5 tornado blindsiding a freight train, a manmade construct forced to bend to the unflinching will of nature.
The current fiscal catastrophe is — as some economists are predicting — the harbinger of an impending recession or perhaps even worse. Regardless, some Denver businesses owners and entrepreneurs are determined to adapt to these incredible circumstances and find a way to survive.
Wings To Go: Amidst the Covid-19 pandemic, the takeout-only model has proven to be viable for businesses such as Fire on the Mountain in Wash Park and Sloans Lake.
Many national brands across various industries are thriving like never before. Some include Zoom (video conferencing platform), Tushy (portable bidet maker), Drizly (delivery of adult beverages), Cleancult (organic cleaning products), GrubHub (restaurant delivery) and many more. Similarly, many local businesses are shifting direction to keep their sails unfurled amid chaotic tradewinds. While some have reconfigured operations, others have simply been in the right place at the right time.
It’s no secret that businesses such as grocery stores, liquor stores, marijuana dispensaries and gun vendors have multiplied their sales exponentially over the past month. Less surprising, however, are dine-in restaurants doing takeout only, custom clothiers, local breweries and bicycle repair shops who have found new revenue streams.
Ramping Up Takeout
The dine-in aspect of food service is widely employed because table service facilitates higher ticket averages than to-go orders. Yet, the takeout-only model has proven to be viable for fast food brands and independent restaurateurs alike. While most establishments without a takeout dimension to their business model are shuttered, a few holdouts have managed to pare down operations, shift focus and continue serving a populace that shows no sign of losing its taste for professionally-prepared cuisine.
While the upheaval is nothing short of devastating for most, Fire on the Mountain has managed to harness the inertia of a disaster for life-saving revenues. Manager Craig “Cheech” Oberlink explains how FOTM’s current solvency is based on a deep-rooted connection to the community, “The neighborhoods we are in are super-supportive and family-centric.” Both FOTM Denver establishments are leveraging their “ready to go-centric” offerings for takeout-only service. Rather than dilute their revenues by accessing GrubHub or UberEats, they have opted to keep the revenue stream in-house. Staff members are the delivery drivers, bringing hot wings and brand favorite Vegan Mac-and-Cheese-Balls to loyal customers. As Highlands employee Aaron Howell puts it, “I feel that I am doing important work by feeding people and they [FOTM] create a culture that facilitates that.”
Fire on the Mountain treats people well and fosters loyal employees and patrons.
Although FOTM has had to pare down, those left with jobs such as Howell are grateful. “They have done so much for me that I am willing to lean into this crisis, help out
however I can. I feel the same way about them as I feel about my own family. Everyone has to pick up an oar and row the boat.” Meanwhile Oberlink — an industry veteran — remains cautiously optimistic, “It feels good to keep people employed and to see the neighborhood support the restaurant. A lot of places can’t stay open so we feel super lucky.” Sales are not what they were a month ago, yet FOTM seems to have struck an affable nerve within the community. Oberlink recounts a recent morning, “I showed up to work and there was a big heart cut out of cardboard taped to our door that said ‘Stay Strong.’”
Good Neighbors
Esters Pub is grateful to serve a reciprocal community.
The notion of appreciative patrons is apparent, as Esters Neighborhood Pubs are feeling the crunch but not the cold shoulder. Owner Paul Sullivan explains, “The community and our neighborhood have been absolutely amazing in supporting us and continuing to call in orders. There’ve been so many touching moments from customers including dropping off face masks for our coworkers, randomly buying lunch for front line workers, multiple tips of over 100%, buying large gift cards just to support the restaurant and the list goes on. It has made me realize that Esters and this community is so much more than the dollars and cents of the situation. Even though this pandemic has been terrible for a lot of people, I am humbled and grateful for the amount of kindness I have been witnessing.”
Mask Production
Equilibrium Clothing has shifted focus to serve local heroes.
Heroes in the trenches of the fight against COVID-19 work in essential capacities — most importantly in hospitals. By March 19, signs were pointing to the grim reality that the pandemic had the potential to catch the frontline off guard. On March 19, Deb Henriksen — owner/operator of Equillibrium Clothing — contacted an associate working as an ER nurse at St. Joseph’s Hospital to gain an informed perspective. She quickly discovered that essential personal protective equipment (PPE) supplies were running dangerously low. Henriksen jumped into action and began making multiple-use masks from hemp and bamboo textiles she had on hand. The impetus was to deliver immediate support in a “sew-it-forward” gesture of community service bolstered by long-earned brand integrity. She furthered her efforts to support the Athena Mask Project — informed by her role as an online teacher at Rocky Mountain College of Art and Design (RMCAD). Online sales of Equillibrium Face Masks have since spiked, and she pledges to continue giving away one mask to those in need for each sold and to donate 10% of revenue to sustainable initiatives. Henriksen attests, “The sales keep my work essential and going, I am very grateful for that. I know there are many people out of work, and I cannot say the same thing.” She also adds, “ I have been deeply touched by the appreciation of what I am doing from those who receive masks. It brings great joy in a time of sadness to help out others.”
Mockery Brewing offers craft beer convenience with curbside pickup.
Closing The Gap
Just as a beer can opens and the drinker pulls it to their lips, so too do libations at large have to make their way to the intended recipients. Yet, bars are shut down —interrupting the supply chain from producer to consumer by cutting out the all-important, confluence of social drinking. Local breweries are facing plummeting sales to the tune of 80%, yet stalwarts like Mockery Brewing forge forth — offering curbside pickup of crowlers and bottles of their 14 selections of beers. This is a trying time that has brought out the best in some people. Owner/Brewer Zach Rabun explains, “We have seen some truly generous tipping from a handful of customers. This is a great boon to both our bartenders and
overall morale. We have also had a lot of our suppliers reach out to see how they can reorganize to best support our needs.” As the social dynamics shift, Rabun and his staff remain flexible in order to accommodate their customers. “We set up an online portal to allow people to make pre-orders before stopping by the brewery, as well as request deliveries. This has kept everything running very smoothly and prevented lines from forming, thereby avoiding any social distancing issues. Since the majority of our sales are coming in the form of crowler orders, we have been able to offer our full selection of beers.”
Upcycle
All bicycle repair shops such as Totem Cyclery and Base Camp Cyclery are operating on an appointment-only basis. Yet, the stay-at-home decree has prompted desktop dynamos and cubicle curmudgeons alike to turn themselves into overnight athletes. Local bike shops are reporting record numbers of requests for repairs and upgrades. In the midst of mass death — lazy people are, alas, trying to get healthy. Specialized boutique tune-up shops are becoming Hipster Jiffy lubes and Yuppie Grease monkeys. This shift reveals the urge within many who make that New Year’s resolution to get in shape and lose that unnecessary weight to actually do it.
Base Camp Cyclery helps people get rolling again.
Perhaps in the pursuit of treating ourselves better, we can learn how to treat one another with the same respect, dignity and grace. A major shift is at work. The pandemic is local. To live through it as a community, we must eat well, be kind, breathe pure, drink locally and ride with purpose.
