DDA seeks authority to buy Denver Pavilions, aims to stabilize 16th Street and resell

Denver — City staff and the Downtown Development Authority (DDA) told the Finance & Business Committee on Oct. 28 that the DDA seeks authority to acquire Denver Pavilions and two adjacent Brookfield parking lots on 16th Street to keep the two-block area under unified ownership for short-term stabilization and eventual redevelopment.

What was proposed: Bill Mosher, a mayoral projects consultant, said the property encompasses roughly 350,000 square feet with about 25 current tenants and approximately 1,000 parking spaces (200 on Brookfield lots and 800 in two underground levels beneath the Pavilions). The property was financed for about $140 million in 2016; staff said a current loan balance of about $85 million exists and the lender has not received payments since the summer. The DDA proposal calls for an acquisition price of $37 million; staff sought authorization of up to $45 million to cover acquisition, deferred maintenance (estimated at about $11 million) and tenant build-outs (estimated around $6 million to occupy roughly 20,000 square feet).

Why the DDA is intervening: Mosher said the DDA’s objective is to avoid a lender takeover and the optics of bank ownership on 16th Street, to stabilize operations, to unify parking revenue for easier redevelopment economics and to assemble parcels so a coordinated redevelopment can proceed. The DDA intends to hold the properties only short-term — staff cited a 12–18 month horizon to package and market them — and to solicit community input and developer proposals through RFPs and design visioning (staff mentioned outreach, an Urban Land Institute panel and coordination with Community Planning & Development).

Financing and operations: If the DDA closes, the DDA (not the general fund) would own the asset. Staff said they plan to retain on-site operations staff familiar with mechanical systems, execute required repairs and maintain tenants while pursuing a sale. Mosher also said the DDA may impose a payment-in-lieu-of-taxes arrangement so leases remain competitive but tenants continue contributing sales and property-equivalent revenues to public purposes.

Council reaction: Council members praised the approach to stabilize a critical 16th Street block and asked about appraisal, due diligence and community involvement. Mosher said the purchase price reflected the lender’s book value and that staff are conducting due diligence. Councilman Watson asked whether the bank would absorb the loss between the $85 million loan and the $37 million purchase price; staff confirmed the bank would take a loss on the loan. Council members sought assurance that the DDA would not hold the property long-term and asked staff to keep the council updated on leasing and disposition plans.

Council action: Councilman Hines moved, and Council Pro Tem Romero Campbell seconded, to advance the inclusion petition and project funding agreement for the pavilions to the full City Council. The committee indicated consent and the item will go to the council floor for ordinance consideration.

Next steps: Staff said a petition to include the Pavilions in the DDA boundary, related project funding agreements and purchase-and-sale documents will be filed with the council in the coming weeks, with a targeted closing and short-term hold strategy through December and marketing to potential buyers in 2026.