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DENVER-The Denver Urban Renewal Authority board has unanimously approved $8 million in financing for the redevelopment of the vacant Mercy Hospital called City Park South. The development on 8.3 acres next to City Park will have a completed value estimated between $200 million and $250 million.

“This is a great project. We‘re glad to be able to help,” DURA chairman Tom Stokes told developer Rick Wells of CPS Investments after the approval of the tax increment financing. CPS is preparing the land, one of the larger infill sites in Denver (outside of Stapleton and Lowry), and will sell it to other groups. The land is bordered by Fillmore Street, the alley between Milwaukee and St. Paul streets, East 27th Avenue and mid-block between East Colfax and 16th avenues.

Mercy Hospital, a 144-ft tall hospital that was first built in 1933, has been vacant since 2000. CPS will demolish the building. The DURA financing will help remove asbestos from the building, as well as help pay for some infrastructure costs and environmental remedial work, such as removing underground tanks and contaminated soil, if there is any.

Next week, Allied Realty Services is scheduled to buy the 3.3-acre, L-shaped hospital block from CPS, where Allied plans to develop 240 luxury apartment units called “Retreat At the Park.” Lauren Brockman, who heads Allied’s Denver office, tells GlobeSt.com he thinks the timing will be perfect for the community, as it won’t be coming on line for 18 months to 24 months. “And it’s not too big,” Brockman tells GlobeSt.com. “It’s only 240 units. It’s not like it’s a 400-unit development.”

At the same time, 240 units allows him to spread his costs more efficiently, he tells GlobeSt.com. “If you have much less than that, you lose your economies of scale,” he tells GlobeSt.com. Another advantage of the size is that it is easier to find a manager for a 240-unit property than a 350-unit or larger property, he notes.

He says it is too early to go into any details, such as the rents or amenities. “Anything I would tell you today, would turn out to be inaccurate by the time we open,” he says.

In addition, Wells, of CPS, notes he is under contract with Wonderland Homes to develop 130 for sale units in nine buildings to be built on the south side of 16th Avenue. Each three-to-four-story building will have as many as 16 one- and two-story units. At least 10% of the units will be “affordable.”

Wonderland is based in Lafayette, CO. It is known as a leader in “green,” or environmentally correct and sustainable construction. It built housing in the Highland Gardens development, which formerly was the Elitch Gardens amusement park, in northwest Denver, for example.

A future phase will include 286 condos in three buildings on the corner of 17th Avenue and Fillmore Street. Two of the buildings will be high-rise towers, one with 28 stories and the other with 22 stories. Wells says he is negotiating with a developer for the towers, and is close to a deal.

Also, plans are calling for a single building on St. Paul Street that will include up to 33 “affordable” units. These deed-restricted units will be for sale. “We might do that one ourselves,” Wells tells GlobeSt.com.

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