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DENVER-Demolition begins in earnest today on the now blighted but once thriving Dahlia Square retail center in Northeast Denver. But the eight-acre site at East 33rd Avenue and Dahlia Street has no developer.

The leading contender, however, is Alliance Development Partners, whose principals include former Denver Mayor Wellington Webb and prominent developer Jim Sullivan. Webb got the ball rolling on the redevelopment of Dahlia Square, which was opened on 1956 on top of a landfill.

Three dozen developers initially showed interest in developing the site, but only two–Alliance and Centex Homes–responded to the RFP. And Centex Homes recently dropped out of the running, with execs saying they couldn’t make the numbers work.

The Denver Urban Renewal Authority, and City Councilwoman Elbra Wedgeworth, continue to negotiate with Webb and Sullivan. It’s a complicated public-private partnership. The land is owned by the nonprofit organization Parkhill Community Inc., which was created by the Denver-based and for-profit Brownfield Partners. The only asset of Parkhill is Dahlia Square.

Brownfield contracted with Arcadis Inc. to remove asbestos from the buildings, raze the buildings and clean up the landfill, which will require digging a hole as deep as 20 feet and filling it back with clean dirt.

Brownfield is a niche real estate company, which, as it name implies, buys brownfield sites. “We see it as recycling land and not developing greenfield sites,” May B. Hashem, a principal of Brownfield, tells GlobeSt.com. However, it doesn’t remediate contaminated land.

Although Brownfield/Parkhill is not negotiating with a developer, any developer chosen by DURA has to pay a minimum of about $3.5 million to the group to cover its cost of buying and cleaning up the land. If the developer isn’t willing to pay the price, then DURA and Brownfield enter into a detailed negotiation process, she tells GlobeSt.com. Or as Wedgeworth says, the city must start the process of finding a new developer. In other words, its back to square one on a redevelopment she has been working on for the past six years, since she was first elected to the City Council.

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