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DENVER-Matrix Bank has paid $11 million for the 15-story, 108,000-sf Terracentre office building at 1100 Stout St. next to the Colorado Convention Center in Downtown. Matrix plans to move its $1.6 billion-in asset bank in Las Cruces, NM, to the Terracentre.

The bank will lease at least 50% of the building and lease the remaining half to other tenants, says Mark Spencer, the bank’s chairman.

Matrix bought the building from Denver-based ROC Properties, which purchased it a year ago for $6.5 million.

”Our original contract gave us the option to pay $9.5 million for the bank and keep ROC in as a back-end equity partner,” Spencer tells GlobeSt.com. ”When we took a pencil to the numbers we decided it made more sense to buy it ourselves. We see the value of the building continuing to increase.”

However, the city of Denver is considering condemning the building. The building was scheduled to be condemned and razed by the city in order to put a 5,000-seat auditorium in the $268-million convention center expansion.

Last month, Mayor Wellington Webb’s office said it dropped the condemnation, which is why Matrix was willing to buy Terracentre. But the special projects committee of the city council recently met in executive session to discuss whether it should go ahead with the condemnation.

”It’s ludicrous to float this around and not make a decision,” Spencer says. He adds an internal appraisal values the building at ”north of $14 million.” Insiders tell GlobeSt.com that appraisals by the city, which have yet to be released, carry similar values.

The cloud of the condemnation makes it difficult to lease the building, Spencer says. Also, Matrix is in the process of paying some ”serious money” in architectural and site planning fees, he says. In addition, Matrix plans to wire the building with fiber optics for a data center for its 1,000 employees across the country.

”It would be our nerve center,” Spencer tells GlobeSt.com. The new bank also would create about 200 new jobs Downtown at a time when the market is softening.

But Seth Berger, who is trying to develop a $240-million Hyatt Regency hotel across from the convention center, says the city should condemn the building, even if it has to pay more money than it originally allocated, he says.

The city earlier earmarked up to $9 million for the building. If the city had to pay an extra $5 million for Terracentre, it would cost it about $275,000 extra a year, he says. By contrast, the auditorium would generate millions of extra revenues per year, he says.

”It’s really pretty simple math,” Berger says.

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