Belmar, a 22-block redevelopment project in Lakewood, CO is the transformation of a declining regional mall into a vibrant, mixed-use development. The development has about 1.1 million square feet of retail space (including over 80 shops, restaurants and entertainment uses), 900,000 square feet of office and hotel space (250-room hotel) plus 1,300 residential units. The development also incorporates nine acres of parks, plazas and other public spaces. This case study reflects redevelopment through the second phase of the project, beginning in 2001 and completed in 2005, representing 665,000 square feet of retail space, 212,000 square feet of office space, and 196 residential units. Lingering environmental concerns that were mitigated to make way for the $426 million development can be traced to former dry cleaners and automotive service shops.
Previous uses of the 104-acre site (dry cleaners and automotive service shops) left behind contaminated groundwater and soil. In addition, demolition work involved the removal of asbestos and hazardous materials from existing buildings. In total, environmental remediation work cost an estimated $5.0 million. Both dry cleaning solvents and petroleum from contaminated source soils were removed and successfully addressed. Injecting carbohydrates into the solvent plume has been extremely successful and has cut the anticipated remediation timeline and cost. Site remediation, including carbon injections, was timed to integrate into site development as to not impair the construction timeline. Successful negotiations with other responsible parties resulted in the collection of $2.5 million dollars from these responsible parties.
In 1966 Villa Italia Mall opened to great fanfare as more than 725,000 people from 36 states visited opening weekend. At 880,000 square feet, Villa Italia was the largest indoor, air-conditioned shopping mall between Chicago and the west coast. The development also included several outer commercial structures which housed a laundromat, dry cleaner facility and auto service/repair shops. For 35 years, “Villa” was the bustling commercial and social center of Lakewood. Despite remodeling efforts, Villa Italia was unable to resist changing social trends and increasing competition. After sales peaked in 1994, the City of Lakewood became concerned over the mall’s future and initiated redevelopment discussions with the community and developers. By 1999 the property was around 50% vacant, in July 2001 the mall closed. Not only was the 104 acre site nearly idle, but Lakewood’s budget was significantly impacted from the loss of sales tax revenue.
To address environmental issues the developer, Continuum Partners, obtained a $1.95 million loan from the Colorado Brownfields Revolving Loan Fund and used a $110,000 brownfields grant that the City of Lakewood secured from the federal government to help pay for the assessment and remediation.
Three Metropolitan Districts were established on the Belmar site by the developer to assist in the financing, operation and maintenance of the extensive public improvements. The districts issued bonds to fund capital improvements. Mill levies within the commercial and residential districts are used to operate and maintain public/capital improvements. Approximately 60% of the total cost of public improvements were financed through bonds, the developer will pay the remaining 40% of the cost.
Both tax increment financing (TIF) and a public improvement fee (PIF) supported revenue bonds were used. Beginning in 2002, the Lakewood Reinvestment Authority pledged $500,000 in Alameda Corridor property tax increment toward the repayment of the bonds, plus annual growth of 3%. The agreement terminates when all bonds have been retired and the developer is fully reimbursed for public improvements, or August 1, 2027 whichever comes first. In 2003, the developer imposed a 2.5% PIF with the City of Lakewood waiving 2% of its 3% sales tax on the site. In addition, the City will rebate half of its 3% lodgers’ tax toward the repayment of bonds issued for public improvements when the planned hotel is completed.
The former Villa Italia mall was the closest thing to a town center that Lakewood had. When Villa died, Belmar was proposed as a new, urban-style town center to anchor the community.
The community has played an integral role. In the mid-1990s, the Southwest Quadrant committee, a citizen’s advisory group, was organized to consider the area’s future and adopt guiding principles for development. In 1997, the Alameda Gateway Community Association was incorporated to address improvement plans for the area surrounding Villa. In addition, the Villa Advisory Committee was appointed by the mayor in 2000 to provide input and guidance in the redevelopment process.
The project team spent the year prior to development working closely with advisory committees, neighborhood groups, civic groups and homeowner associations. During a critical planning phase in 2001, the project team met with community groups on more than 30 occasions. Beyond seeking the community’s input as to the redevelopment opportunities, the project team has been committed to keeping the community informed throughout the process.
At full build out, there will be 1,300 condominiums, row homes and lofts ranging in size from 650 square feet to 2,500 square feet with price points between $180,000 and $900,000. Residents of Belmar will have an estimated total household income of $14.5 million at full build-out. With sustainability in mind, Belmar’s commercial buildings have flexible designs that can accommodate changing uses in the long-term. Integrating residences into the project ensures local business demand, upkeep, and long-term stewardship.