October 20, 2026 · 14,779 words · 11 speakers · 220 segments
Capital Development Committee will come to order. Ms. Forbes, please call the roll.
Senators and Representatives. Henriksen.
Excuse. Johnson here you're muted can you hear me now here
Representative Johnson I'm here can you hear me there we go tomorrow here here here madam vice chair here and mr. chair here members we do have a full agenda today first one that we have up as a consideration of recommendation from the capital from the CDC regarding Colorado 150 tapestry we
We have Deanne Gertner with us, Castle Searcy, and Anita Wesley.
Who would like to start us off?
Hello.
Hi.
I'm Deanne Gertner. I'm with Hey Hue Art Consultants, and we'll be presenting the Colorado 150 tapestry project today. I'll just let everyone else introduce themselves quickly.
I think it should be on. Try it. I'm Council Searcy with Hayhew Art Consultants.
Anita Wesley with Stern Family Foundation.
Perfect. And just let the record reflect that Senator Henderson has joined us. Who would like to start us off?
Sorry, I can, Deanne.
Okay, so the Colorado 150 Tapestry Project is being funded by the Sturm Family Foundation. They're a private family foundation here in Denver. And they wanted to do this to celebrate Colorado's 150th anniversary of statehood and create a meaningful on-ramp for the people to engage with Colorado's history over our 150 years of statehood. you're probably all familiar with the women's gold tapestry on the level one on the north entrance and this can be seen as a companion piece to that should it be accepted as a donated piece of artwork we would be installing it on the other side of the rotunda so as you go into the north entrance The women's gold would be on the left, and the new tapestry would be on the right. So it would be flanking that entrance to the rotunda. So we –
Ms. Wesley.
We – what's that? Oh, we just have to –
Mrs. Searcy.
Oh, Ms. Searcy, I'm sorry.
Yes, Castle Searcy. So we kicked off the project on Colorado Day here at the state capitol on August 1st with our series of community dye events We actually had swatches of fabric that the community could participate in dyeing and then those are now being used in the tapestry by the artists that we selected. Here's some images from that event. Yes, we had several state legislature, legislators be able to join and participate in the dyeing. And also write what they love about Colorado, favorite places in Colorado, and they got to dye a bandana to take home as well.
Our project timeline, we started this project way back in March, but we used May through July to finalize the design, select the artist, and also have a review of the depictions of indigenous peoples by the Denver Art Museum curator of Native Arts, John Lukovic. In August, like Castle said, we had our community dye events. We're now in the fabrication phase of the project, so the tapestry is well underway, being hand-applicated and hand-embroidered by a Fort Collins-based artist who we'll talk about in a moment. We plan to have the framing and display fabricated in February. The tapestry, before it gets installed permanently at the Capitol, would go on a touring exhibition throughout the state, covering each of the eight regions that the Colorado Tourism has identified as those major regions of the state. We have a map showing where those will be later on. And then ideally, we will have a full circle moment by installing and dedicating the piece at Colorado Day 2027 to permanently install this tapestry here at the Capitol should it be accepted for donation. Here's our artist, Elnaz Javani, Assistant Professor of Fiber Arts at Colorado State University where we also did a community dye event. well she has an MFA from the school of the art institute of Chicago and she's a nationally and internationally recognized fiber artists she's had numerous exhibitions throughout the world so we can now give you a sneak peek of a rendering of the tapestry this piece will be eight feet tall and five feet wide it will be framed and then installed on a freestanding display on wheels so it's easy to move we're not damaging any walls we'll show you the framing here in a second but the project themes are all about adaptation how different people are coming and going over time, how we're adapting to the land, how the land is changing in response to the people here. Belonging, community, lots of diversity. There is the long view of history. If you look at the piece from top to bottom, I'll have Castle kind of point things out. Top to bottom, it's going in like a timeline from the far distant past to more of the contemporary future or contemporary times and then looking forward into the future And so the statement is that Colorado is a place constantly formed by the people who arrive stay adapt and contribute across generations and continue to weave our evolving identity. It can be read, like I said, from left to right as a timeline and from top to bottom as a journey through our landscapes, histories, and people. We're not going to point out every single thing depicted, but I'll just call out a few things. There are seven different layers, and each one of these layers kind of represents an archetype of people. So the first one are the land keepers. It has indigenous communities, but then if you look over to the right side, it's more conservationists and foresters and people who are stewarding the land. Then it's the water keepers, people who are using water and conserving it in different ways, builders, makers, arrivers who are immigrants, refugees, migrants, caretakers, like teachers, organizers, families, and the dreamers, those people who are the scientists and our future generations kind of imagining Colorado's future. There are several landmarks that you can see, Mesa Verde, the Colorado Trail, the Eisenhower Tunnel, Red Rocks, the Strontia Dam, Drop City. So we try to have as much diversity as possible and depict each one of the different regions. Lots of different industries are depicted, from aerospace to agriculture, outdoor recreation to technology. and of course we have lots of iconic Colorado wildlife depicted as well. And here are some work in progress photos. You can see how the handwork of the embroidery and the applique is coming to life. It will be beautifully textured and incredibly colorful, very vibrant, and something we hope people will spend a lot of time looking at. Here is a scaled mock-up of what it will look like in the rotunda. It's 7 feet wide, 10 feet high with the framing structure. The art itself is 8 by 5. Yeah, and this will, like I said before, it'll be freestanding, so it's easy to move. We're not damaging the building in any way. Here's an example of what the frame will look like. It's the white oak to match the other wood in the Capitol. We're going to have museum-level framing, so the plexiglass will be anti-static, anti-reflective, filter UV. So hopefully this will be really protected, and there should be minimal maintenance as long as there's no wild climate fluctuations or any other unforeseen circumstances. And then as part of the donation, we're also gifting several narrative deliverables. which includes signage, a project catalog, a landing page that describes a project, printed brochures, educator and student materials, ideally a documentary video, an audio guide, and a PR toolkit. So it should be accessible to people of all ages and all types of learning methods and whether they have visual or auditory impairments. And so you know we try and match the signage that is throughout the rest of the capital for our art label We also want to include a QR code to the audio guide and the website so that it easy for people to access more information And this will ideally be on wheels as well. And so the Capitol Building Advisory Committee has accepted our donation, and we just need to know if there's any other questions or concerns or anything else that this committee might need in order to accept the donation.
Thank you for that. Does the committee have any questions? Representative Story.
Thank you, Mr. Chair. Can you lock down the wheels?
Yes, they will be.
Are those caster wheels? Is that what those are called? So they are not movable.
But we work with Amanda Clapham here at the Capitol, and everything will be designed to her specifications and needs. So it will be safe, secure, and easy for her to move if needed.
Senator Pelton.
Thank you, Mr. Chair. Was there any reason – I mean, I see a buffalo up there. I don't see an elk or a mule deer. I do see a wolf. Was there a reason why there was a wolf on there instead of having elk and mule deer and everything else? There should be deer.
I would have to go up closer to show you where the deer are, but they are depicted. The wolf is for the reintroduction of the gray wolf because that is a native species. So that was one of the decisions. I know there is a deer, but I cannot remember which section it's in.
Okay. Okay.
Any other questions? Representative Johnson.
Thank you. Can you hear me? Yes. Perfect. My question, just because I'm trying to catch up on the background of all of this, I don't recall any Eastern Plain events or Northeast where these events for the tapestries and stuff happened. Were there some out this way? Was it more Denver centric? How did you get different communities engaged? And what was the outreach to get these different community members to come and participate in the project?
So far to kick off the project, we've only done three community dye events to create the fabric we needed to get the piece started. Those were in Leadville and Fort Collins and here at the Capitol. But we do have a plan to travel the finished piece throughout the state and have community events tied to them. So on the eastern plains, ideally we're working with Sterling, the creative district of Sterling, to host an event. And ideally we'll have one to two weeks of the tapestry there, activate that with programming, get the community involved, ask the local creative district what types of programming work best for their community. So for example, we're working with Steamboat Springs and we'll likely do a workshop during their Art Fest in July and do an outdoor activation with an indoor display of the piece. And then in Trinidad, for example, example. We're hoping to do April and have more of an artist talk and a workshop because that works better there. So we're working as closely as possible with all the communities to make sure that we're doing things that their community wants and is excited about and makes sense for their local engagement. And we're working through Colorado Creative Industries to find those partners in those locations.
Perfect. Any further questions?
I will just say thank you for the work that you're doing. It's a really neat thing to see and really appreciate you all being here today.
Madam Vice Chair.
Thank you, Mr. Chair. I move that CDC approve the recommendation from the Capitol Building Advisory Committee concerning the Colorado 150 tapestry donation and placement.
That is a proper motion. Ms. Forbes, please call the roll.
Senators and Representatives, Henriksen.
Aye.
Johnson.
Yes.
Morrow.
Yes.
No.
Johnson.
No.
Yes.
And Mr. Chair.
Yes, and that passes 4-2. Thank you so much for being here.
Thank you so much. Thank you all. We're excited.
Next up, members, we have consideration of higher education cash requests from Colorado State University. Looks like we have Mr. Hanlon with us.
Good morning members of the Capital Development Committee. My name is Brendan Halen. I'm the Vice President for University Operations and Chief Financial Officer for Colorado State University. I'm here to request a two-year cash list amendment for our nursing and physical therapy project. I'm joined by Mike Singleton online. He is our Associate Vice President for Capital Planning and Jennifer Aberlene, who is our Associate Dean for Health and Human Sciences on campus. So the project is a $14.2 million project that is funded by $1.5 million of directed federal spending from the Department of HHS at the federal level, and $12.7 million in donor funding. We will be beginning, our plan is with approval of CDC to begin construction approximately a year from now. It is a renovation of the fourth floor of our medical and health center on the southeast section of our campus. It is a 26,800 gross square foot renovation of that facility and will allow us to implement a 3 plus 2, that's a Bachelor's of Science and Master's dual degree program for nursing in conjunction with our partners at CSU Pueblo and a new doctorate program in physical therapy Just to be clear on this slide this is not displacing the medical program that we are hosting on our campus with CU. This is just the fourth floor. They will remain occupying the balance of that facility, and then we've provided them with an alternative space for the use of that fourth floor. They will still have access to that space if they need it for their own clinical training, that fourth floor that we're renovating. So this slide just demonstrates where the facility is located. So that's the CSU Health and Medical Facility on campus. That's the south-east corner of campus. Sorry, my slides are not advancing. There. This diagram just shows the current floor condition. It is relatively low occupancy, low utilization. That's why we're able to find alternative space on campus for the CU Medical School that meets their needs. We've been doing so in consultation with CU. And then on the right-hand side is a diagram of the modifications that we're making. A lot of this is clinical specialized equipment. We are trying to minimize the number of walls that need to be moved and other kind of physical structures on the floor to minimize cost as much as we possibly can. But you could see a far more extensive use of that space for both the physical therapy and the nursing program. A reasonable question would be, why did we select these two programs? So we've been working with our partners in northern Colorado, and through conversations with them, there's a 13% shortage in registered nurses and a projected growth of open positions of approximately 8% between 2025 and 2030. So this is a need in northern Colorado, but I think it could be argued for the state as a whole. Our current RNs in Colorado, 39% of them are age 45 and older, meaning that they've hit the midpoint in their careers. So we're trying to think ahead and anticipate what future staffing shortages there might be in this profession. and postings in northern Colorado average 311 each month with only 178 of those positions being filled. So we think that this fills a workforce need in northern Colorado. We have had extensive engagement with the community and UC Health, Banner, Columbine Health Systems, Summit Care, Denver Children's Hospital, Pathways Hospice, and Larimer County Health and Environment have all sent in letters of support for this program to ensure that they've kind of put their voice on the need for this program in the region. For physical therapy, in the last 36 months, the number of job postings for the doctorate in physical therapy program graduates grew faster at any rate of any other doctoral-like program. And we are anticipating that in the next 10 years employment growth in physical therapy is projected to outpace all other occupations statewide as well as at the national level. And that will put more opportunities for jobs requiring a DPT in physical therapy as a critical element of our employment sector in northern Colorado and across the state. So, outcomes of the project, again, I, as the CFO, I have to say just make sure I restate this is almost entirely donor funded and federally funded So this is not using campus resources it using the resources of donors in the federal government we believe this is going to provide additional pathways to the medical profession it's going to increase enrollment that's really important when it comes to the demographic cliff that all institutions of higher education are facing so we are anticipating 120 new three plus tool dual degree nursing program students. That's at full enrollment. So that's after a three year period of time when the enrollment is full. 150 new DPT students at full enrollment. This will be a new state of the art clinical education space which will also be shared with the CU Medical Program. And then it will provide expansion of opportunities for clinical interprofessional education for nursing, physical therapy, and CU School of Medical Students, and it will maintain a strong and productive partnership with University of Colorado School of Medicine. With that, I will pause and take questions. Perfect. Thank you very much. Mr.
Hanlon, does the committee have any questions?
Madam Vice Chair. Thank you, Mr. Chair. Thanks for being here. I appreciate all the details that you shared, Mr. Hanlon. And so I understand the need for nurses. We've had that here and across the country, I think, for a very extended period of time. So hoping we can start making the difference. I know lots of different institutions are expanding nursing programs. And so when do you anticipate, maybe it was in our paperwork, but I don't remember, When do you anticipate the program being able to launch after the renovation element?
Oh, I'm sorry. Apologies. We will be opening the facility in the summer of next year, of 2028. I apologize, 2028. We'll be able to begin offering that program to students before the space is ready because they will have to take general ed-type classes on campus in preparation for nursing and physical therapy specialized programming that would be hosted in the building.
Madam Vice Chair.
Thank you, Mr. Chair. And relative to the physical therapy, the doctoral degree for physical therapy, I mean, that's sort of a new one on me. I totally get physical therapy. I've had that before for a number of different reasons. But how does that play out in the realm of PT for patients, and what does it mean, you know, in the process, I guess? What role do they play? Obviously, there's, you know, deeper credentials, but how does that all play out? Just curious.
Mr. Hanlon. So I am probably wading into an area of expertise that has passed my expertise. I'm hoping that Jennifer Alperly is online and could offer some insights into that for you.
Hi. Yes, I am here. Good morning, members of the Capital Development Committee. Thank you for that question. The role of physical therapists, specifically the physical therapists that we seek to educate at Colorado State University play a part in rehabilitation in many settings In particular this program will focus on rural health So we have a lot of clinics out in different counties in our state that do not have access to rehabilitation, clinical support. And this particular program will seek to place doctoral physical therapy students in these types of settings, as well as educate them for these types of settings. So the role of a physical therapist can be anything from we see them in hospital settings, we see them in clinical settings, just your primary care office. We also see them in those referral settings. please let me know if I can expand on any of that
any further questions from the committee
I will just add as a nurse myself taking a tour up there and talking to some of your folks kudos to you all I think I'm really excited about the innovation I'm excited that you all have found a way to do this with donor dollars and I think it's much needed and exciting that you guys are going to be able to partner up with CSU Pueblo and help your students out up in Fort Collins become nurses and be able to do it while on your campus. I think that's pretty neat, and so kudos to you. Madam Vice Chair. Thank you, Mr. Chair. I move that CDC approved the new project listed on the Colorado State University two-year projection of cash need contingent upon approval of the Colorado Commission of Higher Education at their October 22nd, 2026 meeting.
That is a proper motion. Ms. Forbes, please call the roll.
Senators and Representatives, Henrickson.
Aye.
Johnson.
Yes. Did you say my name? I can't hear you, but I'm a yes.
Pelton.
Aye.
Madam Vice Chair.
Yes.
And Mr. Chair.
Yes, and congratulations. That passes unanimously. Thank you very much.
Thank you.
Next up, we have consideration of higher education cash request, Colorado School of Mines. We have Kristen Volpe with us. Ms. Volpe, are you going to start us off?
Yes, thank you. If I could get my presentation, or I have paper if you would prefer. Let's see. I am sure, yeah, let me try it again. Okay, thank you, Mr. Chair. I'm Kirsten Volpe, Executive Director. President and Chief Financial Officer at Colorado School of Mines. I've got four requests for approval of cash spending authority in front of the committee today. I asked Mr. Chair, would you like me to pause at the end of each of these for
questions and recognition or wait till the very end?
Let's go, yeah, after each one. Let's see if the committee has any questions.
Okay, thank you very much. The first one is a building that Mines purchased in April in
Golden about eight minutes east of campus. It was an old processing lab of certain materials and we purchased the building to turn it into a critical minerals innovation and startup space, commercialization space. That was quite timely as we had received a proposal from Department of War in June to submit a proposal for funding of a project specific to critical minerals innovation and commercialization. We submitted the proposal. We were awarded the funds in August, and those will be the funds that we will be using to fund this project in full. We've got the building itself is quite old. The HVAC system is completely needing to be redone, boilers, chillers, et cetera. You see here some of the laboratories. Most of them are generally reasonable, but they also need renovations to make it suitable for the purposes that we need. This will not be a university research center. This is specific to the specs of Department of War in their need for innovation and prototyping, processing type, whether it's technology or material. So we will be bringing in startups, et cetera, to this facility. On this screen here, it says the proposed project budget is 15 to 30 million. The reason is that we were awarded 32.7 million from Department of War. The 15 million is to fully fund the HVAC, et cetera. We are now in round two where we are likely to get more funding. They want more to the building, so that's why we've gotten up to $30 million, which would be not only just fixes to the HVAC system, but then also additions. On this, you can see an orange bay here that would incorporate probably one or two bays that we would need to be able to build for the processing activity that will be required. We don't yet have a certainty on that award, but we do believe it's coming within the next few weeks. So the request is to go up to $30 million in case the Department of War does fund us for that second tranche. And again, it won't be any university funding. It will all come from the federal government.
Outside of the constant reference of Department of War, which is just weirding me out a little bit, does the committee have any questions on this project? I bet you do.
Madam Vice Chair. Thank you, Mr. Chair. I'm sorry, I might have missed it, Ms. Fulpe, but where is this adjacent to the main campus or relative to the main campus? I'm sorry, you probably said it.
Ms. Fulpe. Thank you, Mr. Chair. Thank you for the question, Madam Vice Chair. It is about eight minutes east of campus, so it is off campus. It is essentially in the course tech They have a technology park there It is within that park which is about highway 58 and McIntyre any further questions on this project
man vice-chair thank you mr. chair and what do you anticipate the student involvement engagement is after this is all renovated you could get them to help
with the renovation maybe go faster too miss philby thank you mr. chair thank you Madam Vice Chair. Students, the primary activity will be to work with some of the startups that will be in there. As I noted earlier, this is not a research facility for the university, but students, one of the big parts that will come out of this is workforce. So we anticipate engaging the startups to work with our students in the technology and the work that will be done
there. Okay, thank you. Any further questions? Seeing none, let's move on to the next project.
Okay, thank you, Mr. Chair. This is a student center, our main recreation center that needs a complete HVAC replacement. It was put in place when it was new about 20, 24 or so years ago. They were swamp coolers at the time. Our enrollment has grown greatly and swamp coolers, especially with Colorado weather don't work that wonderful, and especially given that we have commencement in there as well, it has become increasingly difficult to have appropriate air flow and cooling of air. So we have been assessing the right path forward. We've got three different paths forward, and the primary reason of the three different paths is because we will be funding this, I will say, with patchwork, with different pots of money that we have. And so it depends on the availability of all of those funds. But the first is that we would replace it like for like, do swamp coolers with swamp coolers. That is not what our engineering department wants to do. But it is one of the smaller, the least cost of the group. The next is to replace with cooled air handlers, which creates air handling within the unit itself, which feeds quite a bit on electricity. So we think we're going to have significant cost increases there because this has a large gymnasium, several gymnasiums. It's got pools. It's got a lot of fitness centers. So that is not ideal, but it may be the way that we have to go. The team is preferring that we bring chilled water, which is how we manage most of our academic and research buildings. There's a chilled water facility right across the plaza. They would like to bring chilled water into this facility and then just create regular cooling that the majority of the campus has. But that is the most expensive. We have here costs could be up to $10 million. I received an update yesterday. They're not thinking that it's going to be that high, but they want to have a little bit of a wiggle room just in case. So what we're looking at, and I believe the committee has a memo potentially in front of you, because what we're likely to do is request that we've got savings from our recent residence hall. That just opened up in July. We've got about a $4 to $5 million savings from that project that we would like to move. to this project and those were the student housing was funded with state intercept bonds and so we requesting to utilize those funds and move them over from the state intercept for the housing and move it to the recreation center. We also have other auxiliary cash reserves in housing that we will utilize to fund the rest of this.
Ms. Fulpe, I do have a quick question for you. We're looking at upgrading. You're talking about chilled water. There are other universities and other state entities that are, you know, looking at things like geothermal, you know, which can consistently cool and heat some of these facilities. And there's significant dollars. And I specifically, you know, I look at Mesa, who's doing something. I specifically look at the State Historical Society, you know, and they're able to utilize dollars and get loans and pay those loans back with the cost savings from energy efficiencies that are saved by going, you know, some of these routes. I guess, especially with the School of Mines, I feel like, you know, there's a path here to be a leader in that. Can you kind of talk to us of if or how you're exploring that and why when we're making these changes, we're maybe not going that path? Yeah, thank you, Mr. Chair.
That's a great question. And we have we do have geothermal on campus and two installations. It's a lot easier when it's a brand new building. So we just incorporated a parking garage and a our entrepreneurship center on campus that has geothermal on that as well, as well as as solar. We also have geothermal on another building. It was considered on this, but locationally it's very hard. This building is in the middle of a heavy – there's a lot of other buildings around, and there's no ground, if you will, at least that's what they tell me. I'm an accountant. To be able to support the geothermal on this particular project. And so that – we do deploy it. We actually got some very nice IRS tax credits for the geothermal and the solar that we did. And we do have green bonds that we did issue for those particular projects. So we do look at those for every project. It's just a little bit harder on this one when it's in an already mature building area to how do we create the space to put the geothermal underground.
And I'll just be on the record on saying I would like to see what that analysis looks like, because I appreciate that we're being told that, but kind of showing that that box has been checked and that it's not possible. because I do think that when we're making large changes like this in the tens of millions of dollars, are there missed opportunities to be going down a path that for long-term energy efficiency cost savings that we're missing out on potentially because we're just continuing what we were doing 20 years ago?
Senator Pelton. Thank you, Mr. Chair. I appreciate not going back to the swamp coolers because that's old technology. Grew up with swamp coolers. It doesn't cool anything off, so I understand that. My question for you is do you have any idea on how big you're going to need to increase your – I'm going to call it a service because that's what it is, electrical service to your building to handle the air handlers that you're talking about putting in?
Ms Volpe Thank you Mr Chair and thank you Senator Pelton I do not know the answer to that question and so if the committee will allow to get back to Chair Mullica request to have the geothermal assessment reviewed, I could bring that answer back to the committee.
Absolutely. Thank you. Any further questions on this project? seeing none we will move to the next project
all right thank you mr. chair as the university has grown we have we have absolutely grown our dining opportunities but we need to continue to grow our dining opportunities even more over the last several years we've added about 1500 students who live on campus that brings us to almost half of our student body live on campus. And dining is, we're kind of in a dining desert on campus as well as sort of around Golden. There's a lot of nice restaurants, et cetera, but not anything that is, you know, very handy for students to jump to. So we have been working with Sodexo, who is our food service provider, for probably about a decade. and in the most recent contract negotiation for the amendment, we were able to incorporate that Sodexo does fund our next round of dining expansion. So we've got four particular projects. None of them are large. They're all relatively small but are in particular locations where students need to be able to access quickly. So what you're seeing in front of you today is just in one of our greens. This is called the Green Center. It's got an auditorium and several classrooms. There is no food anywhere near it. So we're planning on incorporating kind of a grab and go. We also have on the bottom left, we are bringing in a local ice cream seller who will have presence on campus to, I guess, make food a little bit more fun for our students. On the right is expansion of our student center to have outdoor seating and have an expansion of a restaurant that is right behind there. And then the last one is working with a local golden pizza restaurant to expand an existing cafe where they will come in and run and manage that food service. So our estimation and the funds that we have from Sodexo are $10 million. And so for these particular four projects, we're asking for authority for the $10 million, which, again, is coming directly from Sodexo.
So how does that operate with the Sodexo contract? Are they, the university owns the building or the additions that are being put on, but does Sodexo require a longer term contract to try to get a return on their investment? Or does that change anything in regards to the flexibility that the university has when it comes to choosing kind of their food provider?
Yeah, thank you, Mr. Chair. That's a good question. So we, because we've been with them a long time, we have, we renegotiated about every three to five years, depending on what the term is. And this one, they did want a little bit longer of a commitment from us, so we went to seven years with this particular arrangement, but we also have incorporated in there that we can terminate without cause. Either side can terminate without cause. So we felt relatively good about that. They've been a good partner for us. And so we feel very comfortable that having this additional dining to support our students and having still them, Sodexo as a strong partner is in the best interest of the university.
Madam Vice Chair. Thank you, Mr. Chair. Kind of along those lines, one of the dining experiences that you mentioned was a place where you're already serving pizza from a local vendor, if you will. And so even while that's like a separate restaurant that's local and golden that is providing that food, it's maybe not coming from Sodexo. I'm sorry, I can't even say it, Sodexo. So, but they're going to cover the cost of renovating that space anyway, even though, I don't know, maybe they are tied into it.
Ms. Volpe. Yeah, thank you, Mr. Chair. Thank you, Madam Vice Chair, for your question. So, it is pretty common, and we already have vendors on, food vendors that are on site but that work through Sodexo. So when we have other vendors come in that are not the Sodexo brand, Sodexo does manage them. So we already have a brand that's in one of our residence halls. The pizza brand will work under Sodexo. Sodexo will get a piece of the revenue. And then Little Man Ice Cream as well will work under Sodexo. So it's an arrangement that's pretty common where Sodexo is our umbrella service provider. And then we work together to utilize certain vendors that are more name brand, if you will. So that's how that works.
Gotcha.
Thank you.
Any further questions? Seeing none, let's move on to the next project.
Thank you. This next project, I was in front of the committee two years ago requesting approval of two renovations and a new build. I'm happy to say that those two renovations are done and the new build is getting started. This is up in Arvada, a property that we bought several years ago to support the quantum technology hub that was dubbed by the Federal Department of Commerce through EDA. Those original projects are funded through House Bill 24, 1325 tax credits, so we will be, our application is in for those tax credits. As we move forward with this project, the next step is developing it. The site itself is an old industrial site, and so our plan is to develop the property, in particular for quantum, for the quantum initiative that was put in place, to bring in quantum startups, quantum mature companies. and so in order to start the development we need to fund infrastructure that needs to come to the site again it's a very old industrial site we have an on-site sanitary system there is not enough water to get to the site there's not enough power and we need sewer lines to get to the site so we are actively right now working with all the city of Arvada agencies to get that infrastructure to the site. We have hired a developer, Lincoln Property, who a national developer who will be developing the property on our behalf Mines will be if you will the landlord We will ground lease the land to the developer in phases and the developer will be financially responsible for the vertical, for the buildings to be built, and Mines is going to be responsible for the initial infrastructure, the horizontal that needs to come to the site and be incorporated within the site itself. So that's the general request in front of you today is the horizontal. Here I noted, as I mentioned earlier, the sanitary line. We don't have full costs yet. We're a little premature here, but we need to start to sign at least design contracts with civil to be able to get an estimate on what this is going to cost. We have some back of the envelope, but I just want to be clear that the costs that I have here are we, the earlier, earliest amounts were about up to $7 million. And that will bring sanitary lines to the site, water supply, as well as power to the site. The site, again, has all of that, but it's not sufficient to bring more people to the site. So the request today is to have spending authority up to $7 million. We are working with numerous agencies. We've already got a grant in for chip zone funding for the infrastructure. We are also working with the city and the county on creating a special district here to get tax incentive finance or increment financing to be able to support the funding here. And we're also looking to the city of Arvada themselves for financial support. So we don't have all of the funding in place, but we're requesting this so we can at least move forward with the design part for the construction of the infrastructure so that we know exactly how much it's going to be.
Ms. Volpe, we were told that you didn't have a final number and that this was something that you were potentially bringing back to the committee and not asking for action to day on. Is that correct?
Mr. Chair, we have an early estimate, and so we think the $7 million is fine, but we will be hiring someone. We haven't hired civil yet. We've hired another firm, it's called JVA, who's actually done the initial work, and we are hiring another firm to confirm that work and then to be able to sign that contract to get the work done.
Is CCHE considering this for approval at their meeting later this week?
They should be, yes, they should be.
Okay, we're going to take a quick senatorial five on this one.
Okay. Just one sec.
Thank you.
We only have two motions at the moment For them Yeah Yeah Yeah
Okay. Okay. Yeah. Yeah.
Okay, there's like some disconnect I think between that, our team and her I think.
Okay. Thank you. Thank you.
Thank you, Mr. Chair. The first motion that we have is going to incorporate all four of the projects that we've just heard about from Ms. Volpe, Sodexo dining improvements, the Student Recreation Center HVAC replacement, the West 45th Street lab improvements, and the Quantum Commons infrastructure development. So it includes all four of those projects. So, Mr. Chair, I move that CDC approve the new projects listed on the Colorado School of Mines' two-year projection of cash need, contingent upon approval of the Colorado Commission of Higher Education at their October 22, 2026 meeting.
That is a proper motion Seeing no other questions or further comments Ms Forbes please call the roll Senators and Representatives Henrickson Aye Johnson Chast
Morrow.
Yes. Yes. Aye.
Johnson.
Yes.
Madam Vice Chair.
Yes.
And Mr. Chair. Yes. Congratulations. That passes unanimously. We have one more motion, Madam Vice Chair.
Thank you, Mr. Chair. And this motion is focused strictly on the Student Recreation Center HVAC replacement. I move that CDC approve the use of the redirected intercept program bonding of up to $8 million for the Colorado School of Mines Student Recreation Center HVAC replacement project. And just for the record, this is going to the JVC, I believe, because of the intercept bonds. And so that's the recommendation going to the JVC.
Is that correct? Perfect. That is a proper motion. Seeing no further questions or comments, Ms. Forbes, please call the roll.
Senators and Representatives. Henriksen. Aye. Johnson. Yes.
Morrow. Yes. Aye. Madam Vice Chair. Yes. And Mr. Chair.
Yes. Congratulations. That passes unanimously. Thank you. Thank you, committee. Appreciate it. Members, next up we have consideration of encumbrance deadline waiver requests from the Department of Education. Do we have Andy Stein available online? Hello, Mr. Stein, if you want to unmute yourself.
and hello mr chair can you hear me yep we can hear you
hello we can hear you mr stein can you hear us
hello mr chair can you hear me we can hear you
Is there something going on with the computers? Maybe ask him to turn up his volume.
I cannot hear you.
Mr. Stein, can you hear us?
My speakers are on. My volume is up.
We can hear you.
I can leave and come back in.
We can hear you, Mr. Stein. I'm wondering if it's the chair's microphone by any chance. Mr. Stein, can you hear us now?
I can, yes.
Okay, so what we've discovered is that the microphones at the dais are not working, but the microphones at the test We can hear you fine. Maybe just leave that on and maybe pick it up with the... So I'm going to leave this on and I guess if we need to speak to you, we'll just circle over to the testimony table to do so, sir. Okay. I heard the question, can we just leave it on from whoever else was speaking? Perfect. Yep. So if you can hear that, Mr. Stein, feel free to start us off.
Okay. Thank you, Mr. Chair. Thank you, committee members, for allowing me to be remote today. Always a challenge or often can be. I am here to ask for a waiver for the six-month encumbrance rule for the Colorado Talking Book Library's HVAC Electrical and Energy Upgrades request. I believe you received a brief summary, so I won't share that with you unless you would like me to. If you're not aware of what the Colorado Talking Library is, it provides audio, braille, and large print books for people who cannot read. We also provide election resources for these patrons. We have a recording studio on site for creating audio books. We house the state publications archives. And I find rather interesting, it's also a manufacture and repair facility for beep ball, which is a buzzing and beeping baseball for an adaptive version of baseball for blind and low vision individuals. Kind of a neat little place in Colorado. and we did post an RFQ on June 30th for this project and we awarded it in late August. We received the first cost estimates mid-October and they were higher than we anticipated. So, I am working with Tana Lane and the team that we awarded the RFQ to to reduce the costs. I'm cautiously optimistic that we will get done by early mid-November. I believe the six-month deadline is November 8th, so I am here out of an abundance of caution because I believe you also do not have a November meeting to request a waiver for the six-month rule.
Thank you, Mr. Stein. Does the committee have any questions?
Seeing no questions, Madam Vice-Chair. Thank you, Mr. Chair. I move that the CDC approve the request from the Department of Education to extend by six months the encumbrance deadline for the fiscal year 26-27 appropriation for the HVAC Electrical and Energy Upgrades Colorado Talking Book Library Project at $1,179,689 of capital construction funds. That is a proper motion.
Ms. Forbes, please call the roll.
Senators and Representatives, Henrickson.
Aye.
Johnson.
Yes. Yes. Aye. Madam Vice Chair. Yes.
And Mr. Chair. Yes. Congratulations. That passes unanimously. Thank you for being with us, Mr. Stein.
Thank you.
Members, next up we have consideration of P3 project requests, Governor's Mansion parking lot, and update on Jefferson County TOD project with the Department of Personnel Administration. We have Director Kierak with us. We have others at the table. I just have Mr. Kierke on my list, and so we'll have to do introductions as well. Thank you Okay
Thank you. Thank you. Yeah.
Perfect. Start us off, Mr. Kirk.
Thank you, Mr. Chair. I would like to, Tom Kierak, I'm the director of the P3 office. Hi, everyone. Danielle Oliveto, Deputy Chief of Staff in the Governor's Office. I oversee all of the operations for the Governor's residence.
You got to push the button, sir. Thanks.
Thank you. My name is Adam Berger. I'm with Adam Berger Development.
That is a very creative name for your company, sir. Keep it simple. Starts off Mr. Kierke.
Thank you, Mr. Chair. So as I presented last month, we have come back with two projects that put public assets to work for the state of Colorado, both in terms of housing and long-term benefits for the state. Two projects today share the same public purpose. One, we're coming to request an action, which is the governor's mansion parking lot. It's approximately 67 affordable and attainable homes. that does, I believe we came back, we came to the CDC in 2021 before my time, and they had asked us to preserve 28 parking spaces for the governor's mansion. That project here today does that. We're able to preserve 28 of the 67 parking spaces in the complex for the state usage for the governor's mansion, as well as a to ground lease that will go to the Mansion maintenance fund to help preserve the mansion over time the Jefferson County transit development we just wanted to further update you on that project from last time for a future search for approval on that project so the governor's mansion parking lot the proposed action is that the CDC approved the p3 use of the unused underutilized point four nine four acres of state land for the development of the governor's mansion parking lot redevelopment project that would deliver the 67 affordable and attainable homes between 28 full-time reserve parking spaces for the governor's mansion and state staff and generate that estimated annual ground lease revenue of 25 to $50,000 to support the governor's mansion maintenance This project really does do what a P3 can do. It's one project, and we make progress on two priorities. One is housing in Denver, 67 affordable attainable units. Over the next decade, it's estimated that there's a need of 45,000 affordable attainable units in Denver. I know it's a long way to go, but every home really does count when you need that many homes built in a decade. And then the $25,000 to $50,000 annual revenue to the Governor's Mansion Maintenance Fund. It's estimated there's $10 million in repairs and maintenance over the next decade that will be needed on the Governor's Mansion. And this will be one of the kind of the stools that we'll be able to pull from to help the governor's mansion either maintenance or upgrade any of that building over the next 10 years and help it continue to run either as it is now, which hosts state events, or if a governor decides to live there as a residency. So we're trying to plan so that we do have kind of the funding to ensure that it could be utilized however a future governor decides to utilize it. Mr. Keur, can you help us better understand, I mean, that's a decent spread from 25 to 50.
And then, you know, this is my understanding, it's a 99-year ground lease. And so, you know, 50 years, 60 years from now, $25,000 to $50,000 is probably a lot different than $25,000 to $50,000 even today. Is there an inflationary component to it that goes with inflation and then help us understand why a spread of essentially double is there rather than just kind of a more stable number? Yeah, the spread is there because we haven't finalized how the project will be financed yet.
So if we're able to find cheaper debt to basically finance it, we're hoping to get that $50,000 a year number. And that's the hope that we're able to finalize on the spread is depending on how we can finance this project through Adam and team, they'll be the ones looking for that financing. So we've asked them to really explore all avenues when going to final financing. But we wanted to make sure that you guys understood right now that it is possible that $25,000 would be the amount. So we didn't want to, we wanted to give you kind of the options up front. But we are striving to get that 50K because we know how much work the governor mansion does need So typically there will be sorry about that There will be a 3 inflationary throughout the 99 year ground lease And there also will be a development agreement that goes along with that ground lease. So it's, it's, so if most likely after 30 years, we will put kind of markers in there that, that kind of, there will be a need to refinance and keep that project up to date so that it's running. There will be milestones that will be needed to ensure that the project is operating at a current level of need for the city of Denver. So that will all be worked out in kind of the development agreement as well as the ground lease.
Will the development agreement ensure that these dollars are in there for the life of the 99-year lease? So after 30 years, is there going to be a potential that these dollars go away? Or will there be a mandate that while there is a ground lease that there will be dollars going to the governor's mansion?
Yes, there will be a mandate. If they were not to pay the dollars, then the ground lease would be broken and the state could take the grant back.
Senator Henderson. Thank you, Mr. Chair. What are the – is there an estimate of what the current annual financial liabilities are of its continued use in its current state? And if it were – I know that it – that area, were it to be continued to be used, would require some significant repairs. Is there any assessment of what it's costing us per year to just keep it a vacant lot?
Mr. Kerrick?
To keep the lot vacant or to operate the governor's mansion?
To keep the lot vacant.
So I would offer that currently we don't do really any maintenance to keep the lot vacant. It operates right now as a parking lot. So to Tom's earlier point, we own the upper lot of two lots that are on that corner of 8th and Logan. We have 28 spots in the top lot that we use for regular events at the governor's mansion. we offer it to the neighbors for daily parking when the mansion is not in use. We don't charge for that. And then the lower lot is part of an agreement that we have, I think, with DPS. They own that bottom lot. And so at nighttime, we're able to utilize both lots for events. But during the day, we just have access to those 28 spots. So there's currently no money that's going against the lot.
Senator Henderson. Yeah, thank you, Mr. Richard. There's no revenue, just a depreciating asset that is increasingly building maintenance demands.
So I'll clarify that. There is no dollars that go from the general fund to the governor's residence. So the governor's residence is operated solely off of revenues that it makes from hosting events.
Any further questions before we move on? Seeing none, go ahead, Mr. Kirk. Pass it over to Adam Brugger now.
Thank you for your time. We're very excited about this project. Just a little bit of background on our company. We've been doing real estate development for almost 30 years. We've been focused in the Denver market for 15 years solely. And in the last 10 years, focused primarily on delivering affordable housing. primarily middle-income housing and affordable for sale housing. About 10 years ago, we chose to explore or modular construction. There really wasn't much of it being done in the urban setting here in Metro Denver. And we established a proof of concept with a modular duplex product to sort of dip our toe in the water. And fast forward to today, that duplex that we designed and built that's modular, We built dozens of them throughout the metro area, and we're just wrapping up an affordable for sale duplex project in North Aurora for Elevation Community Land Trust. So we've gone all in on using modular as a means of delivering affordability, and we've chosen to do that because we've demonstrated to ourselves that, well, there is a dimensional constraint as to how wide a box you can build in terms of what you can ship down the highway. we've demonstrated to ourselves and ultimately to the market that you can build a high quality product that competes with anything in the market while being able to take advantage of what modular offers, which is faster delivery and slightly improved costs. And the precursor to the governor's mansion is a project we delivered last year, which is a six-story multifamily project that was built in 11 months from the time we set the boxes. It's comprised of 50 boxes that were set on a podium in six days. and that 11 months was supposed to be nine. So we didn't quite meet our schedule, but nonetheless it was faster and we think probably in the neighborhood of about 25% to 30% faster and we determined it's somewhere in the neighborhood of 20% to 25% less expensive to build. And so we see that as a significant tool to be able to offer a product that's faster, less expensive, and therefore we can offer lower rents.
Are those manufactured locally?
Well, those weren't. So far we haven't. We tried to actually build that project with a local factory based out of Pueblo. Unfortunately, they went out of business as we were about to pull building permits. So we had to pivot to an out-of-state factory. But we're very involved with the Division of Housing, with DOLA, around supporting local factories and the modular ecosystem that exists in the state of Colorado. We actually believe that the state has taken a significant leadership position in supporting off-site construction nationally and is a leader in creating an environment to support modular construction. So we are working. We're on several advisory committees with the state and with DOLA. and we are working to support local factories on several of our next projects So while we haven yet we tried to and going forward we intend to
Mr. Keur, can I ask a question with it being kind of a P3 project? Obviously, I think there's a strong desire, I would assume, from everyone on this committee that we create as many jobs in the state of Colorado as we can. Are there discussions when we do projects like this to ensure that these modulars and incentivize that these are manufactured locally so that we also see that benefit in regards to those manufacturing jobs?
Yes. The hope and what we kind of push is that that works. And we do have discussions throughout our development agreements. There's kind of a push and pull on all of these issues throughout, whether that's AMIs, whether that is. And the hope is we can get to a point where the modular industry in Colorado is developed enough that it won't even be a push and pull. It will be easy enough. but I know the concern on some of, like Adam said, when he had the agreement with the Pueblo one is the performance and getting there, but we're working on that. So there will definitely be, as we go through the development agreement, is working with both Oed and Dola who do a lot of that work and seeing if we can potentially get one of the more mature modular industry partners to kind of step up and be able to deliver this project as we move forward?
I'll give you an example. It's a very good question. We went all in five years ago to try to support the factory in Pueblo, and, you know, unfortunately they closed their doors. And, you know, there's a lot of lessons learned from that experience. And what I would say is we're going to walk before we run. This is a complex product type, being five stories. And so, you know, the factories you typically would go to for that have been in business for decades and know the product really well. And so, like anything, you want to go with best in class. That said, we have product that is under development right now, which is a three-story single-stair product that we have a site and we intend to deliver ideally next year, that's really an ideal product for local factories to get into multi-story production. It's less complex. and so starting with that level of complexity, some of these factories have only been around for months, maybe a couple of years, so it's important that we support them in the right way with the right product and allow them to establish their skills with the trades in the factory to get to the point where they'll be ready and to deliver on a five-story product. But I think it's early for these local factories to support that level of complexity right now. But we are 100% committed, working with Oedit, to continue to do the work that they done which is investing in these local factories and supporting them And so we clearly intend to work on projects to push orders to these local factories In fact, the one that I mentioned, there's a new round of funding that is coming out of Oedit and Shafa that will be announced in several weeks, actually. And it's funding through Prop 123 specifically designed for projects that send orders to the local factories. So you have to have a project where you will be ordering from a local factory. And the three-story product that I described is one that we'll be applying for.
I mean, we do have businesses that have been in business quite a while in Colorado. I think of Fading West, for example.
Yes.
And so, you know, and I think, and I'll just be on the record that, you know, we only have so many, you know, so many projects like this that the state, you know, gets to kind of have a say in, you know, for lack of better words. And, you know, I do think that obviously there's a win here that we're hearing about when it comes to affordable housing.
I don't disagree with that.
But if there's a win to also create jobs for Coloradans, that's also a good thing as well or support existing businesses. And so I want to be careful that we don't write it off right away because I do think that there is some established industry here in our state as well. Yeah.
When Fading West, we know everyone really well. Yeah.
All right. Go ahead and we'll call on Senator. Oh, okay.
We know everyone really well. I mean, every factory has their sort of wheelhouse of where they type of product they want to produce. When you build a project like this, 50 boxes is pretty significant, and it consumes a significant portion of the – and this is based on my experience. I've been doing it for 10 years, but I'm not a factory. But what I can tell you, what they tell me is it would tie up their production for months. and do they want to play in that space. And part of the issue that the state is contending with with these local factories in terms of supporting them is ensuring that they have ongoing orders to keep their factories operating. And if they're relying on a project that's going to consume two to three months of their production and it gets delayed, that's a problem. So in some instances, they'll rather go after smaller projects that are more nimble. And I think that's Fading West's position. We talk to them regularly, and they are not really interested in this project for that reason, because it's a high risk for them for something that consumes so much of their production. But what I'll leave you with is we're 100% committed to supporting the modular industry in the state in a way that works for everyone. And, you know, our first attempt was to work with a local factory. So it's not without a desire, lack of desire. It's really just some practical components of how modular works. And so by all means, if there's a factory that's ready to build this product type, we'll support that.
Senator Pelton. Thank you, Mr. Chair. I mean it nice to see that the modulars we been using modular construction in rural Colorado for decades A great example is when I still lived over on the western Slope we were wiring and all we had to do really when I say wiring is putting in fixtures and switches and outlets, and that's it because it was already there for us, and then putting the service on the building, but two-story apartment-style buildings just right outside of Buttermilk Ski Resort for employee housing. So that's exactly what we were already doing back in the late 90s. I completely understand what you're talking about with the modular construction. You know, when you go higher stories, higher than three stories, it's going to be very complicated on how you build those first couple of stories. My question is, is the permitting in Denver going to be, do they embrace this? I mean, don't get me wrong, this building is very, very good at taking away local control, which I'm absolutely against. But I just wondered what kind of roadblocks are you going to be running up against? Does the city and county of Denver embrace modular construction, or have they not? And how difficult is that going to be?
It's a good question. And we've been doing modular now in the city for six years. We built an affordable for sale product for the Globeville-Elyria-Swansea neighborhood because 50 of their homes were condemned as part of the I-70 reconstruction. So we were selected to build townhomes and duplexes for that neighborhood in partnership with the Globeville-Elyria neighborhood and a coalition that was created to support the development of those units. and there were a process where there's education on both sides. And what I will say is today, there are things in place today that weren't when we started that project. For example, the city of Denver now has their affordable housing review team, AHART, and now have a fast-track program to support affordable projects.
And from a permitting standpoint, it's exceptional. When we had to pivot for our West Holden Place project, the project I mentioned, that five-story project that we built on the Sun Valley neighborhood, south of Bronco Stadium, when we had to pivot to a new factory, we had to resubmit plans because we had originally designed it using light-gauge steel, and we had to pivot to wood frame construction. We got it SDP and building permit in six months back in 2023, 2024. And now they've made their permitting process even better. And, you know, we also have challenges with inspectors in terms of what they have to inspect. And every jurisdiction is on a learning curve with modular. But what I'll say is Denver's figured it out. We've got a relationship with the chief building official. We've got a relationship with those inspectors. They know their lane. And so I would say that all things being equal, doing modular construction in Denver is a really good place to do it. Thank you. Madam Vice Chair.
Thank you, Mr. Chair. I appreciate you being here, Mr. Berger. I think it's super helpful and you can tell there's some interest in understanding this better. I totally get that. that a manufacturer, you know, doing modular would need to ramp up. You know, you start out smaller and you do smaller projects, and it's like, oh, but we could, you know, expand and we'd have more options, but we have to have more building or we have to have more equipment or we have to have more space, you know, in order to put together a bigger box, if you will. In a previous life, I was a cabinet maker, and some cabinet shops, they do open bookcases and bookcases with doors on them, and that's all they do. But eventually they decide, well, we could probably build a desk too. And all of that expansion and kind of looking at additional options of putting skills to work that are similar but different, it takes time. And you go from a smaller shop to, well, we need more space, So you need a bigger warehouse and then a bigger warehouse, and you need a finish room, and all of the things, I think, add up. So I totally get that the industry has to grow and be in a place where they can expand and feel like they're not taking on as much risk because there's more need or want or desire for it. So I appreciate all that. I am wondering if there's potential for a tour for us to see, like, a project that's underway and see, you know, a project that's finished. I know CDC is not going to coordinate one for us, nor will the government pay for one for us right now. But anyway, just if we could do some, you know, like an informal something, maybe the first two weeks in November, if that would work out, I'd be very interested.
Absolutely. I encourage it. You know, our whole ethos with modular is sort of one facet of the tools we use to deliver on affordability. And we do it because we've demonstrated to ourselves that it saves time and it saves some money. but what's paramount to us is we're delivering a product that people want to live in. That's well designed. So design for us is the number one priority. So when you go, and I absolutely want you to see the building that we finished, which is on the same lot size as the governor's mansion parking lot. It's identical. In fact, that design is very similar to the one that we just delivered. So I encourage you to come and see it. And what we hope is that when you walk into it, you'll see a product that's a multifamily apartments that look and feel just like any other market rate project in the city with high quality finishes and well laid out space. And the fact that it was modular is almost, you know, we don't need people to know that it's modular. We just use that as a tool. But, you know, it's important for us, for people to see the product, to see that, oh, this was modular, we'd never know. It looks like any other product. So absolutely encourage you to do that, and we'll make ourselves available for that tour.
Madam Chair. Thank you, Mr. Chair. and I appreciate that. And I said the first two weeks of November, but what I really meant was the second and third weeks of November. Okay. I was saying. In my head I knew what I meant, but that's not what I said. So anyway yeah that would be great Senator Hendrickson Thank you Mr Chair I was wondering like is anybody busy the first week of November Yeah I think this is really important, and this is exactly the direction that we should be going. And I think when we're talking about the Governor's Mansion site, that's the ideal site for something like this. I appreciate that there's no current cost right now, but what we have is a depreciating liability. It becomes an asset to the state that will help with the costs incurred of the upkeep of the governor's mansion, which is a necessary function of the state government. and in the meantime fulfill a figurative hole in the community where there is this lack of market rate affordable housing, and then the actual literal hole where it's not exactly a hole, it's just an empty space. in a community that we know from community surveys has an incredible demand for it at a location that is strategic for transit accessibility with set-asides that guarantee all the necessary functions of the governor's mansions are seamlessly maintained. and with adequate, more than adequate inventory of paid parking within three blocks of that for when there are special events, weddings, parties, whatever, at the governor's mansion. Like, everything is accounted for with the added benefit that we're talking of affordable housing for dozens of families and hundreds of individuals. I'm really excited about this and I think this is exactly the kind of thing that we should be doing. Madam Vice Chair. Just one more question. So the way the parking lot is right now, the 28 spaces that are like on the north end and the other spaces that are on the south end, it's DPS, right, that's on the south end. Did you say that? And this is taking all of that parking lot, right?
No. Sorry, Madam Vice Chair, it's actually just the upper lot. So it's .494 acres, so the lower lot actually still remains, the DPS lot. And then just further, there's a lot just to the south of that, which has been purchased and will eventually be under development as well.
Madam Vice Chair. So this rendering photograph that's right there, is it facing Logan?
Yes. Which runs north and south.
Wow. It's just wider than I perceive that parking space to be.
It's 175 feet of frontage along Logan, and then it's 125 feet deep. That's the dimension along eighth.
Gotcha. So that's the orientation of the lot. Great That what it looks like but it just in my head the parking lot doesn look like it that big It doesn You right Okay Yeah. Okay. Thanks for that. Appreciate that. And I will just say, I don't know how much more presentation you have or if this is it, Mr. Kirk. I would just say I would strongly encourage to try to maximize those dollars to get as close to the $50,000. And I appreciate the inflationary component to it, but I definitely think it's obviously a 99-year lease. And so, you know, we don't have a lot of – this is a big step, in my opinion, for the state. I'm not saying it's the wrong step at all, but it's a big step. And I just – I want to make sure that we maximize that benefit as well and also get the win of the affordable housing that you all are talking about. Mr. Chair, thank you. Just one point on that and something that I've been pushing for on this project and they've heard me say over and over again, you know, to the point of the 25 to 50,000 is a big deal for the governor's mansion. There at some point becomes, right, if we can't get the capital stack right or, you know, we start to dip under that 25,000, then I actually think we have to have a conversation of is this actually worth pursuing, right? Because the whole point is to create not only the affordable housing but the revenue stream. And so just kind of keeping that in the back of your mind from a support perspective of why having community support and having the support of this committee is really important because I think it helps further our ability to raise money for this project.
No, and I appreciate that. And I think, you know, the other component that we've talked a lot about is, you know, the jobs of the manufacturing of these, you know, this product. And, you know, if there's any way to, you know, ensure that we maximize that as well and that benefit to the state, I think there's also another win that we should, you know, continue to try to strive for. I'm happy to continue. We have more slides, but we've answered a lot of questions. So you tell me.
Yeah, if there's anything else you want to share, if not, we can.
You know, we're big believers in TOD, transit-oriented development, so we are going to press hard on supporting tenants' utilization of public transit. We have a bus stop right on 8th to take advantage of, and then there's also stops on Lincoln and Broadway for east-west and north-south access. So we are going to work on what they call a transportation demand management, which is essentially offering opportunities for tenants to utilize public transit through bus passes, et cetera, as part of our lease up to encourage getting them out of cars and into public transit. So that's one aspect of what we'll be promoting as part of the project. I think the other facet is what we were talking about relative to the ground lease and the funding and capital stack of the project. We have other projects like this throughout the metro area and have pursued Prop 123 funding. We know how to do it. We've been successful. We've been awarded both Proposition 123 debt, equity, and land banking on other projects. And then there's other tools and other funding sources that exist. We'll be tapping into all of them. And this project is going to rely on these funding sources I say two things One I think the state is also taking a really strong leadership role in providing funding tools for affordable housing, both capital A affordable and middle income, which is fantastic. I think Proposition 123 as a program is a remarkable program that allows us to do projects like this without necessarily relying on tax credits, low-income housing tax credits. So we'll be tapping into those application rounds in 2027 for Proposition 123 funding. and it's going to be an important part because this project, there's some elements of it that are expensive, building the underground parking for the governor's mansion. The building will sit, the modular component will sit on two levels of concrete podium. So we'll have an underground parking and then we'll have at-grade parking and lobby area. So while the ground lease is a very good tool relative to not incurring upfront land costs, we are going to need concessionary funding as part of this project to both deliver on the project itself and deliver on the affordability. And so we know how to do that, and we've done it successfully in other projects, and we'll be pursuing that. And, you know, going back to job creation, you know, Modular is interesting, right? You make a very good point around, you know, these local factories employ 50 to 100 plus people. And we're true believers in Modular. And, you know, if we are able to utilize a local factory to build this project, we will. You know, we also want to ensure that this project is, you know, constructed in a way that's durable long term. And, you know, if you're going to perfect modular, there's really important things that you need to execute on. and one of the most important facets of a successful modular project is when you set the boxes, when the site is ready and the boxes are ready to be delivered and you are setting those boxes, you have, there's a lot of logistics that go into that event, call it the set event, both in terms of where the boxes are staged, how they're delivered to the site, where the crane is, and you want to be setting as many boxes per day as you can. When we did our project in the Sun Valley neighborhood, we set nine to ten boxes a day, and that's how we were able to get that building erected in six days. But you also need a team that knows how to do that, and part of that team includes the factory. Now, what I'll say is we know the people that run these factories pretty well, and they're all very adept at that. I think the piece that is somewhat of a question mark right now is their ability to experience in building a building of this size. And what I'll say is none of them have done it yet so far. So, but we'll, you know, we're part of the modular ecosystem here. We're big supporters of it. We're very invested in it, and we're invested in supporting local factories, because it's good for them, it's good for the state, it's good for housing in Colorado, and it's good for us. You know, if we don't have to ship a modular box 800 miles from Boise, Idaho, we'd prefer not to do that. So we are going to continue to support the effort of local factories for this project. I think we talked, yeah, so on the entitlement process, we are in, we're committing to at least 50% of the units at 60% area median income rent limits. For two reasons. One, we believe that's the right approach for this project in this location. That's part of, you know, state-owned land and part of P3. and it's important that this is a long-term, durable, affordable project. And secondly, it's part of the requirements that the City of Denver has to be part of their affordable housing review team process and fast track. So we're preparing the work required to submit our concept plan as part of the AHART program. It's somewhat more robust in terms of what we need to deliver. So that's going to take several months for us to prepare those drawings for concept plans submittal with the city. And then in concert with that, in order to fit the parking that we need for the building and for the governor's mansion, we're pushing into one of the setbacks several feet. So there's two paths to resolution on getting a waiver to move into that setback that the city supports. We're pursuing both paths simultaneously once we get through concept review. One is a variant and the other is a rezoning. This site happens to be surrounded. It's like a little pocket that's surrounded by slightly different zoning. And so we're pursuing both paths simultaneously. And what it will do is provide the relief we need to move a retaining wall in order to fit the underground parking for the governor's mansion. Thank you for your time. Happy to answer any other questions Thank you Does the committee have any further questions on this project Madam Vice Chair Thank you Mr Chair I really appreciate you being here
and the level and depth of details that's being presented is really helpful. And I'm looking forward to watching this project move on. Thank you.
Thank you. Seeing no further questions, Madam Vice Chair.
I move that CDC approve the proposal for the Governor's Mansion Parking Lot P3 project and authorize the Department of Personnel and Administration to enter into a contract or lease to carry out the project under the anticipated use outlined in the Department's October 15, 2026 memo to the CDC.
That is a proper motion. Ms. Forbes, please call the roll.
Senators and Representatives, Henriksen.
Aye.
Johnson.
No.
Tomorrow.
Yes.
No.
Madam Vice Chair.
Yes.
And Mr. Chair. Yes, and that passes on 4-2. And members, that concludes our business for the – I'm sorry. There's more to the presentation. Oh, I apologize. I apologize. One more presentation. Sorry about that. Sorry, Mr. Kirk. Thank you.
We will try to pare this down and make it as quick as possible for you.
Thank you, Mr. Keurig. Can I have them introduce themselves? Yes, please.
Hi, good morning. Tabor Sweet, I'm Vice President of Real Estate Development with Mortensen.
Todd Holder, Senior Vice President, Provident Resources Group.
Michael Persikiti, Managing Director and Head of Public Finance for RBC Capital Markets. So why the P3 units should pursue this project? It's a direct public benefit that will provide around 350 homes. AMIs from 80% to 90% AMI. It's a new structure for the partnership that will protect affordability long-term and secure a financial return for the state long-term. And it's a model that potentially, when successful, we could repeat for the state. And how this could change the P3 unit a path toward a self unit Recurring revenue from this project could support future projects and reduce any new reliance on any future appropriations or anything of that sort. Start the next projects, fund site studies, appraisals, help smaller projects advance. It would allow us, revenue from this project could allow us to utilize funding for gap financing on projects that just are missing the ability to really cross the finish line. It would allow us to build, deliver capacity, would support our current projects and then almost create a revolving reserve where we would be able to really use our revenue for any kind of future projects, any kind of future strategy that we develop.
Pass it over to Tabor now. Thank you. I do want to be brief. I realize that you guys have been in this room for a while. I would start just by saying that I know this structure is probably unique as you stare at it, and we're happy to answer questions this month or next. We have done this structure before on a variety of product types from healthcare to student housing to workforce housing. So it is unique. That's why I have Todd and Michael here if there are questions. But the long and short of it is that we fund this through tax-exempt bond financing, and there's quite an appetite for that in the market. And the net cash flow, after the bonds are paid for, gets channeled back to the state through a ground lease. This one's unique because we are locating the site. We found a great site that's transit-oriented development in Jefferson County, right next to Red Rocks Community College. and then the site would then be donated to the state and then you would turn it over and give us the ground lease back so that we can then create the tax-exemptible project. So as Thomas laid out, it's about 350 units. I would like to point out before I just turn it over to some questions, the unique part about this is the bond interest rates don't change once you've closed. And so I think if you look in there, do you have our presentation? There you go. Can you go back one slide? I think the unique part of the cycle that we all sit in right now, those two aren't loading up, that's okay. I did provide in the presentation where we think rental rates are going. As you guys all know, there's been a lot less multifamily or any kind of family construction in the last two years, and the rents are inevitably going to increase quite a bit And the next slide that Thomas had up shows I know it hard to see but hopefully it better in your packet The red dashed line is where we bringing the project in initially But those rents only need to go up to cover additional operating costs as electricity becomes more expensive or trashable becomes more expensive. Otherwise, as long as the bond interest and principal is being met, that rent can stay pretty stationary. So as rents increase quite a bit, and this graph only shows a 3% increase, I think the graph before that we showed that we think rents are going to go up 7% or 8% certain years. But as the rents increase and the rent stays the same, your AMI that you want to target could actually go down. So it might start as an 80% or 90%. I think I show here within the first 20 years or within the first 13 years, you could be at 50% or 60% AMI if you choose to. So I think that's the real benefit of this model is that it's not – there's no developer margin. There's no – it's the rates of the bonds are the rates of the bonds, and that's where the rent sits. I think we'll give you guys an opportunity to ask questions if you like and kind of cut the presentation short.
Does the committee have any questions on this project? Seeing none.
Madam Vice Chair. Thank you. I appreciate the packet. It was sent to Aspire staff, and it seems like another great opportunity to provide housing in a place where it can be utilized by people that work locally and go to school locally close by. Yeah, I'm excited to hear more about this as it moves on.
Perfect. Yeah. Thank you so much for being here. Look forward to the project moving forward. Thank you. With that, now that concludes the Capital Development Committee's business. We are adjourned. Thank you. Thank you.