Denver City Council approves $15.5 million tax break for Rossonian Hotel development

Denver will reimburse developers working on reviving the Rossonian Hotel up to $15.5 million in sales and property taxes after the council approved the urban development proposal during its meeting Monday.

The decision comes after Denver Urban Renewal Authority found that the site was “blighted,” meaning there are unsafe living or working conditions and environmental contamination.

DURA recommended the city allow “tax increment financing,” or TIF, to remediate those problems and get the project off the ground.

“This tax increment financing is one of the final pieces that makes the Rossonian possible. Without it, this project does not happen,” said Paul Books, one of the owners of the building. “But with it, we are working through the last remaining steps to break ground this summer.”

The project, in the Five Points neighborhood, is part of the Welton Corridor Urban Redevelopment Plan. The six-parcel property is in the namesake intersection of Welton, 27th and Washington streets.

The building, once called the Baxter Hotel, was a popular event space for jazz performances between the 1930s and 1950s. Performers such as Duke Ellington, Ella Fitzgerald and Billie Holiday took the stage there. It is on the National Register of Historic Buildings. The building has been vacant since the 1990s.

Palisade Partners, who purchased the property in 2017, plan to build 126 hotel rooms, a restaurant and an event space. They will also construct a new 8-story building between the Rossonian and the Hooper building as part of the redevelopment.

“We’ve concluded that the project does require assistance in order for it to be delivered as it has been contemplated,” said Bill Pruter, executive director of DURA.

Tax-increment financing, which is essentially a tax break or subsidy, allows developers to freeze how much is paid in property or sales taxes at a base level for up to 25 years, and then reinvest what would be paid above that back into certain elements of their projects.

For this project, the developers will be able to reinvest up to $15.5 million — which would otherwise go to the city’s bank account — into their project.

The city will reimburse the tax dollars for specific project costs mostly related to rehabilitation of the building. That includes up to $6.7 million on the plumbing and HVAC work in the new building and up to $2.3 million on the visible structure of the Rossonian Hotel.

The city will also reimburse up to $155,000 for “project art,” according to a presentation from DURA. DURA requires that 1% of the project’s costs be spent on art.

The tax freeze will last until the $15.5 million is reimbursed or in 25 years, whichever comes first.

“This project will bring new life to one of the most important corners in our neighborhood while preserving one of Denver’s most iconic cultural landmarks,” said Norman Harris, executive director of the Five Points Business Improvement District.

The total project is expected to cost $101 million and to be completed in 2028.