BOULDER — A plan to redevelop the Macy’s Inc. (NYSE: M) department store in the Twenty Ninth Street shopping area into office space will move forward to the Boulder City Council with the blessing of the city’s planning board.
The board recommended approval of the plan Thursday evening on a 4-3 vote, with those opposing the proposal expressing disappointment over the developer’s failure to include a housing element.
Through a process of “adaptive reuse,” Macy’s, with help from Corum Real Estate Group Inc. and Trestle Strategy Group, wants to transform the aging department store into a three-story, roughly 155,000-square-foot office building with about 7,700 square feet of retail space on the ground floor.
“While we’ve been proud to anchor the Twenty Ninth Street mall for decades, the time has come for us to think about the future,” Macy’s director of development Jessica Fraser said. “… The retail market is changing, and COVID has only accelerated what’s already occurring.”
For several years, Macy’s has identified underperforming stores occupying valuable real estate for sale or redevelopment.
Macy’s has been eyeing the Boulder store for redevelopment since 2017, but the retail concept is a new one not initially included in development plan applications.
“Appropriately named the Marketplace @ 29th, we envision this space as a community-driven collection of homegrown retailers. We foresee tenants ranging in size from as little as 300 square feet to as much as 3,000 square feet,” according to planning documents submitted by Macy’s. “Providing spaces of this size would further diversify the offerings at Twenty Ninth Street, allowing it to serve not only as an ‘incubator’ or ‘proving space’ for new concepts, but as a home for independent businesses that are otherwise unable to find small, affordable retail space elsewhere at the property or in the surrounding area.”
Representatives for both the Boulder Chamber and the Twenty Ninth Street landlord Macerich Co. spoke Thursday evening in favor of the redevelopment proposal.
“Revitalizing an area like Macy’s, a key commercial area in the heart of the city, is an important step in our economic recovery process,” Boulder Chamber senior policy director Lori Call said. The redevelopment would “bring energy and life to a really dated building.”
Macerich property manager Boyd Hamilton added: “Locally and nationally, the retail environment is dynamic and rapidly changing, even more so since the COVID pandemic has hit. We’re unsure what that (retail environment) looks like in the future. Continual reinvention of this landscape is absolutely necessary.”
Not all board members agreed with this assessment.
Criticism of the plan mostly boils down to concerns that the addition of office space will exacerbate Boulder’s jobs-housing imbalance. That imbalance is a reference to Boulder’s ongoing challenge of providing affordable housing options for the city’s workforce while continuing to add high-wage professional jobs that push up the cost of housing.
“We are not building housing at the rate that we need to be building to address the jobs growth,” Boulder Planning Board member Sarah Silver said.
Boulder’s concern over the jobs-housing imbalance is so acute that the city council in early 2019 adopted a development moratorium across a swath of the city that includes the Macy’s site. That moratorium, inspired by Macy’s proposal, was meant, in part, to assure existing residential and retail spaces wouldn’t be gobbled up by developers and turned into office buildings.
Macy’s plans were initiated prior to the moratorium, which was rolled back last October.
“This is a buzzsaw (Macy’s) knew they were jumping into,” planning board member Peter Vitale said of the city’s development approval process, which must be navigated before construction starts.
Regarding the possibility of including a residential component in the Macy’s redevelopment plan, Trestle Strategy Group founder Danica Powell said, “We certainly evaluated it and looked at it in depth.”
But Macy’s and its development partners found that zoning regulations on the site would allow only for the construction of 64 residential units. The revenue potential of that sized residential project is dwarfed by a 155,000-square-foot office building.
Macy’s proposal will now go before the Boulder City Council for final approval. A date for that hearing has yet to be set.
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