Photo: Courtesy of Westword

Escalating property values, especially residential, are threatening small, local area retail, driving out long-time neighborhood businesses in south Denver. There is a growing incentive to sell for more profitable alternatives which are transforming the local restaurant and tavern scene.

Under a section of the Denver property tax law known as the Gallagher Amendment, commercial properties shoulder 55 percent of the property tax burden and residential properties cover 45 percent. This law also locks the commercial property tax rate in at 29 percent, while the residential property rate fluctuates to maintain the balance. The amendment, passed in 1982, was intended to protect residential property owners, but as home values in Denver have skyrocketed, it has pushed more of the tax burden onto businesses. Despite having some of the highest property values in the country, Colorado as a whole has some of the lowest residential property taxes.

Add in the increased $15.87 minimum wage by 2022 in Denver and there is a wave of small, family operations closing and turning over due to the rising cost of doing business in Denver. The Campus Lounge, Govnr’s Park Tavern, Morning Collective and Platt Park Tavern are just a few of the restaurant/bar operations that have closed during the past year.

The latest impacted business is Bonnie Brae Tavern, a pizza and tavern fixture located across the street from the Campus Lounge (re-opening January 29th under new ownership). The family-owned tavern has been part of the Bonnie Brae neighborhood for more than 85 years, but a growing property tax bill looks to be bringing an end to their run.

According to Denver 7, Bonnie Brae Tavern owner Mike Dire said it comes down to property tax. The property has been assessed at a value of $1.9 million.

“We just got it today (tax bill), and I’ll total all the property tax — $73,000,” Mike Dire said. “If we were some of these people that paid $10,000 a month for rent, we would never make it.”

That’s a lot of pizza and beer.

And the future use for the Bonnie Brae Tavern site? Plans show 43 condos on the top two floors, ranging from 650 to 1,940 square feet, and four 400-square-foot retail units on the first floor.

Retail locations on University & Evans, South Broadway, Gaylord and Pearl streets around the DU campus will continue to close, churn and/or be converted to apartment units and homes reflecting the ‘highest and best use’ for these properties. And national chains are likely to be the few retail survivors.

All this neighborhood transformation is happening despite the growth in population, affluence, and density in the City of Denver. And the ultimate result is a loss of unique, one-off businesses in the city of Denver.

Surely, changing consumer tastes, lifestyles, and buying habits account for many of these changes as well. But in the end, continue to look for more turnover and closings of small family-owned restaurants and taverns going forward as small Denver retail proprietors are unable to keep pace with the changing city landscape.