The Denver Design Center’s owners are on the verge of losing the property in foreclosure, which could complicate efforts to redevelop the surrounding South Broadway neighborhood into the next LoDo or Cherry Creek North.
Spokesman William Porter said the Denver clerk and recorder is handling one of the largest foreclosures — a $42.1 million default — that the office has ever dealt with.
Lender CW Capital Asset Management of Bethesda, Md., bid $25 million Tuesday for the property at 595 S. Broadway.
CW Capital, which has pushed back the foreclosure auction nine times waiting for a buyer to emerge, could have claimed the center on Thursday but withdrew its bid Tuesday evening, Porter said.
CW Capital — or another interested buyer — has until May 13 to bid on the property before the foreclosure initiated in January 2013 expires May 15, Porter said.
“The Denver Design Center was impacted significantly by the Great Recession, and we have been actively pursuing a loan workout negotiation with the property’s lender for nearly three years,” said Chris Souther, who represents the center’s property manager, CFPM.
The center’s showrooms cater to designers working with higher-end and customized finishes and furnishings. Souther said CFPM continues to manage the property, and is making its best efforts to retain it.
CW Capital declined to comment.
Back in 1996, Warren Cohen and Jim Frank acquired the 10.2 acres where the center sits. In 2004, they added the Broadway Marketplace, a much larger area to the north that includes a busy Sam’s Club and Kmart, as well as the nearby Collection, which houses design-related businesses.
Souther said the two more recent acquisitions are nearly fully leased, while the Design Center struggles. The combined holdings, rebranded the Denver Design District, include about 900,000 square feet of built space and large surface parking lots.
Two RTD light-rail stations in the area, one at Broadway and another at Alameda Avenue, have changed the calculus from car-focused retailers to transit-oriented development.
Cohen and Frank won city approval for a master development plan in May 2009 that included up to 10 million square feet of developed space, including 3,000 residences, 350 hotel rooms, 2.6 million square feet of office space and 1.2 million square feet of retail.
In 2011, the pair teamed with Chris Waggett to form D4 Urban LLC to develop the 75 acres south of Alameda, west of Broadway, and east of Interstate 25 and the nearby light rail.
Denver City Councilman Chris Nevitt, whose district includes the Denver Design District, said he remains confident the plan will come to fruition and serve as a model of transit-oriented development.
Drainage work is underway using tax-increment funds available to the Broadway Marketplace to the north of the Design Center. Construction of the Alameda Station Village apartment complex, in the district’s northwest corner, is also moving forward.
Denver’s master plans also are written so that other property owners can step in and complete them if necessary.
“Whatever happens doesn’t change the long-term vision for the area,” said Andrea Burns, a spokeswoman with Community Planning and Development in Denver.
Souther said whoever controls the property following foreclosure would have to comply with the master plan and work with the owners of the other parcels. He adds that the land in foreclosure is one of the last sections slated for redevelopment in the multidecade effort.
“As you know, redevelopment of any parcel will only occur when the economic conditions for such are present,” he said.
Porter said CW Capital could refile the foreclosure if it expires, although that can be expensive.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
