It’s taken four years and three different ownership groups, but the Mining Exchange building and its neighbors, the Freedom Telegraph, Independence and Municipal Utilities buildings, are ready to be transformed into a 150-room “boutique” hotel and conference center.
That is, as long as the city leaders approve key sales tax-sharing provisions.
“I think the city likes what we’re doing — especially the sales tax we’ll generate. Eventually we could employ up to 400 people. Without their buy-in, I don’t know,” said Perry Sanders, co-owner of the property. “The alternative would be to turn it in to apartments, but then you’d lose all the new jobs and the (sales tax) revenue.”
Sanders said that he and partner Raphael Sassower have been working with the city’s economic development office on a tax-sharing agreement. The project also might qualify for Downtown Development Authority property tax sharing.
The sales tax-sharing proposal could be presented to City Council for approval before the end of the year and the hotel could open as early as next spring.
So far, stakeholders appear enthusiastic about the 157,000-square-foot renovation — even in the face of projects like Cooper Tower which never materialized.
Sanders said his vision is grounded in solid business potential, based on a market study completed by industry analysts at HVS.
“Not only can the downtown market handle the additional rooms, but upon completion and stabilization, the entire project is expected to represent a $30 million value,” the report said.
Vice Mayor Larry Small said he’s walked through the project and is, so far, impressed.
“This will be a huge benefit to downtown and to the city as a whole,” he said. “We’ll attract more tourists and conferences to our downtown. In the past, the city’s actually lost tourism business because we didn’t have many historic downtown structures. The Mining Exchange project has the potential to generate tremendous sales tax revenue, both directly through the hotel operation as well as revenue generated by surrounding merchants and restaurants. You don’t see many opportunities like that in today’s economy.”
While the property does not qualify as a “blighted area,” which would make it eligible for Colorado Springs Urban Renewal Authority tax incremental financing, CSURA spokesman Chuck Miller said he expects that once financing agreements are hammered out, the hotel will receive approval.
“We’re all for it, whether we’re directly involved or not,” he said. “It’s a great addition to downtown.”
Sanders, an entertainment lawyer with a home in Woodland Park and a Hollywood clientele, bought the three-building complex with partner John McSween during fall 2005, and assumed full ownership shortly thereafter. He then entered into a partnership with developer Ray Marshall on a portion of the property. During May, however, he purchased Marshall’s interest.
Five years ago, the Sanders-McSween partnership completed one of the city’s first historic condominium conversions, The Trestle Building.
“I have predominantly owned and rehabbed old buildings,” Sanders said. “My Louisiana law office was originally an old bus station. I did a … warehouse project in Los Angeles many years ago, but I’ve never done a real estate project of this magnitude.”
He said that in the process of “peeling away a century of renovation” at the Mining Exchange, the building revealed itself to be one of the “finest and most amazing I have ever seen.”
Sanders and Sassower have committed millions of dollars to the project, along with “a small amount” of bank financing. The two are now betting that, despite three years of wait-and-see, their vision for a hotel-restaurant-entertainment complex in the city’s center can be realized.
Old but new
Blue Spruce Contractors, the general contractor for the Mining Exchange project has left no stone unturned — marble, granite, tile or otherwise — during its initial work on the buildings near the southwest corner of Nevada and East Pikes Peak avenues.
While Sanders plans to save and refurbish the turn-of-the-century Mining Exchange building’s ironwork stair railings, multiple walk-in safes once used for gold and silver storage, its original floor tiles and massive granite and marble arched façade, he stopped short of pursuing national historic registry status.
“We want to preserve the distinctive architecture and highlight its glorious historic features,” said Bobby Hill of Bobby Hill Designs, “but we also want to create a modern, luxurious feel that appeals to today’s travelers.”
Hill is handling interior design and finishes for the project.
“They’ve brought the vision to life on paper,” Sanders said, adding that he also has hired photographer John Skiba to document each step of the renovation process.
Proposal for sharing sales tax revenue
The Mining Exchange Group is requesting that it be able to share in the additional sales tax revenue in the following way: 75 percent of city sales tax, or 1.5 percent to the MEG and $0.05 of the county sales tax for a total of 2 percent of the retail sales taxes going to the MEG until MEG has received $4 million. According to projections, this should occur within 10 years of operations beginning, or by 2020.
Project highlights and public benefits include:
1. Rehabilitation of a historic landmark in downtown Colorado Springs
2. Renovation of three buildings that were arguably a downtown fire hazard
3. Permanent employment for up to 400 in the downtown area
4. Increased sales tax on retail and hotel sales
5. Increased property tax
6. Increased use of the downtown parking garage for an extra 125 cars daily average
7. Increased downtown entertainment for mature adults: comedy club, dueling piano club and live music jazz venue
8. Beautification of downtown sidewalks and a large outdoor public pedestrian mall between the alley and Pikes Peak Avenue (between the Mining Exchange Building and the Independence Building). This mall will have public seating for any and all venues associated with the property as well as be open to the public to sit outside but covered
9. Total alley upgrade, including lighting, etc., from Nevada Avenue to the back of La Baguette. The alley will now have four new entrances into retail establishments. Starting from Nevada down the alley they will be 1) Spa 2) Jazz Club 3) Event center restaurant 4) Dueling piano/comedy club and alley restaurant bar open from lunch through dinner
10. The addition of a historically significant tourist attraction and the only downtown boutique hotel, to help service the hospitality industry and local businesses travel.
11. Public valet parking
12. Conversion to energy efficient building
13. Removal of a tremendous amount of asbestos from the buildings
14. Total expenditure on the project of at least $18 million, with all of that money going toward the overhaul of the three historic buildings for public use and benefit, the creation of permanent jobs, the revitalization of the South Nevada corridor and the creation of significant city and county revenue.
Source: Perry Sanders