16th Street Mall reaches tipping point as business frustration grows with delayed renovations

Sunday, June. 23, 2024

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Shyam and Shanti Shrestha have seen Denver’s 16th Street Mall change dramatically in the years since they opened Mt. Everest Imports of Himalaya in 1995. They were around when the Denver Pavilions was built in 1998, when the mall was extended to meet Union Station in 2002, and when the 2014 Union Station redevelopment sparked a downtown building boom. 

But today, the Shresthas say they wonder if their business will survive the current, seemingly interminable renovation of the 16th Street Mall and, if it does, whether it will fit in as a new version of downtown takes shape. 

The 16th Street Mall may be one of the most iconic stretches of real estate in Denver, but its status as a retail hub and public hangout has been threatened by the massive — and delayed —  reconstruction project that pedestrians have experienced as a stifling maze of construction fences and detours for nearly two years. Large national chains that for decades anchored the mall, including McDonald’s, TJ Maxx, Hard Rock Cafe and Banana Republic, shuttered their stores, along with local retailers such as Tea With Tae Cafe, citing factors ranging from declining sales to public safety.

Ongoing construction, fluctuating public transportation options, and concerns about safety are just a few of the reasons why pedestrians are avoiding the mall. Together, these factors could reshape the mall’s landscape long before the final pavers are replaced along the 13-block stretch of downtown. 

An evolving hallmark

The 16th Street Mall was once a hallmark of the city’s growth. When it was built in the 1980s, it gave workers in the Central Business District a reason to stay downtown after their shifts. It also created an attraction that welcomed millions of tourists and helped fuel the growth of Denver’s transit lines. 

That function seems to be changing, at least in theory. Denver has floated two seemingly contradictory ideas for the mall’s next phase. On one hand, the city wants to add apartments and playgrounds to attract families. It also wants to expand its retail and entertainment options to attract tourists. 

However, appealing to families and tourists alike requires the city to create a distinct space on the mall for each group, which could complicate its overall synergy. This is all happening at a time when the city’s downtown office vacancy rate is at a historic high and pedestrian visits to downtown seem stuck well below pre-pandemic norms.  

So, how can Denver balance its two visions of the 16th Street Mall? 

Sarah Wiebenson, vice president of economic development at the Downtown Denver Partnership, says it’s about highlighting the mall’s “individual character” to create a distinct sense of place that could attract new residents. One such place is near Skyline Park, where roughly 400 housing units could be added in an area of town currently dominated by offices. Great Outdoors Colorado on Friday announced a $1 million grant to the city for improving the park, which spans three city blocks along Arapahoe Street between 15th and 18th streets. The hope is redesigning the space to create better opportunities for year-round recreation and community connection will provide “a catalytic spark that adds vibrancy to Denver’s downtown,” Jolon Clark, the city’s Parks and Recreation director, said in a news release.

DDP also envisions adding urban grocery stores nearer to Broadway along with amenities like day care centers, dog groomers, dry cleaners and “whatever people need within a walking distance” of their home, Wiebenson said. 

But the uniqueness and sense of place Wiebenson refers to seem to be what’s at risk amid the massive facelift project as business owners like the Shresthas struggle to stay afloat. 

“Maybe we can survive until July,” Shyam said, referring to the date that construction near his store at the corner of 16th and California streets is supposed to be completed. “But at this point, I don’t know.”

A tale of two malls

Shyam Shrestha says he and his wife chose to open their store at the corner of 16th and California because it was the best place for retailers at that time. Mt. Everest Imports of Himalaya sells cultural gifts like woven tapestries, religious idols and Tibetan prayer flags. 

Over the past 29 years, Shyam says his store has attracted customers from as far away as Nepal. “When they come to Colorado,” he said, “they come to see us.” 

But those days feel like a distant memory. Shyam says the store’s sales have declined by roughly 50% since work began on the mall in late 2022. As construction crews have worked to relocate underground utilities and upgrade the water and storm sewers just outside of their store, the Shresthas say they have had to use roughly $60,000 from their retirement accounts and max out a credit card to keep the business open. Sales have been so slow that they’ve also delayed making payments on more than $75,000 of inventory that they purchased earlier this year. 

When construction started, Shyam said Mt. Everest received a $2,000 mitigation grant from the city. They received another $15,000 stabilization grant in February. But he said the money didn’t go far given their overhead, which includes monthly rent of $6,000. Shyam had to let two of his three employees go. 

“We had no idea our business would be impacted like this,” said Shanti Shrestha, Mt. Everest’s managing director.

Pedestrians who would once peer into Mt. Everest Import’s widows or meander into one of the several nearby restaurants have been forced off the mall by intersection closures at Larimer and Stout streets and Glenarm Place. The free MallRide buses that used to zip people from one end of the 1.25-mile shopping and dining district to the other now run in a loop, down 15th Street and back up 17th Street. All of this change was to make way for construction crews to renovate the more than 40-year-old tourist attraction by widening the sidewalks, improving drainage, and adding trees to create a more shady walk.

One of the most time-consuming parts of the project has been the transitway upgrades. Crews are removing the pedestrian walkway between the two bus lanes to make way for wider sidewalks that could make the mall more inviting for pedestrians. They are also replacing the nearly mile-long grid of red, black and gray granite pavers that resemble a Navajo rug or the back of a rattlesnake to address drainage issues on the street. The pavers, a key element of the mall’s original modernist design by famous architect I.M Pei, had an initial life span of roughly 30 years and cost the city about $1 million to maintain each year. The work is about six months behind schedule because crews unearthed underground utilities and a century-old, brick-lined sewer underneath 16th Street.

Some of the barriers have come down, on the block near the Tabor Center between Larimer and Lawrence streets. But the roughly $170 million project — which is funded through a combination of federal, state and local dollars — was initially scheduled to be completed at the end of 2024, but now has a summer of 2025 completion goal.

Sense of place

Not only has the renovation project disrupted businesses along the mall, it has also unwound its sense of place. 

The Downtown Denver Partnership’s recent ground-floor retail activation strategy included the results of surveys showing that 53% of respondents are avoiding downtown because of the 16th Street Mall project. Younger respondents added the lack of transportation options downtown is their biggest impediment to visiting, while higher-income folks cited cleanliness, public safety and parking costs.  

These issues have been compounded by other challenges outside of the city’s control, like the adoption of remote and hybrid work options. In the past year, the office vacancy rate in downtown grew to a record high of 32%, data from CBRE shows. Meanwhile, pedestrian visits are approximately 24% below their pre-pandemic levels, according to data from the Downtown Denver Partnership.  

To business owners like Edwin Zoe, who owns Dragonfly Noodle at 1350 16th Street Mall, these challenges illustrate the need for a new neighborhood concept like the one Denver has proposed near the mall. “Anytime you can identify a certain culture or place, I think that’s a positive,” Zoe said. 

Right now, those dreams are less valuable than the dollars Zoe needs to keep his store open. Zoe said his Denver store, which opened in 2022 — the same year he was a semifinalist for a prestigious James Beard Award — generates 70% less revenue than his other Dragonfly Noodle location on Boulder’s Pearl Street Mall. Zoe also operates the Zoe Ma Ma noodle restaurant near Union Station and said he remains optimistic that more people will return downtown after the construction ends. 

Denver Mayor Mike Johnston’s administration has issued more than $1.2 million in grants to support 106 local businesses impacted by the 16th Street construction project. The city also issued another $1 million in Business Impact Opportunity Funds in 2023 to 70 downtown businesses that were impacted by homeless encampments. The mayor also plans to extend the Downtown Denver Authority, a financing mechanism that was used to revitalize Union Station in 2014, to attract new private investment and businesses to the mall. 

But these efforts feel like a drop in the bucket compared to the issues that lie ahead. 

“We’re not really trying to address a headwind — we’re facing a hurricane,” Zoe said. 

A new downtown

Reviving a sense of place along the 16th Street Mall seems to be a top-of-mind issue for city officials. 

Denver’s 2023 adaptive reuse survey identified 10 commercial buildings within one block of the 16th Street Mall that could be converted from office to residential. Some of those buildings include the University Building at 910 16th St. and The Colorado Building at 1615 California St.

If completed, the new micro-neighborhood that emerges along the mall could resemble an urbanized version of Tennyson Street in the Highlands neighborhood or South Pearl Street in Platt Park. Not only would this give Denver an opportunity to repurpose the aging commercial buildings that dot the city skyline, but it could also help bring people downtown to support the ailing local businesses along the mall, according to Doug Tisdale, the District H director for the Regional Transportation District, which is a partner agency for the mall upgrade.

Tisdale added that improving the transportation infrastructure is key to making Denver’s plans work. That’s how people living along the mall can travel between different areas of the emerging neighborhood, “whether by foot, bike or scooter,” he said. The free RTD MallRide shuttle that cruises between transit hubs at Union Station and Broadway could also help move people between the different districts along the mall once the upgrades are complete. 

Homes and transportation options aren’t the only way to bring people back to downtown. There also have to be entertainment options. DDP’s ground-floor retail activation strategy calls for Denver leaders to improve the area’s nighttime economy through music, events and unique retail options. These activities would likely be located near the west end of the mall, closer to LoDo and Union Station, where a lot of entertainment already happens.

Wiebenson added that DDP is also developing four prototype kiosks — each about 100 square feet — to provide affordable options to attract local retailers along the mall. The goal is to “welcome new concepts that are looking for an opportunity to establish a foothold downtown.” 

The kiosks would function similarly to the Partnership’s Popup Denver program, which the city piloted in 2022 and 2023. It was intended to connect entrepreneurs with affordable retail space along the mall, although none of the businesses that participated became full-time tenants on the mall. The new kiosks are expected to be completed later this summer and installed by Labor Day, she said, though where they will be and how much they will cost to lease has not been determined.

But increasing foot traffic with new businesses, entertainment options and tourist attractions is seemingly at odds with creating a neighborhood vibe, which relies on feelings of safety. 

To balance the two visions, Wiebenson said, the city could create “different pockets with amenities for where people are in their lives,” so that the area is no longer thought of as a commercial monolith. She added that the project could help link the mall to distinctive neighborhoods like the Golden Triangle and Upper Downtown, both of which are anchored by local businesses and a distinct arts community. 

“We’ve already got this cool pattern beginning to emerge of these characteristics,” Wiebenson said, “and we can strengthen that by the kinds of businesses we bring in.” 

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