The nonprofit Historic Denver is seeking to force preservation of a former power plant in central Denver as owner Xcel Energy’s one-month window for potential buyers to step forward apparently draws to a close.
But at least one offer was submitted during that window for the Zuni Steam Plant, which operated for more than a century at 1349 Zuni St.
Danny Newman, the Denver tech entrepreneur with a passion for unusual real estate, told BusinessDen that he submitted a $1 million offer for the property March 20 with the goal of saving the structure from the wrecking ball.
The hope, he said, was in part to learn what Xcel knows about how much environmental remediation will need to be done at the site and whether Xcel might be willing to contribute funds toward that work.
“That’s what’s unclear to everybody at this point,” said Newman, who requested 180 days of due diligence.
But the offer was declined, according to Newman. He said Xcel is asking $7.5 million — marketing materials don’t include a dollar figure — and the company’s broker, Tyler Reed of Stream Realty, described that price as “hard and fast.”
Reed declined to comment, and Xcel didn’t respond to questions.
Newman’s holdings include the top of Denver’s downtown clocktower, the city’s longest continually operating bar, and multiple churches. He said he doesn’t believe Xcel genuinely wants to make a deal.
“I definitely think they are not trying and don’t want to sell it,” he said. “It sounds like they just want to tear it down.”
Developer, Snooze co-founder previously made effort
The coal-fired Zuni power plant was completed in 1901, added on to through 1955 and modified to allow for use of natural gas in 1980, according to Historic Denver. It provided the Denver area with electricity until 2015 and steam heat until 2019.
In 2021, Xcel received approval from the Colorado Public Utilities Commission to demolish the structure.
By that time, however, other parties were envisioning a new use for the building.
Just to the north, developer Susan Powers of Urban Ventures had refashioned an old industrial building into a modern office building. She named it Steam on the Platte, a reference to the nearby plant.
“We have been staring at that for a long time thinking what that could be,” she said.
Powers said this week that she, Snooze co-founder Adam Schlegel and Ismael Guerrero, at the time the executive director of the Denver Housing Authority, envisioned the building becoming part of a new-age Denargo Market, which operated decades ago in what is now RiNo.
“It was a place where farmers came and they sold wholesale, and that’s what we were trying to create here,” she said, envisioning school systems and restaurateurs as customers.
The trio went so far as to form a nonprofit, get a grant from the Gates Family Foundation and hire an architect that worked on REI’s Denver flagship store, which was fashioned from a onetime power facility for Denver’s streetcar grid. They signed a nondisclosure agreement with Xcel.
“They showed us some documents but not as much as we needed,” she said.
The group tried and failed to find environmental records at the state level, Powers said. The effort petered out. She, too, thinks Xcel doesn’t want to sell.
“I think they really want to tear down the issue and hold the property and not deal with the environmental issues on it,” she said.
Denver was given first chance to buy site
In 2021, with demolition approved, Historic Denver and the Denver City Council got involved. Historic Denver said it asked Xcel that July to explore adaptive reuse and take demolition off the table. Ten council members wrote to Xcel that November with a similar message.
In a May 2023 letter, a city official summarized a deadlock that had been reached in talks.
“We understand that Xcel has expressed its unwillingness, for reputational and other reasons, to divest the Zuni property to any party other than the City, as contemplated by the existing franchise agreement between the two parties. The City, in turn, is unwilling to take title to the property in its current, un-remediated state,” wrote Laura Aldrete, then head of Denver’s Community Planning and Development Department.
Xcel ultimately gave Denver the first chance to buy the property, known as a right of first refusal. The city declined to exercise those rights. So, on Feb. 25 of this year, Xcel said in a letter that it would put the power plant property up for sale to the general public for 30 days.
Thirty days from Feb. 25 was March 27. Historic Denver and the City Council separately requested that the public-offer window be extended to 180 days, but Xcel has not communicated that it will be.
Marketing materials for the property tout its “prime central location” whose “flexible zoning can accommodate a number of uses.”
Landmark status would prevent demolition
Last week, leaders of Historic Denver and two neighborhood groups submitted an application asking Denver to designate the structure a city landmark. That status, which would have to be approved by the City Council, would effectively prevent demolition.
Historic Denver CEO John Deffenbaugh compared the building to the REI building at 1416 Platte St.
“The REI flagship store is a hugely successful example of adaptively reusing an industrial building – indeed, one that powered Denver’s early streetcar network. If all parties come together to figure out an approach for retaining and transferring Zuni to the private sector, this could be done again,” he said in a statement.
Jeanne Granville of the Sun Valley Community Coalition said the building “represents not only the city’s industrial rise but also its complex legacy of environmental justice.” Sun Valley has long been a poor neighborhood, a mix of industrial and residential. Much of its housing now is owned by the Denver Housing Authority.
“Other power plants have been dismantled, but this site endures, offering a rare opportunity to acknowledge both the achievements and long-term impacts of industrial development on historically underserved communities,” Granville said in a statement.
David Griggs, a board member of the La Alma Lincoln Park Neighborhood Association, was the third to sign the application.
Newman, for his part, envisioned the building becoming a community market of sorts, somewhat similar to Powers’ proposal. But he also said he had a preliminary discussion with Denver Center for the Performing Arts’ Off Center, which has been looking for a permanent home, and thought it could be a spot for startups or quantum computing.
He said that he was open to negotiation on his offer for the former power plant, and that he has a group of investors willing to come in.
“I still want to do a deal with you guys,” he said, addressing Xcel.
Story via BusinessDen.
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