Redevelopment plans for the Aspen Grove mall were narrowly approved Tuesday night by the Littleton City Council, allowing the owner to apply to build residences and significantly cut back on commercial retail space.
The council voted 4-3 to approve the plans for the 32.7-acre mall property at 7301 S. Santa Fe Drive, which is owned by California-based Gerrity Group. The plans allow for up to 2,000 residential units to be built and for existing retail space to be trimmed to as little as 125,000 square feet from the current 270,000 square feet.
Mayor Jerry Valdes and council members Kelly Milliman, Patrick Driscoll and Mark Rudnicki voted in favor of the plans. Council members Scott Melin, Pam Grove and Carol Fey voted no.
One key topic was the amount of retail space.
Gerrity Group Managing Director Kevin Gerrity said during the meeting that about 150,000 square feet of the existing space is occupied by tenants, and that some of them do not have a long-term lease.
Although the plans set 125,000 square feet as the minimum, he said the company expects to keep more than that.
“Our goal and our priority is to maintain as much retail as possible, as much high-quality retail as possible into the future,” Gerrity said. “One of the main goals of the plan is to introduce alternate uses in order to bolster the quality of the retail that we have on the property and, as we’ve articulated over the past several years, that quality has been decreasing.”
Melin said he was not comfortable with allowing more than half the retail space to be cut. He said he is in favor of projects that blend retail and residential buildings, but that what Aspen Grove had proposed could be detrimental to the city’s sales taxes.
“I don’t want this property converted from commercial to residential, and with 125,000 square feet as the proposed minimum, well, I’m a ‘no’ vote at that point,” Melin said. “I need some assurance that there’s going to be more commercial square footage on this property.”
In response, Kevin Gerrity said the company would be willing to set the minimum at 200,000.
“We could raise that amount, but it means we’re focused on that minimum amount for the long-term,” he said.
When Melin asked why Gerrity was hesitant in raising the requirement when the company expects to exceed 125,000, Gerrity responded: “We’re talking about setting requirements for us. Currently, there are no requirements for square feet on the property. It’s us getting into a position where we don’t have the flexibility to make changes for a very long time.”
Melin made a motion to require Aspen Grove to keep 125,000 square feet of retail space for at least the first two years after construction begins, and at least 212,500 square feet after that period. But the motion failed to get support from the rest of the council.
“Residential gets us nothing in terms of financial benefits to the community,” Melin said. “I need to make certain that this development gets us healthy amounts, sustainable amounts of sales tax.”
Colby Young, Gerrity’s vice president of asset management, told BusinessDen via email Wednesday that the company will look at each planning area of the property with retail and residential space.
He said developing the property slowly, one section at a time, will allow the company to develop and attract suitable tenants as retail concepts change. But he said the zoning changes mean there will “always be over 125,000 square feet of retail at Aspen Grove.”
As BusinessDen previously reported, as recently as 2007, the mall generated sales tax revenue for Littleton in excess of $2.5 million annually, according to materials prepared by city staff. But that figure trended downward before plunging to just over $1.5 million in 2020 during the pandemic.
The city estimated that redeveloping the property would increase annual sales tax revenue to $2.34 million, saying nearby residences would bring in high-quality tenants and increase sales per square foot. If the property is not redeveloped, city staff estimated the annual revenue would continue to decline to about $900,000.
Rudnicki, one of the four yes votes, said he was in favor of the new uses and the plans for more open space at Aspen Grove, especially given its proximity to the RTD Mineral Avenue light rail station. He said the upgrades are needed.
Rudnicki said concerns residents had about increasing traffic on South Santa Fe Drive were not substantiated and that the city’s transportation experts had addressed those concerns.
“Why’s this site the boogey man for creating a traffic problem that already exists and will get worse?” he said.
Gerrity Group’s plans call for buildings that are 30 feet to 85 feet high, and the company — which paid $82 million for the property in 2016 — said it wants to make the mall easier to navigate for pedestrians and bicyclists. The firm indicated that development could also eventually include a hotel or other lodging property.
At a meeting in July, Gerrity said the redevelopment would be a slow-moving project. He said many retailers have evolved to doing business without much space.
“(The plans) just illustrate what could be done over long periods of time to meet the changing needs of retailers and the community,” he said. “The nature of retail we’re seeing now since COVID is changing so rapidly.”
One of the goals of Gerrity Group stated in its application for the project is to build a “diversity of housing options” for various age groups and income levels, although council members pointed out there are no formal requirements for them to build anything other than market-rate housing.
“Gerrity Group is reviewing a number of affordable housing options with experts such as (South Metro Housing Options),” Young said via email. “Because Littleton has not adopted regulations to guide the development of affordable housing, there is no real way to commit to anything at this time. However, we will continue to work with the city and other agencies to better understand and help meet the City’s affordable housing needs.”
Rudnicki said income-restricted housing requires subsidies, and Littleton does not yet have a framework to require such housing. Melin said he’s hoping that will come early next year, as the state passed a law allowing cities to require new developments to provide restricted-income housing.
Tenants at Aspen Grove include Williams Sonoma, Ulta, Pier 1 and Alamo Drafthouse Cinema.
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