Malled!

While Crossroads died, FlatIron Crossing was born. The area was ripe for a regional mall. "They understood that they had the emerging Superior," says CU's Byron Koste. "The area supplied expensive housing that grew up overnight. All of a sudden, there were a couple of thousand new homes, all $400,000 to $600,000; the people who lived there were often dual-income with a disposable income to die for; and [developers] gave them a mall right down the street where they could spend it."

FlatIron was not only an aesthetic offense to Boulder's environmentally focused policy, but an economic barb as well. In 2001 and 2002, Boulder felt a sudden bloodletting of sales-tax revenue -- what city economic strategists refer to as "leakage" or "retail outflow" -- that has only recently slowed. Other cities felt the pinch, too. "The economics of it for the city is clear," Koste notes. "You don't want your residents running across a jurisdictional boundary and spending their money in somebody else's limits and that city gets the sales-tax bump. So they're vitally important for the community."

For Broomfield, FlatIron was a bonanza. The sales-tax collections have helped the city pay for more open space, new city buildings, state-of-the-art recreation centers and a strong police and fire force. While nearby cities had to tighten their belts in the early 2000s, Broomfield was relatively awash in revenue. Since it opened, the entire FlatIron District has generated $79.7 million in sales tax -- but not all of that has ended up in city coffers.

To score the three large projects, Broomfield granted the developers a big-money incentive in the form of a $135 million abatement on future sales-tax revenue earned by the district, according to Greg Demko, finance director for the City and County of Broomfield. Since the district was four miles away from the city's core, it required a huge amount of new public infrastructure: roads, streetlights, sidewalks, sewer and gas lines and highway interchange upgrades. The developers subsidized the city while it created that infrastructure; so far, Broomfield has rebated $37.5 million back to the developers. But Demko is quick to point out that this wasn't a flat-out subsidy to line the developers' pockets. "They are paying all of their property taxes," he notes. "It's not urban renewal; this is a development agreement with share-back revenue they produce."

And even with the rebate, the $42 million retained by the city over the period accounts for 52 percent of Broomfield's sales-tax collections, doubling the cash in city coffers. If the mall's sales tax continues at current rates, Demko projects, Broomfield's debt will be paid off by 2022 at a total cost of $282 million.

According to the International Council of Shopping Centers, a non-profit trade group for retail developments, FlatIron took in $12 million in 2004, about $398 per square foot. The national average for enclosed malls was $366 per square foot. FlatIron has a 98 percent leased rate, says mall spokeswoman Heather Dray, "which is higher than the national average." But that percentage doesn't include anchors or the now-vacant Lord & Taylor. It also doesn't seem to reflect the mall's outdoor section, The Village at FlatIron Crossing, which has been struggling to attract and retain tenants since the mall opened.

One weekend afternoon, a young woman and her mother strolled past the valet-parking kiosk into the outdoor segment of the mall, which was designed to resemble a European village.

"Are they closed, too?" she asked, peering into a shuttered storefront.

"Maybe they were too expensive," the mother offered. They both turned and looked across the corridor at another store where a large sign pronounced "Going out of business. Everything must go."

That space is now a seasonal Halloween costume shop.

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Larkridge is set to open on October 20. Months before, the home site of Jordan Perlmutter & Co. featured a banner ad with a bulldozer pushing a pile of dirt and the question "When was the last time you felt the earth move?"

The earth is certainly moving in this part of the metro area -- and not just because of Perlmutter's development. Taking note of the transportation confluence of I-25, Colorado 7 and the recently completed E-470 interchange, retail developers have spent the past two years securing prime tracts of commercially zoned property that could provide convenient shopping for all those future consumers driving along I-25.

The borders of three cities and three counties converge here; all are racing to put the next big regional mall project on their side of the fence. Although some experts already consider this market oversaturated with retail, developers and municipalities alike are confident that the tenant mix at each project will be sufficiently unique to serve non-competing segments of the marketplace. These regional retail centers not only expect to pull the "underserved" customers from the 120,000 housing units already within a ten-mile circumference of the interchange, but they're betting that the retail and office developments themselves will spur an influx of new residents to the area.