Media Play Closing in Denver Dry Building

Perry is looking to replace Media Play, which along with T.J. Maxx is the largest retailer in the Denver Dry building at the 16th Street Mall and California streets. He says with the nearby Colorado Convention Center expansion and the 1,100-room Hyatt convention center nearing completion, now is a good time to be shopping for a new tenant.

Perry hired Pat McHenry of Trammell Crow to lease the space. Ideally, he would like to lease it to one tenant, but they would explore subdividing the space, Perry tells GlobeSt.com.

"I think there is already a lot of interest in the space," McHenry tells GlobeSt.com. "I would anticipate another national tenants. I think Ross and T.J. Maxx and Walgreens and Rite Aid have all performed really well in the area."

She says Media Play has been hurt by downloading from the Internet. Also, it is faces competition in Downtown from nearby Virgin Records and Barnes & Noble store in the Pavilions.

"Media Play, at this point in its history, having been sold by Best Buy, is not a high-credit tenant," McHenry tells GlobeSt.com. "We think we can get a stronger tenant as a replacement."

Media Play is owned by Minneapolis-based Musicland Group, Inc., which is a subsidiary of Sun Capital Partners, a Boca Raton, FL-based private equity firm. Musicland operates more than 900 stores under three names, Sam Goody, Suncoast Motion Picture Company and Media Play.

Media Play spokeswoman Laurie Bauer says the closing is "part of an evaluation of all of our real estate. At this time, we are closing because it is not meeting our goals and expectations. This is our only Downtown store in the country that is a Media Play. And it is our only two-story store, which presented a challenge."

The renovation of the Denver Dry was financed by tax increment financing bonds issued by the Denver Urban Renewal Authority. The bonds are repaid primarily by sales taxes and some property taxes. But if there is a shortfall in sales taxes because of the loss of Media Play, the Denver Dry can get more property taxes from the 15-block TIF area, which includes the Denver Pavilions and the Adam's Mark hotel, says Tracy Huggins, DURA's executive director.

Tom Mathews, a retail broker with CB Richard Ellis, says finding a replacement for Media Play will not be the easiest deal in the world. "It is unfortunate, but it presents a little bit of a challenge," Mathews tells GlobeSt.com. "Downtown is in the shadow of Cherry Creek as far as retail. Cherry Creek has so much momentum. Especially with the new Clayton Lane development that is getting Crate & Barrel. Urban Outfitters, for example, would have been a great deal for Downtown, but it chose to go into Cherry Creek instead. But I really hope they succeed in getting a tenant quickly for that space."