Denver: Mile High City rises another story every day
On most Sundays Denver looks from the air as if some Air Force student pilots got a little careless with a bomb or two. Gaping craters gouge the city's face, and skeletal remains of buildings poke forlornly at the sky.
Monday is a different story. The craters bustle with swarms of hard-hatted workers, and the skeletons display themselves for what they are: beginnings, not endings, of office buildings.
A number of elements symbolize Denver's fast-paced economy, but none so vividly as the city's building boom. This city has been called the nesting place of 40-story cranes.
Between two and three dozen new office buildings are either under construction or on the drawing boards.
Construction companies use whatever new techniques they can to put up their concrete and steel structure as quickly as possible.
Energy Center Four, which will be the city's tallest building, is lurching skyward at the rate of one story a day. The builder, Al Cohen Construction Co., brought in a sophisticated and expensive concrete-pouring technique to finish the 56-story central elevator core in record time.
The extra expense pays for itself, says John McGann, the firm's building superintendent, because it speeds completion of the building, getting tenants--and their rent money--in faster.
And there are bundles of tenants. Most of those block-consuming holes and bony construction frames in downtown Denver are already leased or rented out, though they are up to three years away from completion.
Projects not completely leased already--some 15 percent of the office space under construction--are that way on purpose; the developer thinks he will be able to command higher rents on completion of the building.
As it is, Denver boasts some of the highest commercial rents in the country. Downtown office space brings about $25 a square foot a year, compared with about Chicago, says Robert J. H. Sanderman, president of Oxford-AnsCo Development Co., the US subsidiary of a Canadian developer with several downtown projects currently under way.
''There is no Class A office space available for rent in downtown Denver'' at any price, says Terry Fiske, managing partner for the Denver office of Kirkland & Ellis, one of the many law firms moving into town.
Mr. Fiske has turned his firm into one of the fastest-growing law firms in Denver--all in sublet office space. He could afford any new office space in town , but there just isn't any to be had, at least not for two years.
So Kirkland & Ellis is subleasing a floor of the Dome Tower, owned by Canada's Dome Petroleum, until Dome needs the space.
Then Fiske will move his lawyers across town to two floors of a tower scheduled for completion in 1983. He employs 17 staff attorneys and says he might have twice that by year's end. Since all the offices are full, ''We'll just have to double up,''he says.
His is a common plight here. The vacancy rate is one-tenth of 1 percent, according to a recent survey by Coldwell, Banker & Co., a real estate firm.
Denver now has 32.7 million square feet of office space, a 76 percent increase over five years ago, according to the Chamber of Commerce. Some 20 million square feet of additional space is planned or under construction. Denver city and county officials issued 330 percent more nonresidential construction permits in 1981 than in 1980.
By any account, the growth is phenomenal. Reason for it all: Denver's proximity to the Overthrust Belt that runs through the Rockies and is considered the most promising oil and gas territory in the country. Denver is becoming one of the nation's top energy centers.
According to state officials, about 700 energy and energy-related companies have staked claims in downtown office buildings. Another 1,200 of these companies occupy space in the seven-county region that comprises metropolitan Denver. Mr. McGann of Cohen Construction says the city is, with Houston and Dallas, one of only three hot construction markets in the country.
Energy dominates this city in both style and finance. Cowboy boots and Gucci loafers are seen on the streets, and accents in the air range from a Texas drawl to French Canadian.
After the Texans, the most dominant outside presence in Denver is the Canadians. There are Canadian energy companies like Dome Petroleum and many Canadian development companies. Of the some $2 billion in construction projects currently underway downtown, Canadians own at least half. The Canadian developers have a reputation for paying top dollar.
All the big Canadian development companies are in Denver, and they are here, says Mr. Sanderman of Oxford-AnsCo, because Denver has the ingredients for becoming another Calgary. That Canadian city, riding western Canada's energy boom, bounded from a drowsy town to become western Canada's energy center.''
Canadian developers pretty much ran out of development opportunities in Canada,'' says Mr. Sanderman. They looked due south from Calgary about six years ago and saw Denver, cradled in the arms of the Overthrust Belt and with land prices at $75 a square foot, and they haven't stopped coming.
The Canadians also saw considerably less regulation to hinder commercial development than they are used to at home. Many energy companies resent the Canadian government's effort to keep Canadian oil prices at roughly half the world level.
But the energy boom here benefits more than just the Canadians. As the fastest-growing industry in Colorado, energy companies employ 21,000 people in the state, up from 8,000 in 1977, according to Chamber of Commerce estimates. Another 20,000 jobs are attributed to businesses that support energy. Not unexpectedly, energy has also fired more than a few personal fortunes.
Denver's best-known oil man is Marvin Davis, who started his career as a wildcatter, drilling exploration wells on a shoestring. He has since gone on to bigger things. Last year, for example, he bought Twentieth Century-Fox Film Corporation for about $700 million.In January he was one-third of a partnership that pulled what may be the biggest real estate transaction in US history, selling controlling interest in a four-block group of buildings in downtown Denver for over $500 million to the Prudential Insurance Company of America.
Denver something the great majority of cities can only wish for: growth. Compared to the mid-1970s, the city has gone limp, but compared to the rest of the country, Denver is still a boomtown.
In 1972 and then again in 1976-78, business growth here reached roughly 6 percent annually in terms of employment increases.
Projections from Lucy Black Creighton, chief economist for the First National Bancorporation, one of the state's largest bank-holding corporations, call for a 2.5 percent employment growth for the state in 1982. The forecast would spark fireworks in Michigan, but prompts disappointment here.