Redevelopment is coming for a former industrial site in the Cole neighborhood of Denver after the City Council this week approved a tax incentive for the blighted area.
The former Denver Rock Drill Manufacturing Co. facility, a nearly 7-acre property about two miles northeast of downtown, was used to produce mining rock drills throughout much of the 20th century and has sat mostly vacant for more than a decade.
With the new approvals granted by the council on Monday, OliverBuchananGroup will build a mixed-use development there, with plans that include the preservation of some of the historic buildings. New zoning and city height incentives will allow buildings to rise as high as 22 stories on some parts of the site.
“We think this will be an anchor to the Cole neighborhood that they currently don’t have,” said Eric Buchanan, the CEO of OliverBuchananGroup. “The site has been closed to the public for 100 years, so just the fact that it’s a large site within Cole that will be open to the public and have great public amenities — I think everyone’s super excited.”
The development plan, which is projected to cost about $585 million, will include construction of retail space, housing units, a hotel, parking, office space and possibly a grocery store. Ten percent of the hundreds of housing units built must be set aside as affordable housing for low-income tenants, according to a development agreement with the city.
The group plans to demolish the buildings on the western side of the site for new construction. The developers will preserve a building with a sawtooth roofline on the east side of the property. The buildings on the land, many of which are more than 100 years old, are known for their intricate brick and glass work.
The developers’ plan is to begin construction in 2026, with the work taking two to three years.
The Rock Drill site is east of Franklin Street, north of the 39th Avenue greenway and south of 40th Avenue and the A-Line commuter rail tracks. It’s a little less than a half-mile walk from the 38th/Blake A-Line station.
The council agreed Monday to allow the project to use tax-increment financing, which is essentially a tax break. Tax-increment financing, or TIF, is a tool that cities sometimes use to incentivize development in areas that might otherwise be too expensive to build on. TIF allows the diversion of a portion of taxes tied to a property to help subsidize a project’s costs.
To get the tax break, the land must be considered “blighted,” which generally means it has some combination of factors that make it difficult to develop, such as polluted land, deteriorated structures, inadequate infrastructure or unsafe conditions. Those conditions must also be stifling development on the land.
The tax dollars can be used to remedy the expenses required to prepare the site for redevelopment.
After conducting a study in 2024, the Denver Urban Renewal Authority determined that the Rock Drill land is “blighted” because of its deteriorating structures, unsafe buildings and environmental contamination, among other factors.
Under the plan approved Monday, the city will return up to $39 million in property and sales taxes to the developers through tax-increment financing. Most of that will help rehabilitate historic buildings there. The tax dollars will also be used for environmental remediation and construction of utilities.
John Deffenbaugh, the CEO of Historic Denver, said his group supported the use of TIF for the project.
“I could talk all night about the benefits of building preservation … but that is only deliverable if the economics of preservation stack up,” he said during Monday’s meeting. “From the many previous attempts and failed attempts at redeveloping this site, it does feel to us (this) is very necessary to enable the preservation of this site.”
Since the project is part of a designated urban renewal area, the developers will have to meet certain requirements, like using a portion of their reimbursement for public art, considering low-income Denverites for job opportunities and using small businesses for nearly a quarter of their expenses.
The council also approved a rezoning of the land from industrial to mixed-use.
The creation of the urban renewal area, and the TIF eligibility, drew unanimous support among all the council members present Monday. Council President Amanda Sandoval and Councilwomen Stacie Gilmore and Serena Gonzales-Gutierrez were absent.
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