If it’s any consolation to motorists stuck in recent epic traffic jams in Cherry Creek, the neighborhood is paying it back to city coffers.
The tony commercial district collected $7.6 million in second-quarter sales taxes. That was a gain of 12.8 percent from the prior year, outpacing the city of Denver’s overall 11.1 percent increase.
Retail in Cherry Creek has been an up-and-down prospect over the past decade, but 2014 clearly is an up year. Developers are capitalizing on favorable market conditions with a building boom of new office, retail and residential space.
“The best is yet to come in Cherry Creek,” Mayor Michael Hancock said Friday at a meeting of the Cherry Creek Area Business Alliance. “What’s happening in Cherry Creek is really setting the pace for what we hope will happen throughout the city of Denver.”
Except for the traffic jams.
Building construction has tied up traffic sporadically. The mother of all jams, however, resulted from a 10-month-long project to replace a storm sewer along University Boulevard and Josephine Street.
The job is now finished, leaving shoppers and commuters free to return to an increasingly healthy commercial district.
Cherry Creek’s retail vacancy rate of 1.8 percent is the lowest ever recorded, according to Development Research Partners and CoStar Realty Information. Lease rates for shopping space now average $36 per square foot, nearly twice as much as the citywide average.
The building boom’s residential component is almost entirely apartments — a result of Colorado’s construction defects law that has limited development of condos.
“With one exception, all of the residential development in Cherry Creek is rental, albeit high-end rental. So, to the extent people are looking to own a condominium in a new development in Cherry Creek, their options are very limited,” said David Foster, a partner in the Cherry Creek law firm Foster Graham Milstein & Calisher and a board member of the Cherry Creek Area Business Alliance.
Tom Clark, CEO of the Metro Denver Economic Development Corp., said that throughout the Denver area, condos are now just 4.8 percent of all housing starts, compared with 25 percent in 2005.