Our Thoughts on the Alpine-Balsam Project
There has been a consistent drip of news about Boulder’s Alpine-Balsam project. This last week it made headlines again following a city council meeting which included a review of density options for the development. Let’s take a quick look at Alpine-Balsam and what it means for Boulder commercial real estate.
What is the Alpine-Balsam Project?
Alpine-Balsam is a redevelopment project in Boulder. It is an 8.8-acre area west of Broadway near Alpine and Balsam and was the former home of Boulder Community Health. The entire site was purchased by the city of Boulder for $40 million in 2015.
The site is intended to be developed as a hub for city offices and service as well as for retail and residential uses. The uses are roughly defined by a Vision Plan, but city council is the middle of an ongoing conversation with the community about the details.
The Devil is in the Details (or the budget)
While the Vision Plan seems pretty straight-forward — mixed use development with an emphasis on city services and affordable housing — the devil is in the details. Does the county get some space for services? How much real estate can be set aside for retail and office? How dense? This latest conversation has many citizens paying close attention.
But for us, all of theses details are overshadowed by one larger reality: the city simply cannot afford to carry out this project. The economics are obvious. There is not money in the budget to complete the development.
At a City Council meeting in April, we saw glimpses of a reality check from members. According to the Daily Camera, councilman Bob Yates said, “I agree that these numbers continue to surprise me. … I think we need to have a big step back, deep dive and talk about what we’re doing here.” Other council members shared deep concerns about the project.
But despite these concerns, in a May meeting, the city chose to move forward with the $59 million project. City staff presented as argument, among other things, the city’s track record with such developments projects as the Civic Area, The Holiday Neighborhood, and Boulder Junction. Of these, Boulder Junction is most akin to Alpine-Balsam and that has been plagued with fallen deals, lawsuits, and vacant properties.
Further, a hub for city employees and services directly in the middle of town, along with high-density housing, will create major congestion in a city that notoriously struggles with congestion.
And in a time when retail tax revenue is changing (eCommerce, changing lifestyles, Boulder’s retail scene), the city should focus on a more conservative reserve program. The bottom line is that this project will be too expensive for the city. Citizens are likely to be paying for it for a very long time.
We believe the project should be left to the private realm. It could certainly still move forward as a public-private partnership with the city offering incentives to keep things like affordable housing a priority, but should be led by real estate developers. The city ought to sell this property, get the liability off its books, and look to alternative properties as a hub for services.
Another alternative is for the city to sell to a developer with the option to lease back space at a lower than market price. This reduces liability and still gives them some of the office space they want at this location.