ULI Colorado Blog

Smaller Floor Plans, Focus on Customer Experience Help Reinvent Retail in Denver

by Kathleen McCormmick

This article originally appeared in Urban Land Magazine

James McCandless, director of strategic partnerships for 505 Design, a Boulder-based design and architecture firm, presenting at a ULI Colorado event at the Dairy Block in Denver. (Tari Ensign/Ensign Shaffer)

Retailers are focusing their physical presences on offering excellent customer service and curation of products, said panelists at a ULI Colorado event in Denver. The event was held at the Dairy Block, an example of new retail projects that are animating both commercial and public spaces with experimental and experiential places for people to shop, eat, drink, be entertained, and find community.

“Bricks-and-mortar retail is not dead—it’s undergoing an evolution that some call a renaissance,” said Brad Wilkin, ULI member and president of Wilkin & Company, speaking at an event at the CTRL Collective, a coworking space at the Dairy Block, located in the historic LoDo neighborhood of downtown Denver.

McWhinney, Sage Hospitality, and Grand American Inc. redeveloped the Dairy Block, which occupies a full city block, adaptively using the former Windsor Dairy and a firehouse building and constructing new hotel and office buildings with retail on former parking lots to create a mixed-use “micro-district.” Still partially under construction, the Dairy Block features 250,000 square feet (23,200 sq m) of LEED-Gold office space, the independent 172-room Maven Hotel, and 392 underground parking spaces. The 73,000 square feet (6,800 sq m) of retail space, 90 percent of which is leased, is located on the ground floor of the connecting hotel and office buildings and in an activated pedestrian alley that features local artisan food, drink, and “maker” shops.

“Average is over, and developers are craving a customized and dynamic experience inside their retail projects,” said moderator James McCandless, director of strategic partnerships for 505 Design, a Boulder-based design and architecture firm and coauthor of Vibrant Streets Toolkit. McCandless said that successful new retail spaces are “crafted, curated, and choreographed” down to the smallest details for space programing, restrooms, and other elements.

An alley way within the Dairy Block with additional retail and dining space. (Jenna Sparks Photography/Denver Milk Market)

“The food shift that happened ten years ago is now happening in retail,” said McCandless. “It’s all about hospitality.” Retail projects must be “expressive, specialized, exceptional, and unique.” One 505 design is Rayback Collective, an adaptive use of a Boulder plumbing supply building as a craft-beer lounge and event space that features large garage-door window-walls opening to a beer garden with a firepit, picnic tables, and food trucks. “It’s the new backyard for Boulder,” he said

The popularity of food halls continues, McCandless noted. “They’re replacing restaurants. People like them because you don’t have to commit to one kind of food.” Five food halls are located within a mile (1.6 km) of the Dairy Block, he said, and 102 food halls were opened nationwide last year with only two failing. “Fit, food, and fabulous” was his menu for vacant retail. “If you need to get a space leased, try to pull from one of these three food groups.” And know your market: “If you do well in Portland or Austin, you’ll do well in Denver.” In all three cities, people might spend $10,000 on a bike while wearing a ten-year-old Patagonia jacket, he said. “People spend their money on gear and experiences.”

From left to right: Panelists Frank Bonanno, founder and president of Bonanno Concepts, Kate King, co-founder and operating manager, Go Far Shop, Sarah Nurmela, real estate and development manager for Westminster, Colorado, and Vince Kadlubek, cofounder and CEO of Meow Wolf, speaking at a ULI Colorado event. (Tari Ensign/Ensign Shaffer)

Bonanno Concepts founder and president Frank Bonanno, a Denver chef who previously developed ten restaurants, discussed his development of the new Milk Market, an 18,000-square-foot (1,700 sq m) marketplace cornerstone within the Dairy Block that features a mix of dine-in and take-away food and drink. “We’ve got 2,000 to 3,000 customers per day, and I’ll bet 80 percent have never been to one of my restaurants. This is a new audience,” Bonanno said.

“We wanted that Eataly experience—eat and take some fresh pasta food with you,” Bonanno said about being inspired by visiting a New York location of the renowned international food establishment. But he said Milk Market, opened in June, is a fresh concept because one person owns and operates all the food venues. “I’m a cook and I like to try new things. It also made sense as a business model” to have one central purchasing and supply entity for multiple venues. Bonanno said the neighborhood’s density and the urban expectation of adventure are contributing to Milk Market’s success.

“Retail is attracting office” in a strategic redevelopment of a dead mall site into a new downtown for the city of Westminster, Colorado, said Sarah Nurmela, real estate and development manager for the city. “As a mall, this was the place to be—it was the civic and social center of the community.” Located adjacent to the U.S. 36 transportation corridor connecting Denver and Boulder, the 105-acre (42 ha) site is adjacent to bus rapid transit and a future commuter-rail station and is planned for 1 million square feet (92,900 sq m) of retail within 6.5 million square feet (604,000 sq m) of mixed-use development. The city spent ten years trying to revive the mall, and ultimately bought the site and demolished the buildings. It has invested $100 million so far on land and planning and development for new infrastructure.

An art exhibit from Meow Wolf Santa Fe, New Mexico. (Kate Russell)

“We’re not looking to replace big boxes,” said Nurmela. “Our retail is focused on experience and is curated. Anchors are small but impactful, and they’re close together to create a critical mass” linked by 18 acres (7.3 ha) of parks and open spaces, including a $4.7 million central square that is hosting regional festivals. In the first phase of construction, development is concentrated on providing dining and services for an eventual 12,000 people who will work and 5,000 people who will live there. An Alamo Draft House and theater, an Origin Hotel combined with a food and wine market, and 255 market-rate and 118 affordable apartments are due to be completed by late spring 2019. Development one block at a time will create a civic, cultural, and economic hub over the next 15 to 20 years.

“Retail is about creating the experience,” said Kate King, cofounder and operating partner of the Go Far Shop, an independent active-lifestyle store located on the Pearl Street local retail corridor in Boulder. “We need more brick-and-mortar that provides a great customer experience and makes people want to leave their homes and come shop.” Go Far has curated 20 local and national sportswear brands that express “a wholistic environment for active bikers, hikers, and yogis,” she said. “We wanted to make sure the partnership reflected Boulder, and our brands understood our mission.”

Opened in November 2017, the interior of the 2,200-square-foot (204 sq m) shop has a sleek modern look with a kitchen and bar available for rent by a barista or smoothie operation. “People really crave connection more than ever,” said King. “We wanted to cultivate an inclusive community with exceptional customer service where everyone was welcome.” The shop is the only one in Colorado and one of the few in the United States to make 3-D custom insoles with a machine developed by Superfeet and HP. The shop also had a local artist design a trail map. “Tourists absolutely love this,” she said. “It says we want to help you go out and play and have fun.” Go Far also collaborates with local nonprofit organizations, such as a 1,000-member running group, which brings runners into the shop.

“The internet has allowed us to think about the world in completely different ways,” said Vince Kadlubek, cofounder and CEO of Meow Wolf, a retail and entertainment venue in Santa Fe, New Mexico, that has inspired a new highly anticipated Meow Wolf for Denver. Started by members of an art collective who pulled materials out of Dumpsters, Meow Wolf was launched as an all-ages immersive multimedia experience in a Santa Fe warehouse, then moved to a vacant 30,000-square-foot (2,800 sq m) former bowling alley. It also has a music venue, a bar, and a food truck. Opened in 2016, Meow Wolf has drawn 500,000 visitors paying up to $25 for admission and has earned $14 million in merchandising.

“People are craving a shift in reality, and they’re willing to pay,” said Kadlubek. The consumer “doesn’t really want the product. They want the experience. That’s our basis for Meow Wolf.” Describing the venue as part of the “transformational economy,” he said Meow Wolf is successful because it offers “the possibility of self-direction and discovery. It’s up to the consumer to experience, and it awakens the scientist inside us. The product is secondary to the experience. The design of the retail space is the thing people love.”

The Denver Meow Wolf is being planned for a new 90,000-square-foot (8,400 sq m) building in the Sun Valley neighborhood, next to I-25 and Mile High Stadium. The estimated $30 million project will be developed initially with work from 150 local artists expressing “authenticity, creativity, equitability, and new ideas,” Kadlubek said. “I’d like to see experience and storytelling brought into more projects. We tend to separate entertainment, and I’d like to see it more integrated in our lives.”

 

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