Stapleton Development Corporation

The Stapleton Story

Background

Commercial Aviation

Stapleton began serving Denver and the region's commercial aviation needs in 1929 on 640 acres of grassland. By the time it closed in February 1995 with the opening of Denver International Airport, Stapleton was the fifth busiest airport in the United States and covered approximately 4,700 acres.

Dramatic growth in aviation activity in the 1970s and the first half of the 1980s posed two challenges for Stapleton's future as an airport. First, inadequate separation between runways to support multiple planes landing during reduced visibility conditions limited Stapleton's capacity to handle this growth. Second, the growth in air traffic spawned significant neighborhood opposition to airport operations and expansion proposals.

Settlement of a lawsuit brought by a group of Park Hill residents over noise and threats of legal action by Adams County to block expansion of runways onto the Rocky Mountain Arsenal served as catalysts for seeking an alternative location for growing aviation activities. Agreements with both Park Hill residents and Adams County prohibited any future active aviation uses at Stapleton once DIA opened.

Voters Approve Relocating Commercial Aviation

In January 1985, representatives of the City and County of Denver and Adams County announced an agreement in principle to relocate commercial aviation operations to a new site northeast of Stapleton. In 1987, the Colorado General Assembly authorized Adams County voters to decide whether a 35,000-acre parcel of land in Adams County could be annexed to the City and County of Denver for a new airport site. In 1988, voters of Adams County approved the annexation and Denver voters endorsed the plan in the May 1989 election.

History of Federal Government's Role in Stapleton

The federal government played a significant role in Stapleton's past and continues to playa part in its future. Its historic role began with decommissioning the Rocky Mountain Arsenal after World War II. In the course of this process, the federal government deeded land south of the Arsenal to Stapleton for commercial aviation. As a condition of this land transfer, the federal government retained a reversionary right to the property -- the right to take back the land if it was no longer used for an airport.

During the course of building Denver International Airport, Congress authorized the release of this reversionary interest in the land contingent on the land being sold at fair market value.

Federal requirements oblige the City and County of Denver to return proceeds from Stapleton land sales to DIA. Similarly, over the years Stapleton has received grants from the Federal Aviation Administration for its development that required selling Stapleton property at fair market value.

Planning for Stapleton's Future

Over the course of the past 11 years, two private organizations have been at the forefront of efforts to ensure the quality of Stapleton's redevelopment: Stapleton Tomorrow and the Stapleton Redevelopment Foundation.

Stapleton Tomorrow

In 1989, with the end of aviation activities at Stapleton all but certain, planning for the future of the property began when a group of 35 citizens undertook a large-scale community planning exercise known as Stapleton Tomorrow. Over the next two years, Stapleton Tomorrow sought the opinions of a broad spectrum of Denver area residents about how to redevelop Stapleton. Creation of jobs, open space, and recreational and cultural opportunities emerged as predominant concerns.

Stapleton Tomorrow's work concluded in 1991 with creation of a concept plan for Stapleton re- . use. The plan emphasized economic development; benefits to adjacent neighborhoods; enhanced environmental quality; high standards of urban design, educational and cultural opportunities; and the generation of revenues to support airport objectives. The Denver City Council adopted the Stapleton Tomorrow concept plan in June 1991 as part of the Denver Comprehensive Plan.

Stapleton Redevelopment Foundation

In 1990, a group of civic and business leaders created the Stapleton Redevelopment Foundation (the Foundation). Financed by private philanthropy, this non-profit group was formed as a civic vehicle to work in partnership with the City administration. Its aim was simple -- maximize the public benefits from redevelopment of the Stapleton site. Private funds from corporations, foundations, and individuals supported the activities and redevelopment objectives of the Foundation.

In 1993, the City and County of Denver entered into a partnership agreement with the Foundation. Working with elected City officials and staff, the Foundation agreed to fund and guide creation of a development plan and the physical and financial development program for the Stapleton site. The Foundation also agreed to assist the City in defining a long-term management structure for the Stapleton redevelopment program and in pursuing desirable first phase projects and demonstration opportunities.

To oversee creation of a plan for the redevelopment of Stapleton, the Mayor appointed a Citizens Advisory Board (CAB) made up of 42 members representing a variety of perspectives and constituencies, including business, neighborhood, and professional associations.

Stapleton Development Plan - The "Green Book"

After two years of work and an extensive community outreach effort, the Foundation produced the Stapleton Development Plan, commonly known as the "Green Book." This document established the framework for redeveloping Stapleton. In March 1995, City Council amended the City's Comprehensive Plan by replacing the 1991 Stapleton Tomorrow Concept Plan with the Stapleton Development Plan.

From Planning to Action

With the completion and adoption of the Stapleton Development Plan, three major steps moved Stapleton from the planning to the action stage: establishment of the Stapleton Development Corporation, signing of a Master Lease and Disposition Agreement between SDC and the City, and preparation of a blight study by SDC.

Stapleton Development Corporation

In November 1995, the City and the Denver Urban Renewal Authority (DURA) signed a cooperation agreement to create the private, non-profit Stapleton Development Corporation (SDC) as a vehicle to lease and sell Stapleton property. SDC has 11 voting directors. DURA appoints two directors and the Mayor of Denver appoints nine. Denver City Council must confirm all eleven directors. There are five additional ex-officio directors -- the Manager of Aviation, the City Council member whose district includes the property, a member of the Citizens Advisory Board, and two persons representing Commerce City and Aurora.

Master Lease and Disposition Agreement

SDC was created to serve as the primary vehicle for selling and leasing Stapleton and entered into a Master Lease and Disposition Agreement (MLD) with the City in July 1998. The MLD gives SDC the responsibility to maintain and lease Stapleton for 15 years, an option to purchase the property, and the authority to sell parcels for uses consistent with the Stapleton Development Plan.

This MLD was amended in 1999 to reflect revisions necessitated by the FAA and an agreement with the airlines. The airline agreement settled a dispute the airlines filed with the FAA and, among other things, provided for agreed upon sources of funding to pay certain costs associated with environmental remediation, demolition, and other disposition costs. Additional amendments to the MLD are anticipated so that it will conform to the purchase agreement between SDC and Forest City, the master developer.

Stapleton Blight Study

In 1997, the SDC contracted for a study to determine whether the Stapleton property should be considered blighted and appropriate for designation as an urban renewal area. This was the first step to determine Stapleton's eligibility for tax increment financing (TIF), a mechanism by which the increase in property tax and/or sales tax revenues generated by a redevelopment can be used to help finance infrastructure construction. The new tax revenue that is created must be used for infrastructure improvements that have a public benefit and that support the redevelopment effort.

DURA's Role

DURA became involved in the Stapleton redevelopment effort in 1995. Since DURA is the only entity in Denver with the statutory power to fund redevelopment through the use of TIF, its involvement in Stapleton has been necessary to help finance the project.  DURA, created by the City in 1958 pursuant to state law, is responsible for conducting urban renewal activities throughout the City and County of Denver. Under state law, DURA is charged with assisting the City in eliminating and preventing slums and blighted areas. DURA is governed by an 11-member board of commissioners, appointed by the Mayor of Denver and confirmed by the City Council.

Selecting a Master Developer

After entertaining proposals to develop the remaining land at Stapleton, the SDC conducted a competitive process in 1998 to select a master developer. SDC chose this approach for several reasons. A master developer for the entire parcel would promote development over time of the entire parcel, not just its edges. In November 1998, SDC selected Forest City Enterprises, Inc., a family owned and publicly traded business with a commitment to mixed-use urban infill. projects, to be its development partner. Forest City offered experience in all aspects of development, access to capital, and national marketing expertise, as well as a commitment to affordable housing, sustainable development, minority participation, and other principles of the Stapleton Development Plan.

Forest City entered into an Exclusive Right to Negotiate with SDC for the purchase of Stapleton. SDC and Forest City have finalized a purchase agreement that will obligate Forest City to buy all developable land at Stapleton. As a condition of selling the balance of the Stapleton property to a master developer, the Denver Department of Aviation committed to selling property that was environmentally remediated, substantially demolished, and zoned for redevelopment. These commitments, along with additional understandings regarding future financing of infrastructure development on the site, are intended to be included in a new set of Master Lease and Development Agreements between the City and SDC. These amendments will require City Council approval.

Forest City Enterprises, Inc. 

Forest City is a national developer and manager of commercial and residential investment real estate throughout the United States. Publicly traded on the New York Stock Exchange, Forest City owns $3.5 billion in assets and has an additional $2 billion currently under development. The firm has been extensively involved in major urban redevelopment projects throughout the United States.

Land Sales (link to SDC takedown map) After aviation activities ended at Stapleton in 1995, the City sold and leased parcels of land to take advantage of development opportunities. Land totaling about 500 acres was been sold to:

  • Dillon Real Estate, who sold a portion for warehouse facilities;
  • United Airlines for a $250 million expansion of its computerized flight training center;
  • RK Mechanical, Inc., Colorado's largest mechanical contractor, for apprenticeship training, fabrication, and administration;
  • Swift Transportation; and
  • Union Pacific who, in turn, sold the land to Catellus Development Corporation, which is developing the Stapleton Business Center.
Demolition and Environmental Remediation

Demolition by the City's Departments of Aviation and Public Works is well underway, with all five concourses already removed. Demolition of the main terminal will be completed in the spring -- except for the main airport control tower, which will be preserved. Other buildings removed include hangars along Montview Boulevard, the Ports of Call aviation complex, the boiler plant that heated and cooled the terminal complex, and two postal buildings north of the United Airlines complex. Additional structures will be demolished before redevelopment.

In keeping with the "Green Book's" goal of conserving resources, recycling of Stapleton's 1,100 acres of pavement has begun and more than 200,000 tons of asphalt have been harvested from parking lots and runways at Stapleton for re-use as road base at the Rocky Mountain Arsenal National Wildlife Area, and other areas.

The City's Department of Aviation is also contracting for environmental remediation of Stapleton to agreed-upon standards that should result in approval of the remediation by the State. Jet fuels and some glycol, a de-icing agent, are the major sources of surface, subsurface, and groundwater contamination.

It is anticipated that the Aviation Department will spend up to $120 million for environmental remediation and demolition to prepare Stapleton for development. These costs will be financed through a portion of the land sales proceeds, airport fees and monies from the airlines.

As an added precaution, the Department of Aviation purchased insurance to pay for remediation of currently unknown pollution discovered at Stapleton. The insurance also covers changes in the law that would require additional remediation.

Zoning

Stapleton was zoned entirely for aviation use. Immediately after the airport moved, temporary zoning was put into place to meet the needs of users such as Colorado Studios and the Bladium Sports Club. The first two large users, Dillon (King Soopers) and Catellus, were rezoned 1-2 with waivers and PUD, respectively. These rezoning processes, as well as experiences at Lowry and Gateway, pointed out the need for new zoning tools.  Standard zoning did not meet the vision of Stapleton for mixing of uses and densities and greater review at the time of site plan review, and PUDs were not flexible enough to meet changing market conditions over time. As a result of this situation, the Community Planning and Development Agency worked closely with representatives of SDC, the Stapleton CAB and other organizations to develop zoning useful to these large tracts of land.  The City Council amended the City's zoning codes in November 1998 to provide for several new "mixed use" zoning categories. Subsequently, the City Council rezoned the remainder of the Stapleton site into various mixed-use districts.

The mixed-use zoning provides an innovative approach to promote the land use vision of the "Green Book"-to develop a mixed-use, balanced community incorporating a coordinated grouping of neighborhoods, specialized districts, and special corridors. The key elements of mixed-use zoning are a use matrix that gives developers the ability to respond quickly to future trends that cannot currently be predicted. Balancing this front-end flexibility, development must undergo an intense review process prior to construction. Overall, the City review process includes the following:

  • General Development Plan - land use master plan;
  • Subdivision Plat - establishes major rights-of-way and utility corridors;
  • Site Plan Review - detailed review of site layout; and
  • Urban Design Review - review of architectural, landscape, and site design.

Generally, these reviews have four purposes:

  • Determine that all City development requirements are met as efficiently and effectively   as possible;
  • Provide architectural review based on Rules and Regulations adopted by the Denver   Planning Board;
  • Advance the vision established in the Stapleton Development Plan ("Green Book''); and
  • Mitigate negative impacts on adjacent existing neighborhoods.

Now that zoning for Stapleton has been adopted, the City and the developer shall work together to craft a development agreement that further refines the development review process for Stapleton. Such a development agreement would detail the complex and multiple steps necessary to move from the "Green Book" concept plan and the broad mixed-use zoning to site plans that fully implement the vision inherent in the "Green Book" and the mixed- use zoning concept plan.

Infrastructure Planning

Because of its previous use, the Stapleton site had little infrastructure, except at its edges, to support development. Completely new public infrastructure was constructed to support this major development. This infrastructure work includes: re-grading of the land to provide adequate storm water drainage for the increased amount of impervious surfaces; installation of water, sewer and other utility lines; development of arterial, collector and local roads; planning and developing parks and trails; preservation of wetlands; a relocated Havana Street/I-70 interchange; and installation of community facilities, such as fire stations, a recreation center, a branch library, and schools.

These infrastructure needs provided opportunities to connect existing neighborhoods to one another through roads and parks and trails, as well as a once-in-a-Iifetime opportunity to preserve large urban open space and park land. Natural features such as the high plains Sand Creek will provide a recreation corridor between Stapleton's neighbors in Aurora and Commerce City. A large prairie park will connect to the Rocky Mountain Arsenal's 27,OOO-acre wildlife preserve. There is also space for a large outdoor sports complex.

SDC hired Turner Collie & Braden to prepare initial concept plans and cost estimates for this needed infrastructure. During the performance of due diligence on the site, Forest City hired BRW, Inc. to review those plans, and BRW prepared more detailed infrastructure plans for the site. BRW, Forest City, SDC and the City's staff worked together and produced a document entitled " Version E, Stapleton Sitewide Infrastructure Conceptual Level Cost Summary and Funds Allocation." Infrastructure financial models are based on this document.