Denver’s Sun Valley neighborhood will get $10.3 million in tax financing for new streets, other infrastructure

The Denver City Council on Monday approved a tax share-back agreement that will provide the Denver Housing Authority worth up to $10.3 million to pay for a new street grid and other infrastructure upgrades in the city’s changing Sun Valley neighborhood.

The tax increment financing arrangement is one of a handful of measures the council has signed off on in recent months regarding Sun Valley, one of the city’s poorest and most gentrification-vulnerable neighborhoods. Sun Valley is wedged between Federal Boulevard and the South Platte River, encompassing the Denver Broncos’ stadium on the north end and extending down to Sixth Avenue on the south.

In 2016, the U.S. Department of Housing and Urban Development granted the Denver Housing Authority $30 million to revitalize the area, including money to replace the outdated and deteriorating Sun Valley Homes government housing project there that was home to 333 apartments for low-income people and families.

The tax agreement approved Monday covers the area where the now-demolished Sun Valley Homes once stood and will pay for things like replacing the neighborhood’s circuitous streets with a more traditional grid better suited for dense housing, officials said.

“The assistance they are looking for is solely associated with delivering the infrastructure needed to redevelop this area as well as delivering several neighborhood amenities,” Denver Urban Renewal Authority development specialist Jeff Bader told the council’s finance committee in August when pushing for the tax agreement.

The urban renewal authority, or DURA, will be collecting the property taxes generated by new development on the currently vacant land and reimbursing the Denver Housing Authority for up to $10.3 million of eligible work. The tax increment agreement expires after 25 years if the reimbursements don’t hit that threshold first.

The development plan approved Monday calls for the creation of five new city blocks and a riverfront park on the far eastern side of the neighborhood along the river. Of the new blocks, the Denver Housing Authority will use two to build 514 units of income-restricted affordable housing. DHA will sell the other three to private developers expected to build another 744 market-rate housing units there, officials said.

The sales of those three blocks are expected to bring in $22.6 million, another 47% of the needed budget to complete the redevelopment plan, according to Bader’s presentation.

“This plan has been a long time coming,” Jeanne Granville, president of the Sun Valley Community Coalition, said at Monday’s meeting. Her organization voted to support the development plan and tax share. She praised the health and social benefits the new park and mobility upgrades will bring.

“We look forward to supporting DHA as it enters this next phase of the redevelopment,” Granville said.

City Councilwoman Candi CdeBaca voted against the redevelopment proposal and a corresponding cooperation agreement between the city and the Denver Urban Renewal Authority. She has previously spoken out against using tax increment financing to fund development and this project was no different. She was the lone no vote on both measures.

David Roybal, who grew up in Sun Valley and is running against City Council President Jamie Torres to represent the area in the city’s District 3, slammed the plans. He holds DHA responsible for the much-maligned Sun Valley Homes project and sees the redevelopment as a means to displace people from the neighborhood.

“This ain’t for the people,” Roybal said. “We need to buy our own land and do our own redevelopment.”

Creating the 35-acre urban redevelopment area required declaring the area blighted, a finding supported by an independent study in 2020, Bader said. The area met six federal definitions for blight including having a defective or inadequate street layout and unsanitary and unsafe conditions, according to his presentation.

The tax increment area does not cover all 35 acres there. A northern portion, a collection of defunct industrial properties located between 11th and 13th avenues, Bryant Street and the South Platte, was left out. DHA and the city own all the land there but the housing authority doesn’t have firm development plans for the land yet and did not want to start the clock on the 25-year tax window yet. That area may be added later, Bader said.

“It is very fulfilling to finally be at this point, especially because it is to address the infrastructure,” Denver Housing Authority chief real estate investment officer Erin Clark said after the vote. “That’s a big word but what we mean is better roads, better sidewalks, areas for people’s pets and for their kids. It’s what makes a place a real home.”