Developers and neighborhood leaders in Denver fear the push for warehouse space for medical-marijuana growing operations will stall efforts to turn industrial areas into trendy, urban art districts with lofts.
They say the surge in grow operations will reverse a decade of work aimed at transforming blighted areas into walkable pockets of new urbanism, such as the emerging arts district surrounding Brighton Boulevard north of downtown.
Instead of lofts, coffee shops and art studios, they predict the grow operations will create a situation where drab warehouses protected by rusty barbed wire end up as king of the city block.
But medical-marijuana proponents fear new proposed regulations will stifle an emerging economic power they say is propping up an ailing real estate industry.
Denver City Council members are divided on what to do. Councilwoman Judy Montero wants her colleagues on the council to rescind a surge in agricultural husbandry permits that the city issued for grow operations. She also is pushing for new regulations on the growers.
"This is going to be a huge, huge fight, a clash of the titans fight," Montero predicted.
"We are at a tactical turning point for the futures of these neighborhoods," she said. "They are doing their best to turn around, to get the community that they want, to get something that is not hard-core industrial."
On the other side, Council President Chris Nevitt and Councilman Charlie Brown view Montero's proposal as a major intrusion into private-property rights. Nevitt also is worried about setting a precedent that could harm new warehouse marijuana grow operations popping up in his council district in south Denver.
"I'm looking at these things as an economic development engine at a time when most businesses are flat-lining," Nevitt said.
The council likely will tackle Montero's proposals in committee as early as next month.
"The issue is simple," Brown said. "Are we going to end up zoning someone out of business who has invested, in some instances, hundreds of thousands of dollars?"
Mickey and Kyle Zeppelin, a father- son development team, view the warehouses that house the new grow operations as a potential blight. They fear the grow operations will harm their Taxi development along the Platte River, where they transformed land surrounding a once-shuttered taxi dispatch center into an urban oasis of eclectic shops, technology firms and residential lofts.
In a letter to the council, Curt LeRossignol defended his River North Properties five-year lease that provided warehouse space along Brighton Boulevard to a cooperative of marijuana grow operators. He told the council the total rent payments of $48,750 each month allows River North to weather the economic downturn that he said stalled the firm's plans for an upscale condo development.
"As we all know, in these tough times, we've all been enduring. It takes money to make the wheel spin and see improvements happen," LeRossignol said in the letter. He did not return telephone messages seeking comment.
The push for warehouse space for grow facilities is fueled, in part, by a new state law that requires medical- marijuana dispensaries to grow 70 percent of the product they sell.
City officials say a preliminary review shows that in 2009, the city issued about 10 agricultural husbandry permits. By Oct. 27 of this year, the city had issued at least 250 permits, with the surge occurring mostly in June and July after the new law took effect.
Such permits are allowed only in areas zoned for industrial uses. With industrial areas shrinking in Denver, the medical-marijuana industry ended up also seeking permits for areas targeted by city planners and neighborhood activists for transition from straight industrial uses to mixed-use areas where new residential, retail and office space is going up next to auto body shops.
An overhaul to the city's zoning laws, approved by the council at the end of June, was intended to clarify the future land use for those areas. That overhaul rezoned large swaths of land in the city to encourage such mixed-use development.
When it passed the zoning overhaul, the council also passed a six- month transition that allowed developers to pursue new development under both the old zoning categories as well as the new ones until the end of this year.
Montero said the large-scale grow operations are inconsistent with the new land-use laws that the council approved. She said the marijuana growers should have known they were taking a risk when they moved into areas where residences are going up.
Nevitt, though, said the grow operations are less intrusive than other industrial operators in the areas drawing Montero's concern.
He added that the state law requiring dispensaries to grow 70 percent of their own marijuana means the city needs to support a robust network of grow facilities.
"If you said every restaurant had to grow its own food, and then you said you couldn't grow any food in Denver, you would kill all our restaurants," Nevitt said.
By Christopher N. Osher
The Denver Post
November 21, 2010