Lydian construction underway in Five Points.
The Lydian is a $40 million, 8-story mixed-use building.
It is being developed by Confluence Cos. and Palisade Partners
Construction is underway on The Lydian, an 8-story mixed-use development in downtown Denver’s historic Five Points neighborhood.
The $40 million Lydian, being developed by the Golden-based Confluence Cos. and Palisade Partners, will include 129 apartment units, 15,000 square feet of office space and 9,000 square feet of ground-floor retail space.
The development at East 26th Avenue and Welton Street, is scheduled to be completed in the fall of 2017.
Apartment units will range in size from about 700 square feet to about 1,200 square feet, said Tim Walsh, founder of Confluence Cos. He expects the 107 market-rate units to average about $2.00 per square foot in rent. In other words, rents would start at about $1,400 a month.
“They definitely will be a more affordable alternative to a lot of the new product being built in downtown and other nearby neighborhoods,” Walsh said.
He said while every apartment buildings hopes to attracts millennials, “I think we might not necessarily attract the millennial generation, but maybe people who are a little older. I would expect we might draw more young professionals in their 30s,” rather than those who recently graduated from college.
Twenty two of the units will be affordable. They are earmarked for those earning 60 percent of the area median income.
The city’s inclusionary housing ordinance requires for-sale communities of 30 or more units to provide that at least 10 percent of the unit be affordable for low- and middle-income buyers (Or, developers can pay a fee in lieu of providing the affordable units.)
However, both the Denver Urban Renewal Authority and the Denver Office of Economic Development wanted The Lydian to have some affordable units.
DURA provided tax increment financing for The Lydian and OED provided about a $500,000 loan.
FirstBank is providing about a $5 million loan on the Lydian that is based on the TIF, Walsh said.
The Lydian is being designed by Craine Architecture.
Crain’s design is an important component of the mostly brick building, Walsh said.
Even though the Lydian is being built on a former RTD parking lot, one of the most complicated pieces of the two-year process to get underway was getting approval from the Landmark Commission, he said.
“It was really important to make it blend in with the historic structures in the area and really pay tribute to the historic culture of the Five Points area,” Walsh said.
He noted that The Lydian is a block from the “historic Rossonian Hotel, in the heart of Five Points.”
Jazz greats such as Ella Fitzgerald, Louis Armstrong, Billy Holiday, Duke Ellington, Nat King Cole and Charlie Parker all stayed the Rossonian, during a time when African-Americans were allowed to play in front of white audiences, but were barred from staying at high-end hotels such as the Brown Palace.
The name Lydian is a tribute to Five Point’s jazz history.
“The Lydian is a jazz note, with a certain number of beats,” Walsh said.
The Lydian Chromatic Concept of Tonal Organization is an influential jazz music theory book written by George Russell in 1953.
The Lydian scale is much older, positively ancient, dating back to the Iron Age in Greece from 1200 to 546 B.C.
Walsh said the area is one of downtown Denver’s “most rapidly emerging and desirable places to live and work,” he said.
Unlike some other neighborhoods near downtown, he said the Five Points area isn’t overbuilt.
“I think The Lydian is going to be a catalyst to help revitalize Five Points and the entire Welton corridor,” Walsh said.
He said he expects that Confluence and Palisade Partners will deliver a “signature project for the entire community,” Walsh added.
Another big selling point of the The Lydian is that it be on the light rail stop at 26th and Welton. As a transit oriented development, residents will have easy access to the Denver International Airport. It also is a short hop to Union Station, where they can connect to any light rail stop.
“It’s a true TOD (transit oriented development),” Walsh said. “It is right on the light rail station. In addition, it is a great established, walkable neighborhood. There are a lot of great restaurants in that whole Five Points, Curtis Park, San Rafael area. And the really great thing is you can to all of the exciting things going on in RiNo.”
The building will include a two-story lobby with an open marketplace for shopping. There will be a pool and pool deck on the third floor. The third floor also will sport a fitness room and a conference room.
The apartments will range in size from studios to one and two bedrooms.
Ten penthouse units will also be available on the top two floors.
Early on in the process, Walsh said they considered building them as for-sale condos.
“But really, what we do are apartments,” Walsh said. “That is where our expertise and experience is.” Since 2010, Confluence has developed 21 rental communities in the Denver area. Together, they have more than 2,100 unit.
In addition to the Lydian, Confluence has five other projects planned or under development.
Condo construction defect litigation also played a role in deciding to develop rental units.
“I think construction defect is always an issue when it comes to building condos,” Walsh said. “Also, condo projects are harder to finance than rental projects. Typically, you have to pre-sell 50 percent of the condo units before you can get financing. In our case, that would mean selling 60 units. That is especially tough when you are targeting young buyers. Most buyers, especially young buyers, don’t want to put their earnest money down for something that won’t be delivered for two years.”
However, he said The Lyndian units will be condo-quality.
“The Lyndian will be a steel building with very high-end finishes,” Walsh said. “Frankly, I think many of the apartments being built today are of higher quality and are being constructed better than a lot of condos were in the past.”
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal