The metro’s new frontier

As he pulled his sensible white SUV to a stop near the eastern edge of Aurora, Mayor Steve Hogan looked toward the horizon.

To his south, sat the northeastern corner of the city’s Murphy Creek development, a fairly typical Aurora subdivision and among the city’s newest. Behind him, to the west, was the Vista PEAK campus, home to the city’s newest sprawling high school, which is already adding space just a few years after opening.

Despite the signs of life, there’s a whole lot of nothing out there.

Looking toward the eastern reaches of

Aurora — and the metro area — the longtime Aurora pol’s thoughts were fixed, however, on what could be out on these rolling fields, a place that today is just prairie, dead-end roads and the occasional gas well. 

“As you can see, the edge of civilization,” Hogan said with a grin, peering through his windshield as the sun climbed into the eastern sky. “But Aurora goes eight more miles that way. There’s nothing out there, but it goes eight more miles that way.”

Nothing, yet
    
What’s coming will probably easily push Aurora into the Number One position for size and population in Colorado. And that’s without any talk about Amazon picking the now-number-three city as its next home for a second world headquarters.

This northeastern edge of the city near Denver International Airport — long-viewed as too far-flung from the city’s core and lacking the thoroughfares that big-time development demands — has in recent years become the hottest corner of the region when it comes to development. And with huge swaths of land, multiple nearby highways, ample water, an international airport and a commuter rail line, a building boom unlike Aurora has ever experienced could be in the offing.

Already, big names like Amazon and Walmart have chosen land near Interstate 70 for massive distribution facilities. And longstanding business parks like ProLogis and Majestic Commercenter have made huge investments, adding millions of square feet of warehouse and distribution space. That space includes the state’s biggest speculative projects ever, million-square-foot buildings popping out of the eastern plains before they even have a tenant as developers lay down a giant bet that paying tenants will be easy to lure.

Construction crews have been hammering away for months on the hulking Gaylord Rockies Resort and Convention Center, which will be the state’s biggest-ever hotel when it opens in 2019 and promises to lure billions of dollars worth of development to the rolling plains nearby.

South of the airport, often-unnoticed Jackson Gap Boulevard — the only entrance to DIA besides Peña Boulevard — is sprouting several booming parking structures as it chips away at an airport-parking market long dominated by Denver.

And a planned new housing development, The Aurora Highlands, would bring more than 20,000 homes to a 3,000-acre master-planned community near E-470 and I-70. It would be Aurora’s first master-planned community, and the roads the developers plan to cut to make it happen are expected to spur further growth near its edges.

Much of the new growth sits squarely in, or at least close to, the region’s broader “Aerotropolis” — the projects in Aurora, Denver and unincorporated Adams County all aimed at milking the area’s connections to nearby DIA. Development of that 21,000 acres seemed to stumble along for years, in part because of the economic downturn a decade ago. Now though, officials are bullish on the area.

In 2016, a Colorado Department of Transportation study said 18- to 32-million square feet of new commercial development could occur to the areas west and south of DIA in the coming years. That development could bring with it up to $630 million in tax revenue. By 2040, the study predicts there could be 74,000 new jobs at DIA. It also projects that an aerotropolis around DIA could attract 210,000 new residents and create up to 9,000 direct and 3,200 indirect construction jobs over 25 years.

Advocates for Aurora’s eastward expansion, Hogan chief among them, say it’s crucial to the city because it’s the only way a growing city can rake in the tax revenues it needs to pay for police, fire and other costly municipal services. Aurora needs to lure a diverse mix of big businesses. So, even if critics might say growth should focus on infill development that eschews this sort of “sprawl,” Hogan says this brand of expansion is Aurora’s best bet.

“If you can’t grow, you can’t provide the services,” he said.

In Aurora’s case, that growth is coming to what amounts to “fly-over country” — a vast corner of town that millions have driven through or flown over, but few have really noticed.

Colorado’s once wild east, is about to become tamed into exurbia.

“It’s all Aurora,” Hogan said as he cruised down one of those desolate northeast Aurora highways. “And people don’t know it.”

But that, Hogan said, is about to change.

No longer a controversy, Gaylord is a game changer

Parked on East 64th Avenue, Hogan looked north at a project seen by many as the catalyst for all of this northeast Aurora development: Gaylord.

Hogan has had as close to a bird’s eye view of the sprawling hotel as anyone. He has called this corner of the city home for a decade now, and that’s meant motoring past this construction site on a regular basis.

“It’s been fun to watch,” he said, a convoy of construction trucks moseying along 64th to and from the massive project. “It really has been.”

The hotel sits near 64th and E-470, an intersection that will one day be home to a new interchange allowing people to get to Gaylord from E-470 on the east side or Peña on the west.

More broadly, it sits in the proposed Aerotropolis, a stretch of Aurora, Adams County and Denver around DIA that all three jurisdictions are hoping to turn into a hub of development.

But the Gaylord project has hardly been an easy one to get off the ground. Not long after the project was announced in 2010, Gaylord officials announced they were getting out of the hotel development business. That made even Gaylord’s biggest cheerleaders here in Aurora skeptical. Hogan said that when Gaylord bailed on hotel development, he doubted whether the hotel would ever become reality — the lone time in the lengthy process he said his confidence waned.

Then the Rida Development Group — a deep-pocketed developer from Houston — stepped in and took over the Gaylord Rockies project. Rida’s involvement quelled many fears locally, but the project still faced challenges.

Worried what the massive new hotel would mean for their bottom line, some competition-leery Colorado hotel owners in Denver and Colorado Springs backed a lawsuit challenging the state tax incentives used to fund Gaylord. The battle raged in court and even in the state Capitol.

In the end, Gaylord and Aurora won everywhere, and crews broke ground on the project.

The Aurora Economic Development Council — the quasi city-run agency tasked with luring companies to Aurora — largely led the fight on the side of Gaylord. AEDC’s longtime leader, Wendy Mitchell, was the project’s loudest and most-unflinching backer.

Yuriy Gorlov, AEDC’s vice president, said the group backed the project so aggressively not just because of the obvious benefits of the project — it will mean thousands of jobs and millions in tax revenues. AEDC staked its reputation on Gaylord because the project’s effect on the city goes well beyond what will happen at the hotel and conference center, he said. The project itself — because of its size and the cache the Gaylord name brings — is a sign to other developers that the area is ripe for large-scale projects. It’s a catalyst for the rest of this corner of town, he said.

An Amazon river of opportunity?

Now, with construction well underway, already AEDC is hearing from developers suddenly interested in these wind-swept plains.

“Before everybody kind of raised eyebrows and everybody thought, ‘wow, way out there? Lets see if this happens,’” Gorlov said. “Now they say, ‘OK, Aurora can get it done.’”

While that distance between the edge of Aurora and the main hub of the region, Downtown Denver, can seem far, he said it never was a hurdle for city officials with a long-term vision for the city.

“It’s not that far,” Gurlov said. “And I think the city annexed it so long ago that this has always been in the strategic plan of the city.”

Now, AEDC is pushing this part of the city for what could be one of the biggest developments ever to choose the Rocky Mountain region: a second headquarters for Amazon. Cities around the country have been working overtime in recent months trying to lure the e-commerce titan to their zip codes and Aurora hasn’t shied away from that fight.

Amazon officials said in January that metro Denver, including Aurora, was one of the 20 cities around the country to make their shorter list of finalists for the new facility. The Aurora plan, officials said, is one of several metro area spots still under consideration.

Gorlov said the area has enough land that a company could easily plop down a campus of whatever size they choose, something few metro areas can really boast. Plus it would be close to the airport, commuter rail and multiple highways.

And water? Unlike anywhere but Denver and Colorado Springs, Aurora is swimming in it.

Aurora has already had some success with luring Amazon, snagging two of the company’s newest facilities to this corner of town in just the last two years.

“I think they can definitely see the opportunity out there and realize what we see every day,” he said.

Even if Amazon opts for a non-Aurora, or even non-Colorado locale — a probability Gov. John Hickenlooper was sure to brace the public for more than once — Gorlov said he’s confident development here will continue its pace going forward. While he couldn’t talk about any of the specific projects in the works, Gorlov said there will be more big names choosing Aurora in the coming months, projects on par with the recently-announced UPS and Walmart developments.

“This (was and will be) a tremendously good year for Aurora,” he said.

Aurora’s race to nowhere

As Gaylord slogged through a few years, it was hard not to imagine it would join a host of other projects planned, but never built, on these sprawling plains. Because, despite the recent successes out here, the development history of the area is dotted with failures.

The initial plan for Gaylord was for the National Western Stockshow Complex to join the resort in Aurora, but Denver officials, determined to keep that tourist-magnet, quashed that plan in a hurry.

And several times over the years, Aurora has tried and failed to lure a racetrack to the northeastern corner of town.

In 1999, opponents of a race track plan — backed by supporters of the now-defunct Pikes Peak International Raceway near Colorado Springs — pushed through a change to the city’s charter barring Aurora from using city cash to pay for a race track.

That slammed the brakes on race tracks for a while, but developers popped up about a decade ago with more headline-grabbing plans, only for those to fizzle out.

In 2015 city officials tried again, this time asking voters to lift that 1999 ban, only to fail.

Again last year city officials planned to go to voters to ask them to let Aurora launch an “entertainment district” out here, but scrapped the plan when a family emergency meant one of the officials expected to lead the campaign couldn’t.

And the list of eastern Aurora misses has to include Horizon Uptown. That project, from Australian development giant Lend Lease, was supposed to bring thousands of homes and businesses to a massive development near I-70 and E-470. But when the economy hit the skids in 2008, Lend Lease slammed on the brakes. The big green “h” they stuck in the ground near the two highways is still there, the houses just never grew up around it.

Lend Lease officials said last year that the project isn’t dead, but it is on hold.

Hogan said he isn’t sure what will come of  that project — he guesses Lend Lease either jumps back in and builds it, or they sell the land — but he’s confident the land won’t sit empty for long. As soon as another nearby development takes off, Hogan said Horizon Uptown, or a different project on that chunk of land, will join it. When they see another developer in action, Hogan said it has a way of spurring development types to get moving.

The city has seen that play out several times since council opted more than two decades ago to start moving further east.

“We went from nobody interested to everybody interested,” he said.

Hogan said that for a long time, city leaders viewed Buckley Road as a “blue line,” the point past which Aurora had no intention of developing. That thinking though raises challenges, he said.

If Aurora didn’t push forward and expand, someone else would have. That could have put the city in a tricky spot as a sort of larger Glendale — a smaller urban city surrounded on all sides by bigger cities. If that’s the case, Hogan said, Aurora still would have been on the hook for roads and other infrastructure inside the city limits, but a huge chunk of the motorists using them wouldn’t be taxpayers here, they’d just be passing through Aurora on their way to some other town.

Instead, Hogan said city officials view everything as far as the edge of Front Range Airport as ripe for annexation and development.

“We could see the potential for controlling the development of everything that happens south of DIA to I-70,” he said.

No water woes, but roads are rough

As he continued his cruise through these northeastern reaches, Hogan noted something of a quirk to this part of town. It’s dry, for sure. That’s obvious when you glance at the sea of brown and beige fields that stretch for miles. And no rivers or streams cut through here. There’s no large-scale reservoir particularly close, either.

But water, Hogan said as he eased his SUV back into traffic, isn’t much of an issue.

“Out here its not a question of water service,” he said. “It’s a question of roads.”

Water wars have been common throughout Colorado’s history. And Denver’s growing burbs, with their green lawns, have always irked water advocates in the state’s river basins. But as Aurora sets out to develop this arid chunk of desolate prairie, city officials are confident that years of long-range water planning have them positioned to avoid those fights of yore.

In 2016, the city adopted new policies ensuring Aurora has the water it needs now and in the future. At the top of the list is a measure that the city must aim to have enough water for at least 50,000 additional residents at any given time.

But even before then, Aurora set out to create smart water policies that now allow the amount of growth the city has in the works.

“Aurora has a stronger history than most cities in adopting proactive policies,” said Aurora Water Department Director Marshall Brown. “It goes all the way back to the 1950s when Aurora Water was created, because we used to be dependent upon Denver for water. Then, council adopted policies that said things like (it’s important to have) a diversified water portfolio, and also, (they) dictated that we would have a surface water-dominated system.”

While steeped in the jargon, those policies proved to be significant.

Aurora’s water supply is essentially dependent on runoff, but because Aurora has water rights in more than one watershed, Brown said the security is in the diversity.

“Droughts don’t typically affect those all at once,” Brown said.

And so, even though water is a finite resource, Brown said the thought of Aurora’s future as it pertains to water doesn’t keep him up at night.

“When Aurora has excess supplies, they can be leased to others, which can help stabilize Aurora’s water rates,” according to the Aurora Water Supply Fact Book. “Our top priority is ensuring we have adequate supplies for residents, so we have to plan our water supply system to meet demands during droughts. During those times, we also have the possibility to lease water from others.”

Half of Aurora’s water comes from the South Platte river basin, 25 percent from the Colorado River basin and another 25 percent comes from the Arkansas River watershed.

“If we were groundwater dependent, we’d maybe be out,” Brown said, explaining that groundwater is considered nonrenewable because it takes much longer to revitalize. Whereas, surface water is more replenishable.

A small portion of Aurora’s water comes from deep aquifer groundwater wells, and the city’s newest project, Prairie Waters, allows “the city to reuse its precious water supplies, increasing the overall yield of the system,” according to the fact book.

The next big focus for Aurora water will be storing it for a bigger population. Aurora will need three reservoirs, in addition to its existing 12 along the Front Range and surrounding mountains, by 2050. First up is the Wild Horse Reservoir in Park County, which will likely be completed by 2022. It’ll cost around $92 million to complete and will hold 32,400 acre feet of water.

In 2016, Aurora water spokesman Gregory Baker said Wild Horse has been easier to negotiate than other projects because it’s being built on private land. Then, the city was planning East Reservoir, which would have been just east of the Aurora Reservoir. But an underground storage facility has greater potential and can meet the same storage. So East Reservoir was nixed. The underground facility would be less expensive than a traditional reservoir and have less of an environmental impact.

Between 2025 and 2050 Aurora hopes to have another reservoir in Lake County, north of Twin Lakes, where the city owns land purchased in the 1990s.

“Permitting is tougher here since this is bordered by US Forest Service property, and may have jurisdictional wetlands,” Baker said.

While sitting in a good spot, the city continues to buy water rights. Just last month, Aurora announced another large-scale plan. This one riskier than most, pumping water from an underground reservoir near Breckenridge and cartwheeling around a bevy of environmental issues. If it works, this project alone could add water to the city’s portfolio for thousands of homes.

But with more growth happening across the Western U.S., those water rights are becoming more expensive.

“What’s hard to predict is when it comes counterproductive (to buy more rights),” Brown said. “We’ll see prices continue to go up.”

What impact that increasing price will have on growth is yet to be determined, Brown added.

But the policies help manage resources and growth and make sure each is in check with one another.

“If we don’t have enough supply for 50,000 people, that initiates a conversation with council,” Brown said. “And it’s not like 50,000 people are going to pop up all at once. We can kind of plan for it.”

And so growth will likely happen where it’s most feasible, he added. Existing water systems will be the springboard for growth. Hogan said that with the water future locked up, the challenge now is cutting roads through this sprawling stretch of prairie.

Chief among those will be improvements to Picadilly Road — which today is a hodge podge of two-lane paved stretches, dirt stretches and dead ends. But the long term plan in every eastern metro jurisdiction — Aurora, Denver and Brighton — is for Picadilly to be a massive six-lane boulevard connecting the southern reaches of Aurora with the northern burbs like Brighton.

Once that happens — and while it’s in the plans, none of the municipalities have dates set for when they will start work on improvements or when the road will be complete — Hogan said it will be a catalyst for more development.

“All the sudden it becomes attractive for development,” he said.

Further east is Jackson Gap Road.

The two-lane road — which sits east of E470 and runs north and south, largely parallel to the toll road north of I70 — long seemed to connect DIA with a whole lot of nothing.

But since it connects to DIA, a rarity for an airport about as far from the city’s core as it could be, local officials have always dreamed Jackson Gap would one day serve as a bustling thoroughfare.

That is finally starting to happen.

Two huge parking facilities are now up and running there, with the newest, Fine Parking, opening its doors in January.

An Aurora Highlands
to rival Highlands Ranch?

Headed south on the E-470 toll road, Hogan pointed out the obvious state of affairs for much of these eastern plains: It’s a whole lot of nothing these days.

Dry fields line either side of the highway. What little development there is sits hundreds of yards from the road so the homes blend into a sea of far-away gray as motorists hustle along. But this specific stretch of nothingness, near where the toll road is expected to one day connect with the eastern reaches of 38th Avenue, is particularly important to Aurora.

“This will be the northern entrance to Highlands,” Hogan said, pointing to a swath of land not far from one of the old E470 toll plazas.

That’s Aurora Highlands the mayor referred to, and it’s an ambitious project that, if it gets off the ground    hardly a guaranteed outcome for a project of its scope — would once and for all change the face of these northeastern reaches.

“The reality is, if that project goes forward, everything from 56th Avenue to 26th Avenue, and from here for three miles east, will be developed in the next 10 years,” he said.

The first phase of the development is expected to span 2,900 acres before growing to nearly 5,000 acres in later phases. Once it’s complete, the project could be home to as many as 23,000 families.

Developers say it would be akin to Highlands Ranch — a master-planned development that turns rolling plains into a thriving series of neighborhoods.

Developer Carlo Ferreira, the man behind Aurora Highlands, said he doesn’t dispute that the area is far, free of the sort of roads it needs and largely lacking much of anything.

“It is the prairie and it is an island unto itself,” he said. “And there were a number of challenges.”

But he sees those challenges as a blank canvas, one he and his team can use to create whatever they want. After all, Ferreira and his team already own all the land where Aurora Highlands will be. That means they get to make every decision from how many houses to build and what they will look like.

That sort of freedom, Ferreira said, means it can one day be like Denver’s Stapleton, or Douglas County’s Highlands Ranch, or Shadow Creek in Texas or Summerlin near Las Vegas

Those last two, Ferreira is pretty familiar with as he led the development of each. With Summerlin, he and his team turned a swath of bare desert in southern Nevada into the thriving 22,000-acre community that is now home to close to 100,000 people. Saddle Creek saw crews convert 3,500-acres of swampland into a bustling community outside Houston.

The biggest challenges facing Aurora Highlands aren’t swampland or sun-baked desert.

Instead, Highlands faces some challenges common to growth on Colorado’s plains.

For one, there just aren’t many roads, at least not many that connect the area to anywhere else in a useful way. Some of the roads cutting through are dirt, others stop before reaching other developments. That lack of roads is why the area has sat undeveloped for so long, Ferreira said.

Normally, developers wait for local municipalities to cut those roads. Then, when the major roads and infrastructure are ready, they move in and launch their project.

Ferreira is tired of waiting. In what he says is a rare move for a developer, the team behind Aurora Highlands is opting to build their own roads. And not just smaller residential roads either, they are building the major arterials that will make motoring around Highlands possible.

That would solve the road issues, but it doesn’t address the other big challenge Highlands faces: Oil and gas production.

Several developments along the Front Range have dealt with how close energy development can get to their housing stock. That tension only increased last year when a house near Firestone blew up, killing two people, when gas from a nearby abandoned well leaked into the home.

That has Ferreira worried about Highlands. Last year he tried to work with the oil producers who have the mineral rights under Highlands in an effort to minimize their above-ground efforts. But drillers largely balked at his plans, and now state regulators are expected to weigh in.

Growth raises serious school questions

A project the size of Aurora Highlands — one designed specifically to lure families to those new rooftops on the city’s northeastern edge — means the city’s schools must brace for a massive influx of new students.

At Aurora Public Schools, that influx comes at an already-challenging time. The district, the fifth largest in the state, is already faced with finding funding for millions of dollars in repairs that currently hasn’t been budgeted and the challenge of improving test scores, especially at 14 schools that are on the state’s accountability clock.

With the growth on the city’s eastern horizon imminent, APS is trying to play a balancing act between preparing to fund new schools and dealing with a backlog of existing infrastructure needs, said Anthony Sturges, APS’s chief operating officer.

In 2016 APS received a major boost from voters when a $300 million bond project was approved. And while those funds have and will continue to go a long way in meeting the district’s needs, APS has identified more than $500 million in repairs and building capacity to meet a growing student population.

“It is really a balancing act. You have to balance the needs for capacity improvement with the ongoing repair and maintenance needs. And to be honest with you, in the 12-plus years I’ve been in my job, we’re still not anywhere close to being able to sufficiently fund those needs,” Sturges said. “I think part of our future engagement with the city and our external partners, namely the developers and home builders, is how can we look at other funding streams. Maybe (using) some alternative funding streams, knowing that bonds probably won’t meet all of our needs moving forward. ”

While Aurora requires new residential developments of a certain size to dedicate land for a new school and provide road and utility access to the property, developers currently don’t face any impact fees that would help fund construction of new schools. But developers have been footing part of the bill for marketing when it came to the most recent bond initiative in 2016.

Sturges said even with the potential for another bond question in the future, APS may (in the future) ask the city to change that policy and add an impact fee into development costs to help construct new schools.

As of this school year, APS has planned for a future need of 22 schools near DIA and also southeast of the 470 and I-70 intersection. Josh Hensley, APS planning coordinator, said the district assumes for planning that for every two homes in a new development, one K-8 student will need to be educated.

“We need a new K-8 school for about every 1,000 homes. You can do the math. A K-8 school costs us about $30 million, that’s about $16,000 for each house to serve K-8,” Hensley said. “It’s a big task with the amount of development we’re looking at in the future. And it’s going to take cooperation with the city of Aurora, the development community and the community at large to meet those needs.”

Building new schools and maintaining existing ones is only one of the challenges facing APS with future development ballooning the size of the district. How does a district that is in the midst of trying to improve scores at many of its schools handle an influx of new students and facilities?

School district boundaries are defined at the state level and any change would need to be approved by the state Legislature. While APS Superintendent Rico Munn said future increases in students and schools would pose new challenges, he didn’t think APS would need to consider altering its boundaries to decrease its potential for growth.

“There are clearly districts across the country that are much larger than we are. There are already four (larger than us) in the state,” Munn said. “I think (altering the boundaries) is something that we don’t need to entertain.”

Munn said the projected increases would not hit APS all at once and instead would be a gradual build up as developments fill up with residents and new schools come online.

“It’s not like there’s going to be 10,000 kids showing up over one summer,” Munn said.

With the increase in students and size, there will be a new opportunity for APS to tell its story, Munn said. The district is faced with numerous challenges but also has shown improvements in recent years. In 2017, the district saw increases in its academic growth almost across the board. And other indicators of improvement, like decreases in suspensions and increases in graduation rates, makes Munn look forward to the future of APS and its projected growth.

Whatever form the city’s eastward growth eventually takes — be it Highlands becoming a hub for additional residential growth, or maybe Horizon becoming reality, or just a steady hotel boom around Gaylord — Hogan said the complexion of this corner of the city will change mightily.

Hogan said he views all of the city’s large-scale projects as “activity centers.” One of those is the Anschutz Medical Campus, one is Southlands Shopping Center, The Havana Business Improvement District is another as is City Center and Town Center at Aurora.

In a few decades, there will be several more in Highlands and other developments on the eastern edge.

Eventually though, this sort of development will coalesce around something Aurora has long lacked, he said.

“It will continue to develop that way until somebody decides that they want to build a downtown,” he said with a shrug of his shoulders while standing in a field off of East 56th Avenue. “And don’t ask me where that is going to be.”