RESIDENTIAL TOWER RENDERING

A 25-story apartment building proposed for downtown Colorado Springs by The O’Neil Group would include 316 luxury apartments, a five-level, 405-space parking garage, numerous amenities and ground-floor retail space.

A developer's ambitious plan to construct a tallest-in-city-history, 25-story apartment building sparked debate Wednesday among members of a Colorado Springs redevelopment panel — likely foreshadowing similar community wrangling over the next several months as project backers seek government approvals and public support.

The Springs-based O'Neil Group this week proposed the project on the southwest portion of a downtown block bounded by Vermijo and Cascade avenues and Costilla and Sahwatch streets.

The high rise's 316 "luxury" apartments, as described by The O'Neil Group, along with a five-story parking garage and ground-floor retail space, would be part of a larger $270.1 million mixed-use project that would include an 11-story office building.

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The company, which developed the Catalyst Campus for Technology and Innovation business park on downtown's east edge, wants the city to declare the residential tower as an urban renewal site — removing it from an existing urban renewal district and creating a new one.

That designation would allow millions of dollars in future sales and property tax revenue generated by the project to be used to help pay for public improvements at the building's site. Creation of a new urban renewal district for the apartment building also would be more financially advantageous for The O'Neil Group's long-term financing for the project. 

The Colorado Springs Urban Renewal Authority on Wednesday got an early look at The O'Neil Group proposal; authority members authorized their executive director to explore hiring consultants who would determine if the apartment building would qualify as a redevelopment site under the state's urban renewal law, among other responsibilities.

The possible hiring of those consultants is expected to be discussed at the authority's meeting in November. 

The authority's decision was a preliminary step in a months-long process that could lead to an urban renewal designation, which the City Council ultimately would have to approve.

Still, the proposed apartment building generated pointed discussions and mixed reviews from Urban Renewal Authority members.

Some enthusiastically supported the project; they said it would add to downtown's successful run of new apartments, hotels and entertainment venues that have been developed in recent years and that are helping to create a so-called urban lifestyle in the area.

"It's a very blighted block," said authority member Maureen Juran. "I don't think there's a whole lot of controversy about that. I love these guys sitting at the Catalyst Campus. I love that name — catalyst. I think this is a catalyzing project and I love the urban feel, I love the foot traffic concept, I love the retail concept.

"Our goal to cure blight and promote economic development," she said. "We really couldn't ask for anything better. This is going to start a new urban trend in our urban center."

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John Olson, another authority member, said the 25-story apartment building would help meet a demand for downtown housing and would have a "ripple effect" to spur more development in the area.

But authority member Gary Feffer, a longtime commercial real estate broker who specializes in downtown properties, said The O'Neil Group presentation was "incomplete" — lacking details on how much rents would go for and how the apartment building would be financed over an aggressive timetable that calls for it to be completed in July 2024.

He questioned whether some public improvements identified by The O'Neil Group as eligible for funding with future tax dollars generated by the project — such as the installation of building facades — would truly benefit the public or only enhance the company.

Feffer also objected to an O'Neil Group explanation in its presentation that a lack of public funding for the residential tower might jeopardize the project, which he said appeared to lay potential blame at the feet of the Urban Renewal Authority.

In response to Feffer's questions and those of other authority members who wanted more information, O'Neil Group chief financial officer Patrick Stephens and economic development manager Alexander Armani-Munn said the company is prepared to provide additional project details going forward.

At the same time, City Councilman Tom Strand, another authority member, said he's been inundated with comments from outraged city residents who oppose the apartment building's 25-story height and fear it's another step toward turning Colorado Springs into Denver. 

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The project also does nothing to address the need for affordable housing, Strand said of comments he's received.

"This is a hot-button issue and it's kind of displacing all the email that I got on 2424 Garden of the Gods," Strand said, referring to a controversial apartment project at that location that the City Council rejected. "Now, they're focusing on downtown. ... I have not gotten one text, email or carrier pigeon saying that they love this. That's something everybody needs to know, including Kevin O'Neil."

O'Neil is the founder and CEO of The O'Neil Group, which also formerly owned defense contractor Braxton Science & Technology Group.

Despite concerns about the proposed building's height, the city's form-based code — which regulates downtown development and encourages projects with a more urban look and feel — has no limits on building heights in the area where the 25-story apartment tower has been proposed.

And though Feffer faulted a lack of information from The O'Neil Group, he defended the building's height. Downtown land is exorbitant, he said; an O'Neil Group partnership paid $7.25 million for its proposed apartment and office building sites.

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To recover land costs, Feffer said, all developers need higher densities, which result in high-rise projects.

"If we start telling them they can only do four stories, there's not going to be a project," Feffer said. "Because right now, land values are so sky high downtown, the only way you can justify paying those prices for the land is to get the densities that fit the value of the dirt you're buying.

"I understand people who've lived here since 1871, that have this vision of wide open spaces," he added. "Well, we're a city of 600-and-whatever thousand. We have the downtown. There are very other limited areas that you can build high or build up. And downtown traditionally, in every city, that is where you get densities. That's where you get height. ... The even remote suggestion that we would limit them because they want to be able to see Pikes Peak from their little one-story house and they also happen to live downtown, that's a tough one." 

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