The McGregor Square entertainment, residential and office development last month opened its full complement of uses on one of the last developable plots of land in Denver’s lower downtown -- the area known for decades as LoDo and already beloved or reviled for its sometimes rowdy party scene, urbanist loft apartments and trendy offices.
The three-building, 650,000-square-foot development emphasizes the "mixed" in a mixed use property with retail, hotel and hospitality operations, condos and offices at 19th and Wazee streets – right across from Coors Field at 20th and Blake streets. The 13-story buildings wrap around a 28,000-square-foot public plaza topped with a giant LED screen.
The Coors Field connection runs deeper than just location. McGregor Square was built by the unlikeliest of developers: Colorado Rockies co-owner, CEO and Chairman Dick Monfort and a group of investors. When lenders asked for his previous development experience, Monfort quipped that he’d built a meat-packing plant in northern Colorado.
While Monfort can be a polarizing public figure as the Rockies struggle and some fans blame him for not spending enough on players, McGregor Square has the elements to be a successful and somewhat transformational development in LoDo, commercial real estate leaders and area retailers said. It also follows the trend of entertainment district development sprouting up around sporting arenas nationwide.
While those critical fans say Monfort has been distracted by the development, he counters that McGregor Square will actually help the Rockies.
“If the (stadium) district didn’t have money for capital improvements, the Rockies would have had to pay. That cuts into our ability to sign a Nolan (Arenado) or a Trevor (Story),” Monfort said in an interview with the Denver Gazette, citing two marquee players. “The development is beneficial for the future of the Rockies.”
Those who helped build and lease McGregor Square said Monfort’s development team was smaller than is typical for projects of that size, thus more nimble. They praised the emphasis on curating local retailers, working with Denver companies throughout the project and creating a family-friendly atmosphere.
“Dick Monfort is the best businessman I’ve ever dealt with, and we’ve dealt with the biggest of the best developers,” said Mary Beth Jenkins, president of The Laramie Company, a Denver commercial real estate consulting and brokerage firm. The firm handled the retail leasing.
Jenkins said opening any development of this size with 100% occupied retail space is rare.
“We wanted to understand the types of tenants that would complement the area, bring up the offerings of the project and not be a sea of sports bars,” Jenkins said.
Those retailers are: Tom’s Watch Bar, from Smashburger co-founder Tom Ryan; The Tattered Cover book store; Carmine’s Italian restaurant; a nine-vendor food hall called Milepost Zero and Flowers on the Vine.
“I feel like we put together the A team of recognizable names with great food,” Jenkins said. In addition to Ryan, restaurants at McGregor Square include Troy Guard who will open Tiny Giant Sushi station in the food hall and Charlie Troup, who runs the hall and will open an Atomic Chicken there.
McGregor Square is named for former Colorado Rockies President Keli McGregor, who died of a rare heart disease in 2010 at 48.
This second resurgence of the area -- the first came when Coors Field opened 26 years ago -- began with the refurbished Union Station opening in 2014, and continued with the 2017 opening of Dairy Block – right next to McGregor Square.
The land McGregor Square is built on is owned by the Denver Metropolitan Major League Baseball Stadium District. The District, and hence Denver taxpayers, own Coors Field. Monfort co-owns both the Colorado Rockies and the McGregor Square development (with a group of investors).
The District was formed to create Coors Field 26 years ago. In 2017, the District’s lease with the Rockies was up, although there were three 5-year extension options. A consultant hired by the District estimated Coors Field would need $200 million of capital improvements in coming years for things like new elevator or escalators, seat replacements, or a new giant screen (like computers, they need replacing every 5 years or so, Matt Sugar, District spokesman, said)
“It didn’t seem fair to the Rockies or me that we should have all of that burden – it’s (the District's) stadium and a driver of revenue downtown for them,” Monfort said.
Monfort and District officials eyed the piece of District-owned land that was called the “West lot” – a former parking lot near the stadium.
“We decided we could sell – or as it ends up – lease it to a developer and put that cash flow into the stadium,” he said.
The request for proposals issued in 2017 drew several from developers, but all wanted the lease payment to increase as the lease aged, with most coming in years 30-99.
“That didn’t meet the needs of the stadium, so we got a group of people together and put a proposal into the district that would front-end load the money,” Monfort said.
The result of negotiations was a 99-year lease with Monfort's development group worth $125 million to The District. For the first five years, the development pays $7.5 million annually to The District, then $5 million per year for years 6-20 and $1.25 million for years 20-30.
"The 30-year-lease agreement (with $125 million paid in that time) is significant in itself," said Sugar. "No taxpayer money will be sought in that time, and the responsibility for the $125 million comes from the development. For a taxpayer-owned facility to have a team put that kind of money over this period of time is very significant ... we believe it's unmatched in Major League Baseball."
The 26-year-old stadium is the fourth oldest in the National League.
"Stadium price tags are going up," Sugar said. "You won't find anything being built in the last few years under $1 billion. ... It's a huge benefit to taxpayers. They've not seen a tax on that stadium since 2001. They have not had to pay for the facility they own and it's been kept up to incredible standards."
“We got rid of the parking lots, will get better paying customers in there,” Monfort said. “It’s something that made a lot of sense for both. ... There is absolutely zero taxpayer money in that development.”
Building through the pandemic
The estimated $365 million McGregor Square development was built by Greeley-based Hensel Phelps and designed by architecture firm Stantec, based in Edmonton, Canada.
“This is the marriage of baseball and Denver,” said McGregor Square General Manager Patrick Walsh. “It’s an extension of Coors Field.”
Walsh was initially just an investor, but then “fell in love with the project” after sitting in on some planning meetings.
“We view this as a legacy project,” Walsh said. “We designed and built it the right way, and will operate it the right way.”
An example of how “hands-on” the management team was throughout the project was evidenced by Walsh himself. He laughs at the memory of driving his truck up to Arapahoe Basin ski area and getting a couple of old ski lift chairs for customers to create “Insta moments” (publishing pictures on social media platform Instagram) in Tom’s Watch Bar.
They worked through pandemic-related issues in 2020, namely the biggest office lease from co-workspace company WeWork crumbling as work-from-home necessity severely reduced companies’ use of office space.
Law firm Lewis Roca Rothgerber Christie LLP is now set to occupy the top two floors, with cybersecurity firm Red Canary grabbing floors 8 and 9.
The sales of the 103 condos slowed considerably in 2020, but has since picked up as closure restrictions have eased, COVID-19 cases declined and vaccines becomes more widely used. Now more than 75% are sold and 50 residents are moving in, Walsh said.
The development replaced all the lost parking, and then some, with the addition of a 425-space subterranean garage.
The baseball-themed Rally Hotel, operated by Sage Hospitality (the company that also operates The Maven at Dairy Block and The Crawford at Union Station), offers 174 rooms and a second-floor space to showcase baseball and Rockies memorabilia. Walsh said LoDo was lacking meeting and event space, so the Rally has a 2,100 square-foot ballroom and a 6,500 square-foot plaza deck.
Walsh and Monfort said they are especially proud of the Square plaza, providing open space that was lacking in Lodo.
Stantec’s lead architect John Yonushewski told ENR Mountain States in April 2020: “Even as LoDo has evolved to become a hub of retail and commercial activity, the neighborhood lacks a space for events and areas where people can gather.”
“Most developers take every square foot of land and put a revenue-generating deal there,” Monfort said. “We could’ve put a building on it and could’ve gotten rent, but it was important to us the city have an open spot for people to congregate.”
Plans for free events include movies on the 66-foot wide by 22-feet high LED screen and concerts.
“Events will be ticketed eventually, but we want people out here now,” Walsh said. “Especially coming out of the last year and getting out after all that social distancing. We were real fortunate on timing.”
The deal to secure the Tattered Cover speaks to the developer’s emphasis on family-friendly entertainment, even at the cost of potential profits.
“The Tattered Cover is the national treasure of Denver,” Monfort said. “But the way that industry has gone … they’ve been forced into areas with cheaper rent – that was the only way to get in. We had to be creative and subsidize the operation a little bit.”
Tattered Cover CEO Kwame Spearman said it was important to maintain a presence there.
“We’ve been in LoDo for 26 years and had no intention of leaving,” he said. “We were incredibly fortunate McGregor Square happened.”
The 1,600-foot book store is but a third the size of the former location on Wynkoop Street but right in the middle of the action. The company’s lease calls for rent to be paid as a percentage of sales.
“It was an incredibly fair opportunity,” Spearman said. “Communities have to make a decision if they want to support local businesses. … We were fortunate to have a partner like that with this lease structure.”
“Twenty six years ago, when Coors Field opened and we were then at our Wynkoop location, those two locations really revitalized lower downtown. I get the feeling McGregor Square is going to do that again.”
Other developers are taking notice as well, and complimenting the project because of the difficulty of the urban-infill, mixed-use project built in less than five years.
"I've been doing this for 40 years and these kinds of developments are like the most difficult dive -- (former U.S. Olympic diver) Greg Louganis quadruple flip hard," said Bryan Koop, executive vice president of Boston Properties Inc. (NYSE: BXP).
His company teamed with DNC Delaware North Companies to build The Hub, a 1.6 million square-foot development next door to TD Garden arena where the Boston Bruins hockey team and Celtics basketball team play. It was the site of the storied Boston Gardens, but a parking lot for the last 20 years.
"That scale of real estate development is, by far, one of the hardest to put together," he said. "Mixed use projects in and of themselves are challenging. Retail might be good, but the office market is bad, and vice versa. You have to have a long-term vision and enough capital to weather any storms -- like a pandemic."
Koop and Jenkins presented the projects together at an Urban Land Institute national meeting in 2018, so he learned a lot about McGregor Square.
"The response at ULI was phenomenal," he said. "When you look at some of these projects around the country, not all of them work. ... I've seen some, and I won't mention names, that are just soul-less. They're all hard surfaces and sports bars."
He especially liked the Tattered Cover touch: "That was a really nice gesture on (Monfort's) part. I guarantee you there's not another book store in a stadium project that I know of, and we've looked at a lot of them."
Having a long-term commitment, and vision, is important for projects like these, he said. Many developers "flip" the properties after they're built, and the new owners might just look at investment potential as opposed to having a passion for the project.
"The average length of office ownership has dropped to about 48 months in the last 20 years," Koop said. "The ability to own one long-term, to keep it up and invest the capital in it is incredibly important. It has the makings for a real city treasure. What comes with that is Denver pride."