Boulder City Council will soon have the opportunity to kick off the redevelopment of Diagonal Plaza, the run-down mall on the southeast corner of 28th Street and Iris Avenue. With its numerous empty storefronts and acres of empty parking lots, the nearly 60-year-old square is an eyesore and one of the few dilapidated areas in the heart of Boulder.
Currently, there are plans for the October 5 council agenda to consider a special ordinance that would allow part of the run-down Diagonal Plaza shopping mall on the southeast corner of 28th Street and Iris Avenue to be converted into a mixed-use commercial and residential buildings to convert district with community park.
A special ordinance would be an unusual step to move a redevelopment project forward. That it is even considered reflects the long history of Diagonal Plaza’s demise, its confusing clutter of owners, and the desire of city officials to improve the site after years of failed attempts.
“This is a very strange, unusual fact that we don’t see often,” said Elaine McLaughlin, senior planner for the City of Boulder. “Both the planning committee and the city council wanted this to be resolved because [the site] is essentially a really large parking lot that has not been used for years. “
The application
If the council approves the special ordinance on October 5, the way would be clear for the redesign of the western part of Diagonal Plaza and the surrounding parking lots into a mixed-use community with 291 residential units and around 27,000 square meters of commercial space. 73 of the residential units would be affordable over the long term. The rest would be workers’ housing. The buildings would be divided into one to four stories, with retail space on the ground floor facing 28th Street and residential units above.
The project is a partnership between Boulder Housing Partners, who operate the affordable Diagonal Court housing development just south of the property, Trammell Crow Co. and Coburn Partners.
None of the few remaining stores in Diagonal Plaza would be displaced by the project. The only occupied space in the western part of the mall is a Walgreens. The staff and pharmacy will be relocated to the Walgreens location on 28th Street and Valmont Road, just a few blocks south of the square. Most of the area that would be demolished is an abandoned former sports authority. And most of the redevelopment would take place not in the footprints of demolished buildings, but in the endless parking lots of Diagonal Plaza to the north, west and south of the mall.
The project would also add new streets to the city and a new multipurpose path through the square. These would not only facilitate access to the new building, but also increase mobility for the residents of the existing Diagonal Court housing estate, which currently has no protected access to a car, bike or walk to a city street or nearby shops.
The preliminary schedule for the project is that building permits will be obtained by the end of 2022.
How did we get here?
If the project is successful, it will be the culmination of years of efforts by the city administration to revitalize the square.
“It was spoiled for a long time,” said McLaughlin.
Built in the 1960s, Diagonal Plaza has been a cumbersome mall for some time. It had already stalled in the late 2000s and in 2010 prompted the city council to authorize a technical body to consider revitalization options.
At the time, the councilors were divided as to what to do with the room. At the 2010 meeting to authorize the technical panel, some council members raised that a big store like Lowe’s or Walmart could revive Diagonal Plaza. Others suggested department stores like Kohl’s or JCPenney. One idea was to convert the entire mall into a Costco.
In the more than ten years since then, numerous retailers have wandered through Diagonal Plaza, none of them stuck. In short and controversial, there was Boulder’s only Walmart, a neighborhood market. Sports Authority, Albertsons, Ross, and PetSmart also opened and closed locations in the mall. Currently, the only non-vacant big box space in the space is occupied by a 24-hour gym.
As tenant after tenant came and went, Diagonal Plaza provided the city with less and less tax revenue, and the mall’s physical infrastructure deteriorated. The parking lots also became camps for homeless people who made a living from their cars.
The developer Coburn Partners, who could not be reached for a statement, put it in a written statement to the urban planning committee:
“The Diagonal Plaza area has been a derelict shopping mall for decades, and the community has wanted a change there for many years,” the statement said. “The property theme is completely paved, there are numerous problems with rainwater and supply lines in the area, the site has long-term vacancies and a high tenant turnover, and large parts of the property are dilapidated.”
The challenges of redesigning the Diagonal Plaza
If the site is dilapidated and empty and the city administration wants to renovate it, why has nothing happened yet? The answer lies in the confusing ownership structure and restrictive zoning of Diagonal Plaza.
Data from the Boulder County Assessor, Colorado Secretary of State, Boulder County Clerk and Recorders, and county’s property tax records indicate 15 different owners of different parts of the mall, in some cases with multiple parties sharing the same property. Any large-scale redevelopment of the eastern parts of the mall would require an agreement between parties with different interests.
Boulder developer Stephen Tebo, who owns the vacant building in the northwest corner of the mall parking lot, said he’d rather see more commercial than residential in a Diagonal Plaza redevelopment, but that “whatever happens will be an improvement on that what we do “have.”
The building that Tebo owns on the site used to be a Mexican restaurant with 3 margaritas. He said he was working with potential tenants and should fill the spaces over the next few months, and he was working with developers and city officials to ensure the redevelopment continues to provide reasonable access to his building.
In addition to the 2010 technical panel, city officials have taken numerous shots in the past to revitalize the mall, none of which have resulted in success. In 2011, the city council conducted a study that if the city had found the place officially tainted, it would have allowed the city to condemn it through a significant domain. However, the council voted not to approve this Blight study.
In 2018, the area was added to an Opportunity Zone, a program set up under the Tax Cuts and Jobs Act of 2017 that allows investors to realize certain tax incentives when they invest their money in projects in economically troubled neighborhoods. But that did not drive the renovation efforts forward either.
Zoning has also proven to be an obstacle. Diagonal Plaza is zoned Business Community 1, a label that has strict open space requirements if mixed-use areas are built there. The current building regulations provide for the construction of only 56 new residential units on the site, far removed from the 291 that are planned in the redevelopment proposal. Boulder has also historically been reluctant to reallocate individual lots or change zoning rules if the zoning or rules are still consistent with the city’s area and comprehensive plans, McLaughlin said. That said, these weren’t realistic options for the refurbishment project.
“While there was interest in redesigning the site, the question was, ‘How can we manifest something here without reallocating or changing the zoning rules?'” Said McLaughlin.
For this reason the Council will examine the special regulation on October 5th. The ordinance would change the standards for land use regulations for the portion of the property being redeveloped so that developers and city officials can move forward without changing the zoning.
What does the future hold in store?
When the ordinance is adopted, the development plans have a provisional timetable, so that the project will be presented to the planning committee in January 2022, the technical documents submitted in March and the building permit applications submitted by the end of the year.
For the rest of Diagonal Plaza, another project has been submitted to convert approximately 37,000 square feet of the eastern part of the mall into an animal hospital. If successful, few renters would go beyond 24 Hour Fitness and the Colorado Driver’s License Office.
It is unlikely that the city would again consider a significant area as a mechanism to encourage further redevelopment, McLaughlin said.
“The city is probably not able to do that,†she said.
Instead, there is hope that the redevelopment efforts of Diagonal Plaza will trigger further projects and stimulate the numerous other property owners to redevelop their own.
“How can we make a difference when nothing has happened and it has been so difficult to make things happen?” Said McLaughlin. “We hope this is a way to encourage other property owners.”
