Developer seeks expedited termination of ground lease, property transfer for CityCenter redevelopment
Representatives from New Englewood LLC requested the Englewood City Council to expedite the termination of the city’s 50-year remaining ground lease on the former Weingarten property at CityCenter. Developers of the old Weingarten property at CityCenter in Englewood have asked Englewood City Council to terminate the city’s ground lease on the property, which currently has about 50 years remaining. During the March 3 study session, New Englewood LLC, which recently acquired the ground lease interest from LNR Partners, sought the city council’s guidance and approval to transfer the title of property east of Inca Street and north of Hampden Avenue to their entity, paving the way for the redevelopment of CityCenter. City council will have an executive session to discuss the proposal on March 10. A former Office Depot sits vacant across from Harbor Freight at 705 W. Hampden Ave. Both are part of the former Weingarten property at CityCenter. Developer New Englewood, LLC is asking the city council to terminate the property’s current ground lease. Photo by Elisabeth SlayDustin Jones, representing New Englewood, said the developer wants to see this property begin its redevelopment stage after being in limbo for so long because of an extensive planning phase. “We’ve got a long way to go but it’s clear there has been a significant amount of work over the past several years developing a well thought out plan,” Jones said. “We want to dust this process off and really take advantage of the work that’s been done using the great base that you guys have done.” New Englewood presented a loose concept for what the development of the property would look like, but didn’t have a definitive plan. At-large City Councilmember Tena Prange expressed some concerns regarding the development and questioned the company on how council members should address concerns from their constituents. “How do I answer constituents who might have some skepticism about handing over the ground lease to developers who essentially, (from) what I’m seeing in this proposal, is not willing to give us a clear vision into what the design is?” Prange said. “Our residents want to know what’s going to happen to the area, and I as a council member want to know that there is some assurance of a continuity of vision for use of this space within the city – which should be one of our more vibrant attractive places within the city.” Background of CityCenter property and leaseThe CityCenter property sits on the site of the former Cinderella City mall and has long been a focal point for redevelopment efforts in Englewood. City documents show that in 2000, the Englewood Environmental Foundation granted a 75-year ground lease to the Weingarten Miller Englewood Joint Venture for the central retail and mixed-use portions of the CityCenter site. In August 2018, the bondholders who had provided refinancing to Weingarten Realty foreclosed on the debt associated with the property.Since the foreclosure, city council has explored various options for the future of the property, with a goal of facilitating coordinated redevelopment for both the former Weingarten property and the surrounding city-owned land. The city took control of the ground lease and title in September 2023 following the dissolution of the Englewood Environmental Foundation, an ownership entity that was controlled by city staff. The proposal According to New Englewood representatives, the termination of the lease and transfer of title would allow the company to move forward with redevelopment planning, without the uncertainty and potential risk of investing significant time and resources into planning before securing full control of the property.In exchange for the termination of the lease and transfer of property ownership, New Englewood has proposed several conditions aimed at benefiting the city. These include granting the city ownership of the former 24-Hour Fitness building west of Inca Street that abuts the Englewood Civic Center and the surrounding plaza retail spaces. Additionally, New Englewood would offer the city a one-year option to purchase the Tokyo Joe’s multi-tenant building for $3.5 million.District 4 City Councilmember Steve Ward questioned why New Englewood was offering the city the option to purchase Tokyo Joe’s, rather than including it in the deal along with the 24-Hour Fitness building. New Englewood, LLC is offering the city control of the 24-Hour Fitness building if they decide to terminate the current ground lease, which has 50 years remaining. Photo by Elisabeth Slay Jones said there are a few reasons for this option. “I think the value that we think that we’re giving the city is in excess of the ground lease termination,” Jones said. “Today it’s worth something and we would offer a purchase option.”New Englewood feels that without approval from city council, New Englewood faces a challenge with moving forward with redevelopment planning under uncertain conditions, risking significant costs and delays.The options New Englewood’s request anticipates two agreements.The first is a narrow termination and title transfer agreement that would be drafted and submitted for council consideration as soon as possible. The second is a more detailed redevelopment agreement that would also be negotiated by New Englewood representatives and the city for later consideration by city council.If the council chooses to reject the request, New Englewood said it would continue operating the property as is, with the option to lease out vacant spaces. However, Jones said this decision could have long-term consequences, including prolonged redevelopment and limited tenant appeal. Though New Englewood has expressed reluctance to pursue this route, the company could still choose to wait for a combined lease termination and redevelopment agreement, which might provide a better financial return in the future.Additionally, with no immediate plans for redevelopment, New Englewood could attract lower-tier tenants, stalling revitalization efforts in the CityCenter core for up to 25 years due to long-term tenant leases and renewal options.If the council approves the lease termination, Jones said the city will benefit by gaining immediate value while encouraging redevelopment. If the city approves the lease termination and gains ownership of the former 24-Hour Fitness Center, Jones said the property could potentially serve as a new civic center or be repurposed for other uses, adding flexibility to the city’s future planning of CityCenter. The risksIf approved, city staff said the city would have limited control over how and when New Englewood will proceed with the redevelopment. However, to mitigate these concerns, New Englewood has agreed to a two-year prohibition on new leases that could interfere with redevelopment, ensuring that the site remains ready for redevelopment.Additionally, the city could leverage its partnerships with New Englewood, the Englewood Downtown Development Authority, and potential financing collaborations to ensure that redevelopment moves forward.The post Developer seeks expedited termination of ground lease, property transfer for CityCenter redevelopment appeared first on Colorado Community Media.
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