The Denver Post
Breaking new ground at Gates
Community benefits tied to public subsidy
By Tony Robinson
February 12, 2006
A conceptual rendering of the Gates redevelopment project planned by Cherokee Denver LLC, seen from Interstate 25 and Santa Fe Drive. (Design Workshop / Dick Sneary)
A visionary new era in Denver development has opened with approval of the Gates project, because for the first time community benefits have been tied to a publicly subsidized project.
The Denver City Council last Monday approved public financing for the $1 billion redevelopment of the Gates rubber factory at Interstate 25 and South Broadway, the city's largest private development since Stapleton. The development of housing, retail space and offices to be done by Cherokee Denver LLC will involve more than $250 million in public subsidies, including interest payments and other bond proceeds needed to generate $126 million in direct subsidy to the development.
Such subsidy packages in Denver are nothing new. What is new is that the developer has agreed to provide an innovative range of "community benefits," negotiated between the developer, the city and a community coalition known as the Campaign for Responsible Development. Those benefits include good jobs, health care and affordable housing.
Taxpayers will support the Gates development with deep subsidies through tax increment financing and a taxing district. Dozens of recent Denver projects have involved such subsidies, delivered by officials anxious to attract investment and trophy projects.
Many LoDo loft projects received taxpayer subsidy, as did the Adams Mark hotel and the downtown Pavilions. Stapleton is receiving $300 million in subsidies. In terms of sheer capital invested, Denver taxpayers are the city's largest development financier.
Unfortunately, the concern of city leaders for attracting profitable new development has not always been matched with concern for how subsidized development affects the social health of Denver. Consequently, in most previous projects, deep taxpayer subsidies did not come with expectations of living-wage jobs nor health care benefits. Construction was not always done by high-road contractors with a record of paying workers and skilled tradesmen well. The housing at these developments often involved few to no lower-income units.
In this way, Denver has subsidized a dual downtown of glittering trophy projects amid stagnating wages. Rich new lofts sprouted, while housing became less affordable for many residents. Millions were spent to subsidize retail space for companies like the Stapleton Wal-Mart, while employee health care coverage withered. A deep unease settled on many Denver residents, who felt something was wrong with a development model that subsidized profitable developers while average social health deteriorated.
A few years ago, this concern united residents and community organizations around a campaign to ensure that the proposed Gates tax subsidy package included a range of "community benefits," such as affordable housing and good job guarantees. Over the last two years, this group has negotiated with Cherokee and city officials. The result is a ground-breaking community-benefits framework that will be attached to the Gates plan and that ensures that the project will improve the city's financial health, the developer's bottom line and the community's social health. The Gates development model is long overdue in Denver.
In exchange for the sizable public subsidy, Cherokee has agreed that its project will include 20 percent of rental units for lower-income working families. The company has gone beyond city minimum requirements in agreeing to living-wage jobs, including some permanent site-maintenance jobs after the project is complete. They have hired a union contractor to do the infrastructure (publicly financed) portion of the construction, guaranteeing good jobs with health care for local workers. Cherokee will go beyond legislated minimums in environmental clean-up and public involvement.
Denver's victory is not isolated. There is a growing national movement to reclaim public dollars, and to tie subsidies to developments that work for residents at all income levels. Los Angeles, Milwaukee and Atlanta, among other cities, have similar community benefit expectations in their subsidy packages. With this innovative plan, Denver has joined that national community benefits movement. Gates is a precedent-setting project that reveals how much can be achieved by committed officials, a responsible developer and mobilized citizens.
The bar has been set for future subsidy packages; let's hope our officials maintain this standard when the next development rolls down the line and the naysayers chime in with claims that we can't possibly expect the market to allow good wages and affordable housing.
Gates proves what we've all long hoped: When public dollars are involved, there is room in this economy for good wages, decent benefits and dignified housing for all.
Tony Robinson, an associate professor of political science at CU-Denver and CU Health Sciences Center, has worked for several years with the Campaign for Responsible Development.