The City of Denver inched closer to converting the former offices of The Denver Post into a courthouse with a pending deal to buy the 11-story building from Kayan for $88.5 million.
The City Council approved a purchase agreement with the Brighton-based affiliate of American Properties, based in New York, to acquire the 306,000-square-foot office building at 101 West Colfax Avenue, the Denver Post reported.
If the agreement is given final approval by the council, it works out to $289 per square foot.
The former Denver Post building at Colfax and Broadway was built in 2006 as a joint headquarters for The Post and the Rocky Mountain News, which closed in 2009.
Before its completion, Kayan bought the white, curving building with green tinted windows for $93.4 million, or $305 per square foot.
The owner of The Post, New York-based Alden Global Capital, has five years remaining on a master lease. In 2018, it moved the newsroom and other operations to the firm’s printing plant in Adams County.
Alden rents offices to several subtenants, including the city, which has a $44 million sublease through 2029.
Denver, which projects it needs another 280,000 square feet of space for the city and county courts by 2040, pegged the centrally located building as ideal. Since city agencies already sublease offices, it’s tied into the city’s computer network. It has a parking garage for 635 cars.
City officials plan to issue certificates of participation, a form of debt financing that pledges city assets as collateral and doesn’t require voter approval, to cover the building purchase, according to the Post.
If the deal becomes final, then the rent the city now pays to Alden via DP Media Network would come back to the city and could be used to pay for the financing. Lisa Lumley, director of real estate for the city, projected the arrangement would be revenue-neutral for the city’s general fund through 2029, or even provide surplus money.
Lumley expects the financing arrangement to land in the council for approval next month. If the council approves the financing, “the intent would be that we would close on this (purchase) in the last week of March or the first week of April,” she said.
Opponents of the deal, led by Councilwoman Shontel Lewis, questioned if there were better deals to be found when Downtown office real estate is on the ropes.
But Lumley said many of the buildings facing financial hardship on the eastern side of Downtown were much older than the Post building. And if the city bought one of them, it would have to negotiate with multiple tenants.