Denver plans retroactive ban on gas station development

A Denver plan to constrict where developers can build gas stations could scuttle up to $50 million in pending projects.

A proposed city ordinance, slated to be heard Tuesday by the City Council, would bar new gas stations from being built within 300 feet of a “low-intensity residential district,” or within a quarter mile of another gas station, or a railroad station, the Denver Business Journal reported.

The move aims to direct land toward housing and other uses, especially along transit corridors. Sponsors of the ordinance say a glut of gas stations has taken up valuable land across the Mile High City.

If approved, the gas station prohibition would start Feb. 25 and apply retroactively to projects submitted for concept review after May 14 2024.

Its retroactive provision would impact seven projects — and raises private property concerns, according to Mike Quinlan, a director at NavPoint Real Estate Group.

Between the combined land purchase and building costs, they add up to $50 million that wouldn’t be invested in Denver projects if the ordinance is approved as written, he said.

“There’s tremendous uncertainty here, and if you invest here in Denver you may not be able to do what you want with your private property,” Quinlan told the Business Journal.

“It just sends a message that we change the rules at any time, and you may have spent your time and money for nothing — and now you’re kind of stuck with this property. I don’t think it’s the message we want to send as businesspeople in Denver.”

Kathie Barstnar, executive director of NAIOP Colorado, a commercial real estate development group, said applying the ordinance to project applications filed last year opens the door to lawsuits.

In addition, she said, its retroactive nature could set a precedent for a similar approach later.

“I would just be shocked if it would be allowed to stand unchallenged,” Barstnar told the newspaper. “That would have a chilling impact on commercial real estate, which is already semi-struggling in Colorado.”

Colorado’s commercial real estate contributed $14.8 billion to the GDP in 2023, according to studies cited by Barstnar. That fell to $6.7 billion last year and is expected to fall further this year.

“These are not viable parcels for affordable housing,” Quinlan told the Business Journal. “The idea that we’re going to ban gas stations and then somehow we’re going to all of a sudden have a bunch of affordable housing units appear on these parcels is not true.”

— Dana Bartholomew