In RiNo, local developers’ efforts to land grocery store come up short

Andrew Feinstein wants to be clear that he “attacked this from every angle.”

“Everything we said we were going to do we endeavored to do,” he said.

But the CEO of EXDO Group Cos. said it became clear six to nine months ago that he and his fellow Denver-based partners, Elevation Development Group and Kentro Group, would be unable to build a grocery store topped by apartments on a block they own in RiNo.

“That’s when Trader Joe’s didn’t work,” he said.

Last week, Dallas-based developer Trammell Crow Residential submitted plans to Denver for a 300-unit apartment complex on the 3600 block of Downing Street. Feinstein confirmed he’s under contract to sell the 2.3-acre site. TCR’s development proposal shows just 4,500 square feet of retail space in the building, meaning there won’t be a large grocery tenant.

“They’re going to do a great job,” Feinstein said of TCR, which declined to comment. But he acknowledged he’s “profoundly disappointed.”

The efforts by the three firms to bring groceries and residences to the site date to before the pandemic. Feinstein’s firm had bought much of the land in the mid-2000s, before RiNo was a thing and before a commuter rail stop landed nearby.

Redevelopment over the past 15 years has brought thousands of residents to the neighborhood. But the only grocery store that followed was a Natural Grocers on Brighton Boulevard, where options are limited.

“The two things that come up the most are we need a grocery store and we need more affordable housing,” Feinstein told Denver City Council members in 2019.

EXDO and Elevation, led by the Farber brothers, previously worked together on The Hub office building. Kentro, led by the Balafas brothers, is a grocery store specialist currently building a new King Soopers just off Colorado Boulevard.

For a while, the expected grocer was Sprouts, Feinstein said. He thought he’d secured the necessary city approvals. But then, he said, Denver told him he needed to rezone a small portion of the redevelopment site — a short stretch of Lawrence Street he’d bought from the Colorado Department of Transportation.

That delayed things about nine months.

“We lost Sprouts on the other side of the rezoning. … If we didn’t go through that process, there would be a Sprouts there that you’d be shopping at,” he said.

Feinstein and his partners tried to secure a replacement, which wasn’t simple. Every chain has unique requirements and wants a different-sized space.

“Trader’s is small, Sprouts is medium, Amazon (Fresh) is large, Target is larger,” he said.

There were other factors. Parking for a project like that is a challenge, he said. And across the country, high interest rates and construction costs have slowed development in recent years. Feinstein said Denver’s recent Expanding Housing Affordability regulations, which require residential projects to incorporate income-restricted units or pay a large fee — thus increasing costs, from a developer’s perspective — hasn’t helped.

Trammell Crow Residential, the firm under contract to buy the site, has developed a host of apartment buildings along the Front Range. Its buildings generally have “Alexan” in their name.

Feinstein and his partners weren’t the only ones trying to bring a grocer to RiNo.

About a mile to the southeast, retail landlord Edens has for years talked of bringing a grocer to the city block across from the Denver Central Market food hall.

Plans there have changed as well. The grocery store was originally going to be part of a large-scale redevelopment, which would have demolished structures in the 2600 block of Larimer Street and replaced them with apartments and new retail units.