Denver Water may not need land near Burnham Yard under deal with Broncos

Under a deal reached with the Denver Broncos, Denver Water may feel less pressure to acquire the nearly two dozen parcels the utility was pursuing near its campus in the Lincoln Park neighborhood.

Denver Water has agreed to sell 25 acres of its 36-acre campus, giving the Broncos a key block of land they need to build a new stadium and mixed-use entertainment district at Burnham Yard, a former Union Pacific railyard the state owns. And the team, in return, has agreed to help pay for new land to replace what the utility is losing, as well as all relocation expenses.

“While this is not something we sought, Denver Water understands the significance of this opportunity for the city of Denver and the economic importance for the larger community we serve,” explained Denver Water CEO and Manager Alan Salazar in a news release on Tuesday.

Salazar said Denver Water worked with the Broncos so they could pursue their preferred location in Denver “without compromising our critical mission or jeopardizing our financial or operational needs.” That includes making sure ratepayers wouldn’t finance or subsidize the stadium in any way.

The Denver Broncos have agreed to provide Denver Water with three parcels to place the parts of its campus that housed its operations and maintenance, distribution, trades, fleet, meter shop, warehouse and a health clinic. Denver Water will retain the northern part of its campus, the site of its Administration Building, which was built in 2019 and houses about half of its 1,200 employees.

The largest property the Broncos have offered up is at 40th Avenue and Clayton Street near the Bruce Randolph School, Denver Water said without providing an address. The most likely candidate, given its size and availability, appears to be 2577 E. 40th Ave., a 15-acre parcel once home to a large facility that AT&T used for storage, a call center and corporate operations until selling it in 2018.

There are also two smaller properties, one near the current stadium and the other directly north of Denver Water’s current complex.

In April and May, Denver Water sent out “Notice of Intent to Acquire” letters to owners of 23 parcels along the 1200 and 1300 blocks of Umatilla Street, as well as along 12th Place and 13th Avenue near its campus. The area consists primarily of industrial warehouses, some commercial buildings and a few vacant lots.

Although the offer to buy was voluntary, such letters are usually the first step in exercising eminent domain, a power governments have to secure private land for public use, and which was deployed in building Coors Field.

Charlotte Elich, owner of three stores called 5 Green Boxes, didn’t know what to think when she got a letter stating that Denver Water was interested in her 6,500-square-foot warehouse at 1965 W. 12th Place.

“There was lots of conversation. Like, are we sitting on a big water main, a big water pipe?” Elich asked.

Over time, it became clearer that the warehouse she owned with her sister since 2017 was caught up in a bigger flurry of land sales and swaps being undertaken so the Broncos could relocate their stadium, something the team confirmed on Tuesday.

“I don’t want to be displaced,” Elich said. “My sister’s elated. I’m not elated one milli-bit.”

Tuesday’s announcement, however, suggests that Denver Water may no longer need the parcels, or at the very least won’t resort to using its powers of eminent domain to acquire them.

Going that route could have resulted in an uphill legal battle, some lawyers suggested, given Colorado’s tough stance on condemning land to benefit a private party or for purely economic development purposes. And putting heavy utility operations into a bustling sports and entertainment district probably wasn’t going to be practical.

Denver Water’s board of directors in August approved the purchase of one 0.44-acre parcel to the north of the campus at 1801 W. 13th Ave for $2 million. But it appears to be moving at a sluggish pace on the other 22 parcels.

“Regarding the letters of interest that we sent out, we don’t have any new information on those parcels as we continue to assess our property needs,” said Travis Thompson, communications manager for Denver Water.

Now that Denver Water has other alternatives, it is probably less motivated to acquire land in the surrounding neighborhood, suggested Adam Foster, an attorney who represents the owners of 1245 Umatilla St., one of the properties that received a letter of interest.

The building’s owners obtained an independent appraisal, which Denver Water paid for, and submitted it by the July deadline. But it has been crickets since, which indicates a lack of urgency, he said.

“They haven’t checked back in — at least with regard to our group. There is cheaper land that serves their purposes well enough,” he said.

Denver Water and the Broncos will hold talks to discuss relocation costs over the next few months, the utility said.

Although Denver Water may be reviewing its options, ratepayers, for one, aren’t likely to support “land banking,” or grabbing parcels just to hold onto them, especially if the Broncos are agreeing to provide land elsewhere. Foster suspects that Denver Water might have been overtaken by events, specifically the premiums the team was willing to pay.

Starting in August 2024 and through earlier this year, a group of limited liability companies affiliated with the Broncos’ Walton-Penner Family Ownership Group purchased 10 parcels near Burnham Yard, according to a story first reported in BusinessDen.

They paid prices significantly above the market rate at the time. Elich said her appraisal came in at three times what Denver Water was willing to pay — something owners in the area describe as the “Broncos premium.”