A deliberate leisure district in Glendale has devolved right into a lawsuit.
The native developer behind a 10-acre Alamo Drafthouse-anchored venture says its contract to purchase a portion of the event web site from the enclave is canceled due to Glendale’s actions.
Central Road Capital, led by Rob Salazar, filed swimsuit in opposition to Glendale final Thursday, saying town surrounded by Denver breached the contract because it ready to switch 5 acres that might develop into a part of the deliberate 4 Mile District.
Central Road indicated it has suffered damages in extra of $20 million.
The venture, whose identify refers back to the close by 4 Mile Historic Park, is slated to be constructed on 10 acres alongside Virginia Avenue, south of a Goal and north of the Cherry Creek bike path. Plans name for varied retail and restaurant ideas and doubtlessly a lodge. However an Alamo Drafthouse that might be owned by Central Road is the one tenant that’s been introduced.
Central Road started infrastructure work for the venture, which incorporates underground utilities and a parking storage, final summer time. That work, financed by greater than $50 million in bonds by means of a metro district, continues regardless of the litigation.
“We don’t touch upon pending litigation,” Central Road President Isiah Salazar, who’s Rob’s son, stated in an e mail. “Nonetheless, however this authorized motion, development on the positioning associated to public enhancements akin to underground utilities and parking storage will proceed.”
However the lawsuit threatens the non-public growth slated to comply with.
Central Road owns solely a small portion of the event web site. The rest is owned by Glendale.
In 2021, the events struck a deal. Glendale agreed to promote the land to Central Road in two phases after “sure development and funding milestones” had been met, in keeping with final week’s lawsuit. Central Road was to pay simply $1 every time.
Central Road stated it has met the milestones that permit it to buy Section 1, which consists of 5 of Glendale’s 9 acres. Glendale “initially refused to acknowledge” that, in keeping with the agency, however later agreed to proceed with the sale.
The events agreed to shut on March 5, in keeping with a letter Rob Salazar despatched to Glendale final week. However shortly earlier than closing, Glendale recorded a “use covenant” in opposition to the Section 1 property.
That doc locations restrictions on the property. Amongst different issues, it mandates that Central Road construct no less than 90,000 sq. toes for sales-tax-generating customers.
Central Road had already agreed to do this — however throughout your complete 10-acre venture, not simply the Section 1 property.
In its lawsuit, the agency stated it’s not possible to develop the Section 1 property to adjust to the use covenant below the event plans Glendale already permitted. And it stated the doc additionally impacted its capacity to get financing.
“Previous to coming into right into a mortgage settlement for development on the Section 1 Property, Developer shall be required to make written representations to lenders that it’s in compliance with all encumbrances affecting the Section 1 Property,” the lawsuit reads.
Central Road stated it supplied alternate variations of the use covenant that “wouldn’t end in an encumbrance rendering title unmarketable” however was shot down. The doc was finally signed solely by Glendale Mayor Mike Dunafon and never by Central Road, regardless of together with wording stating the developer agrees to its contents.
The land switch by no means occurred. Salazar wrote in his March 13 letter, despatched the identical day the lawsuit was filed, that Central Road “elects to deal with the Contract as cancelled resulting from Vendor’s default.”
He stated the corporate’s damages embrace the $20 million honest market worth of the Section 1 property, $2.85 million it anticipated to be reimbursed for purchasing the one piece of land it does personal and $446,000 it anticipated to be reimbursed in reference to constructing a parking construction.
Attorneys Brandee Caswell and Hunter Ross of Davis Graham & Stubbs are representing Central Road.
In an announcement situation to BusinessDen by Metropolis Supervisor Chuck Line on Tuesday, Glendale stated it could “vigorously defend the lawsuit.”
“The developer’s lawsuit is a performative, frivolous try to leverage Glendale for a purpose solely recognized to the developer concerning a technical facet of a land use restriction required by a 2021 Growth Settlement between the events,” Glendale stated.
Glendale, with a inhabitants of 4,500, fashions itself as a small-government various to bureaucratic Denver. Dunafon, whose spouse owns Shotgun Willie’s strip membership, referred to as Glendale “the Vatican of liberty and Luxembourg of freedom” at final summer time’s groundbreaking ceremony for the 4 Mile District.
However Central Road’s lawsuit questions that. The agency stated Glendale officers claimed it was a “business-friendly metropolis” and “frowned upon governmental pink tape,” solely to topic Central Road “to 4 years of painstaking and dear planning and approval processes.”
Glendale has been trying to determine an leisure scorching spot for years. Builders and venture names have come and gone.
Earlier than Central Road, Dallas-based Lincoln Property Co. had signed on to construct a venture it referred to as Glendale 180. Glendale officers instructed Central Road that led to 2020 due to development delays associated to the pandemic, in keeping with the lawsuit.
Previous to Lincoln Property, Houston-based Wulfe & Co. was going to develop the venture. That agency backed out in 2016, telling JHB it and Glendale “couldn’t come to enterprise phrases on a growth settlement.”
Central Road’s 10-acre venture is far smaller than what town as soon as envisioned. Greater than a decade in the past, the hypothetical growth then generally known as Glendale Riverwalk was going to be 42 acres. However profitable lawsuits from homeowners of property that might have been swallowed up led it to be scaled down.
Editor’s observe: This story has been up to date with an announcement from the Metropolis of Glendale.
This story was initially printed on BusinessDen.
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