From the May 23, 1999 Rocky Mountain News:
By John Rebchook, Denver Rocky Mountain News Real Estate Editor
More than 45,000 homes and apartments with an estimated value of $9 billion will mushroom on the prairie along the E-470 corridor over the next 25 years.
Real estate experts contend that the toll road connecting the southeast suburbs to Denver International Airport provides a road map for the biggest residential building boom the metro area has ever seen.
The 46-mile road runs from the intersection of Interstate 25 and County Line Road north to East 120th Avenue. The 12-mile link from Smoky Hill Road to DIA opened on May 3, two months ahead of schedule and $60 million under budget.
The beltway was first discussed in 1958 by transportation and growth experts, but the first segment of the road -- five miles between I-25 and Parker Road -- didn't open until 1991.
To put the looming housing boom into perspective, Mike Rinner, a senior analyst at the Englewood-based Genesis Group, noted that $4.5 billion in new homes were sold in the six-county area in 1998. Another way to look at it: The building boom will surpass the $5.3 billion it eventually took to build DIA.
Of course, the building boom won't happen overnight -- or in one year or even the next decade, for that matter.
It is amazing, though, how fast agricultural land near the toll road is being gobbled up by home builders, said Jo Ellen Snell, manager of business development for the E-470 Public Highway Authority.
"I'm really surprised how quickly development is taking place," she said. "A great construction boom is going on."
Genesis has tracked more than 20 housing communities either under construction or planned along the beltway between I-25 and East Jewell Avenue.
The prairie eventually could house 46,676 single-family homes, apartments and townhomes. A rule of thumb is that 30 percent to 35 percent of them will be apartments and townhomes, said Steve O'Dell, a senior vice president for the land service group at Grubb & Ellis.
The average price of a home built along that corridor will be at least $250,000, estimated Jeff Whiton, president of U.S. Home Colorado, which already is building two large, master-planned communities that will have a completed value of more than $1 billion.
That would put a completed price of about $7.7 billion on the more than 31,000 homes that ultimately will be built.
In addition, more than 15,500 apartments eventually would be completed, at an average price of at least $90,000 per unit, said Jeff Hawks, an apartment expert at Grubb & Ellis. That translates into $1.4 billion in apartments.
Cheri Meyn, owner of the Genesis Group, said the beauty of the E-470 corridor is its easy access to major office markets, such as the Meridian International Business Center in northern Douglas County, as well as to the office and industrial parks being constructed near DIA.
About the only large employment center it doesn't serve is downtown Denver, Rinner said.
"It's still a long commute to the central portion of the metro area from E-470," Rinner said.
Along the E-470 corridor, homes can be found priced from the low $100,000s near Interstate 76 north of DIA to homes priced at more than $500,000 to the south. Most real estate activity is taking place to the south right now.
"Really, you've got the whole price point from the low $100,000s to $500,000 and $600,000," said David Mandarich, chief operating officer and executive vice president of real estate for M.D.C. Holdings Inc. M.D.C. is parent of Richmond American Homes, the largest home-building company in the metro area.
Like many builders, Richmond already has staked claims along the E-470 corridor. "E-470 is going to be a tremendous catalyst for the growth of that area. I think it is going to be fabulous for Aurora, Denver, Arapahoe County and Adams County," Mandarich said.
Experts say the E-470 corridor is poised to supplant Highlands Ranch as the dominant housing market in the coming years.
"You can't really go west (of Highlands Ranch), because that is pretty much built out, and Chatfield Reservoir is a big physical barrier," Meyn said. "The next logical place to jump is the E-470 corridor, which is not very far away as the crow flies."
And Shea Homes, owner of the undeveloped land in Highlands Ranch, has dramatically slowed lot sales to competing builders, making E-470 an attractive alternative to Highlands Ranch.
"I think that what everyone is betting on is that it will be the No. 1 alternative to Highlands Ranch, especially now that Shea Homes is basically not selling any more land to other builders," said Patsy Duke of AirPhoto USA, which provides aerial and digital photos to the real estate industry.
E-470 will shift much of the building from Douglas County, said Jeff Whiton, president of U.S. Homes Colorado.
In other words, E-470 will fulfill the dreams of DIA by shifting metro growth to the northeast from the congested southern suburbs.
"Aurora and Arapahoe County in the near future will become the leader in building permits (issued) in the Denver metropolitan area," Whiton said. "I expect the Douglas County market to taper off and not grow as much as it has. But over the next 25 years, Aurora and Arapahoe County will redefine themselves."
He noted that in his Saddle Rock project, about a third of the homes already have been built at an average price of $425,000.
And at his Heritage at Eagle Bend, an active retirement community, the average price is $250,000.
"Overall, I think the average price of homes being built in the area will be in the $250,000 to $300,000 range," Whiton said. Indeed, the high price of homes is giving some builders second thoughts about constructing homes along the corridor.
For consumers who can afford to live there, the E-470 corridor has a lot to offer.
Last March, Ken Lanier, a former Denver Broncos lineman, moved into a 3,800-square-foot home on a half-acre in Saddlerock North, near Smoky Hill Road and E-470.
Last December, Lanier bought a Pak Mail store at Smoky Hill and Orchard roads, five minutes from his house.
"It's still a new subdivision, so there is a lot of construction traffic," Lanier said. "I think that down the road, it is going to be a real nice community. It's easy access to schools and work for me. I can take E-470 to get to Park Meadows in about 10 minutes. It's 15 minutes to the airport and it is 10 minutes to I-70, if I'm going out of town."
He also has views of the Front Range, he said. There are also a lot of children in the neighborhood for his two boys, ages 10 and 12, to play with. In the coming years, many more people will be living near him on his not-so-little house on the prairie.
Over the next 25 years, Aurora's population of 256,000 is expected to grow by 70,000, said Frank Ragan, Aurora's manager of operations.
"I would venture that 75 percent or better of our growth will be coming from a mile of either side of E-470," Ragan said. "In fact, it's probably closer to 90 percent of our growth."
He said he isn't worried about having enough water for the houses springing up.
"Most of our water is Western Slope water, and we always have enough on reserve for an additional 50,000 people," Ragan said.
The water gets to Aurora through a system of rivers, reservoirs and pipes.
As the population increases, the reserves will be increased to maintain that 50,000-person cushion, Ragan said.
"We would have to get a sustained drought of two or three years before it would become a real problem," he said. "And then we would institute water restrictions, such as restrictions on days when you could water your lawn."
In recent years, Aurora has encouraged bigger and more expensive houses in the city.
That, along with the rising cost of buying finished lots, has made it difficult for builders to make their homes affordable, especially on the southern portion of E-470. Land is considerably cheaper north of DIA, but communities in Adams County also are looking to change their image by encouraging bigger homes.
"We're looking for some opportunities out there," said Dennis Welsch, president of Kaufman & Broad in Colorado, one of the area's largest builders.
"I think it has great potential. The question is how an affordable product can be delivered," Welsch said. "It's a real obstacle. Housing prices out there might be getting too high for the average consumer."
Shea Homes, developer of Highlands Ranch, is one of several builders that is actively pursuing land purchases along the corridor.
It has placed 400 acres near Smoky Hills Road and E-470 under contract, and expects to close on the deal in January.
"Currently, we're in our planning and design stage," said Joe Blake of Shea Homes. "We're looking at homes in the range of $150,000 to (more than) $300,000. We're delighted with E-470's proximity to DIA and the Denver Tech Center."