Down time for upscale housing
Two years ago, downtown Grand Junction seemed primed to make the transition from part-time tourist attraction and local hangout to full-time neighborhood with upscale housing.
Developer Shane Burton had completed his renovation of the Reed Building at Fourth and Main streets, creating a series of first-floor commercial units and second-floor residential spaces. He had turned his attention to converting a former strip club at Second Street and Colorado Avenue into a mixed-use project with upstairs views of Colorado National Monument.
Enstrom Candies President Doug Simons and developer Bruce Milyard had drawn up plans for a six-story development consisting of retail space, penthouse suites and two parking garages at Seventh and Main streets.
Then came the recession, dousing a scorching real-estate market. The consequences are now playing out downtown.
Simons and Milyard have put their property up for sale, a concession to the economic reality that could prolong a period of uncertainty at the east entrance to the Downtown Shopping Park.
The Reed Building has been a revolving door for commercial tenants. Only one of the four units at Two Rivers Condominiums, the former strip club, is occupied.
“I think everybody is just dealing with the cruel reality that the economy construction-wise ... is in the pits right now,” Burton said.
Simons and Milyard plunked down more than $1.1 million to buy several lots at Seventh and Main, including the former Dave’s Downtown Conoco. They excavated a series of underground fuel tanks and developed a blueprint for 700 Main St., a project that would have included first-floor retail space, office space and condos, all topped by luxury suites. The businessmen expected to invest $25 million to $30 million in the development.
“All of the above is exactly what isn’t happening right now,” Milyard said. “I think if we stay with the project, we’re going to have to retool and rethink it. Our decision was: Let’s throw it out there and see if someone has a better idea.”
The parcels are listed for $1.29 million. They’ve generated no inquiries thus far.
Simons and Milyard say they still would like to pursue a development at some point, whether it’s this one or a scaled-down version. Now, however, isn’t the time, given the difficulty in obtaining financing, a lack of available capital and the glut of high-end housing that has formed in the market.
“Our decision doesn’t damper our enthusiasm for downtown,” Milyard said. “We know if downtown is to increase in its vibrancy, there’s going to have to be more rooftops, more units. We were hoping to contribute to that, but in the future it may have to be a lower price point we try to hit.”
Burton understands Simons’ and Milyard’s decision. His projects are completed or nearing completion but still are waiting for the most important component: long-term occupants.
The Reed Building just gained a new tenant in Grand Valley Books but is about to lose Pinnacle Homes.
The space formerly occupied by 13 Photography has been vacant for a year and a half. A corner residential condo has been occupied by a renter about half the time since it was finished two-and-a-half years ago, but no one has purchased the unit, Burton said.
Burton gutted the old Cheers strip club catty-corner from Two Rivers Convention Center and converted it into an upscale, energy-efficient building with one commercial unit and three residential units. Only one unit — a condo — is occupied, and it’s being rented. Construction on a second condo is nearly complete. The third condo is just a shell, and Burton is in no hurry to finish it.
“Until the market comes up considerably, it just isn’t making any sense to come out of the ground with anything right now,” he said.