Brick By Brick

READ THE ARTICLE IN THE DENVER BUSINESS JOURNAL

For decades, a factory on the west side of Interstate 25 in Castle Rock, at 401 Prairie Hawk Road, churned out bricks.

Then, in 2019, the facility’s owner, Texas-based Acme Brick Co., shuttered the plant, leaving a 31-acre site — and approximately 3 million of the sturdy building blocks — behind.

Golden-based real estate developer Confluence Companies found new life for those bricks.

Since buying the property for $7 million in 2020 and demolishing the dilapidated plant, the developer has used the bricks in its other projects or donated them. Confluence also crushed up unusable bricks to create the construction road base for what’s to come: a $400 million mixed-use development that Castle Rock leaders say will extend downtown across the interstate.

Fittingly named The Brickyard, the project will include hundreds of homes, a luxury hotel, six new restaurants and a sports and recreation center.

The project has been in the works for five years and recently received some key approvals from the Castle Rock Town Council.

“This project takes a beat up, old brickyard and brick factory and repurposes it in our community, so you don’t have something blighted that’s sitting there,” said Frank Gray, president and CEO of the Castle Rock Economic Development Council. “I think it’s going to be really big for the community.”

Leaders in Castle Rock want to shed the notion that the Douglas County town is a bedroom community, aiming instead to establish it as a standalone destination. But construction has struggled to keep up with the desire for commercial space.

The Brickyard’s mixed-use design aims to ease that problem while bringing housing, entertainment and workplaces together in one setting, further proving, city leaders hope, that Castle Rock is a place where residents can live and work without making the drive to Denver.

Downtown Connection

Today, no buildings are left standing at the future site of The Brickyard.

The land won’t be empty for long. The Brickyard will have a total of 336,000 square feet of commercial space, including a 145,000-square-foot recreational center, a 99,000-square-foot hotel with 125 rooms and a conference center, 34,000 square feet of restaurant space and 58,000 square feet of offices.

It will also include around 300 apartment units and 160 for-sale condominiums.

The redevelopment will connect to downtown Castle Rock via a bike and pedestrian path underneath I-25.

Tony DeSimone, CEO, founder and partner of Confluence Companies, said the project will be “a first of its kind” for the town by connecting restaurants, office space, residential and recreational facilities all in one walkable neighborhood.

Gray agrees that walkability is key. He envisions The Brickyard as a space that Castle Rock visitors and residents alike can explore on foot, much like they do on Wilcox Street, the heart of downtown.

“I think residents are looking for unique, local restaurants and breweries that really highlight Colorado,” Gray said. “It’s a really important component just making it an attractive place where people want to spend time.”

The future Brickyard property has already been rezoned from industrial into a planned development by the town council, which also approved a development agreement with Confluence Companies back in February.

To fund the project, the council recently voted “yes” on an urban renewal plan and a financing agreement that allocates, for as long as 25 years, incremental property tax revenues for the project from five taxing entities: the town of Castle Rock, Douglas County, the Douglas County School District, the Douglas County Library District and the Cedar Hill Cemetery Association.

“Now, what we’ve been able to achieve is something that I think may well be a first in Douglas County,” Michael Hyman, the town attorney, told the council on May 20. “Because of the nature of this project, each taxing entity has consented to the use of 100% of their property tax increment in association with this plan. I think that’s a remarkable success.”

Stepping Out From Denver’s Shadow

Castle Rock got its start when one of its original homesteaders, Jeremiah Gould, donated 120 acres “to be known as Castle Rock” in 1874.

As the town grew, it was widely regarded as one of Denver’s many bedroom communities, the name given to a largely residential area that feeds a nearby city’s workforce.

Then, in 2005, Castle Rock residents voted to opt out of being in the Regional Transportation District and paying its taxes after they realized the town wouldn’t receive a rail line connection. That was the impetus for the town working toward self-sustainability, Gray said.

“Castle Rock doesn’t actually want to be a suburb,” Gray said. “That’s kind of one of the things that was very clear when I first took the job [in 2009] is that Castle Rock wants to be a standalone community.”

To achieve that goal, Gray and his team have worked to diversify Castle Rock’s economy and attract primary jobs, which create goods or offer services for customers that live elsewhere, Gray said. That generates money that stays in the local economy.

Castle Rock has also tried to create an ecosystem that gives employers what they need to thrive.

For example, the Arapahoe Community College Sturm Collaboration Campus, which opened in 2019, fulfills a need for highly educated employees.

The campus is a joint venture between Arapahoe Community College, the Castle Rock Economic Development Council, Colorado State University and the Douglas County School District. Students can take college-level courses during high school, earn an associate’s degree through the community college and can further those efforts into a bachelor’s degree from CSU, all in one building.

Those graduates bolster Castle Rock’s workforce, which attracts startups, Gray said.

Today, Castle Rock includes a collection of small manufacturers, along with industrial and office folks. More want to set up shop in the Douglas County town, according to Gray, but the town’s dearth of commercial space means the waitlist is long.

A quarterly commercial market review report from NavPoint Real Estate shows that Castle Rock had a 5% vacancy rate for office space and a 1.7% retail vacancy rate in the first quarter of this year.

Compared to Douglas County as a whole, which had a vacancy rate of 17% for office space and 2.4% for retail in the first quarter of this year, that’s low. It’s far below Denver’s 21.5% office vacancy rate and a 4% retail vacancy rate, per the report.

An earlier Confluence Companies project in Castle Rock, Encore, illustrates the demand. All of Encore’s commercial, retail and residential units were sold prior to the building being delivered in 2021, according to DeSimone.

The Brickyard’s 34,000 square feet of restaurant space and 58,000 square feet of offices are similarly being snatched up quickly.

“Right now, we have all six restaurants under contract and then, I would say, about 50% of the office space is under contract as well and we don’t even have an approved project, so it shows you the demand that’s in that market,” DeSimone said.

The restaurant contracts are subject to the town council’s approval of the site development plan this summer. The planned dining spots include Voodoo Brewing Company, Sushi Row, White Pie, John Saunders, Where Food Comes From and Journeyman’s Bar.

Confluence Companies’ Investment

Making Castle Rock an employer magnet hasn’t always been easy. Twenty years ago, the downtown corridor struggled with “seedy” activity, Gray said. In response, businesses voted to form a downtown development authority, which generated money to fund improvements like putting lights over downtown’s Wilcox Street.

Gray also credits Confluence Companies with helping to turn things around.

DeSimone lived in Castle Rock in 2005 and remembers 20 new businesses opening in downtown. By the time he began developing his first property there, roughly a decade ago, only one of those stores remained.

“Downtown at the time was taking a big hit with development outside the downtown core,” DeSimone said. “And so, it was really our initiative to build a place where people could live, work and dine, and kind of revitalize downtown.”

First came Riverwalk Castle Rock in 2019, a mixed-use redevelopment on Wilcox Street that consists of 230 apartment units, 31,700 square feet of office space and 16,200 square feet of retail.

That project was followed by Encore, which brought 124 condominium units and over 29,000 square feet of ground-floor commercial space in September 2021.

In summer of 2024, Riverwalk Luxe was completed, adding 28 luxury residential units and nearly 21,500 square feet of commercial space.

“When Tony bought those buildings, and he built the Riverwalk, he simultaneously wiped out some really sketchy real estate, but then also built and put people in downtown,” Gray said.

Confluence Companies has brought six new restaurants to downtown Castle Rock so far. Sixty-three new businesses relocated to the company’s buildings.

One of those businesses is Glacier Homemade Ice Cream and Gelato, the first tenant of Confluence Companies’ Riverwalk development. For Tony Berberich, the shop’s co-owner, downtown Castle Rock was an attractive place to open shop because of the interstate connectivity and the small-town feel.

Since debuting the 1,800-square-foot ice cream shop in 2019, Berberich said business has tripled.

“It is location and it’s Castle Rock. Those are the two parts of the formula,” Berberich said when describing the success Glacier Ice Cream has experienced.

The Brickyard Details

Confluence has already invested $200 million in previous projects in Castle Rock, DeSimone said. That number doubles with the $400 million investment in The Brickyard.

The developer is working to obtain final approvals for the project, something DeSimone said should happen by the end of summer.

The first phase of construction, set to be delivered in 2027, will include the internal road systems and an extension of the trail system beneath the railroad and I-25.

It will also include the sports and recreation center, which is slated for a site larger than 10 acres that Confluence Companies will donate to the city.

The recreation center will be owned and operated by the town, which will pay $75 million for its development through the issuance of tax-exempt certificates of participation.

The center will include indoor court sports, like basketball, pickleball and volleyball, along with a competitive natatorium — a complex with one or more indoor swimming pools — with 11 swim lanes, DeSimone said.

A bowling alley will also be included in the initial phase of construction. The potential owner of that site has signed a letter of intent, and Confluence Companies is working to get the buyer under contract, DeSimone told the town council in May.

The second phase will include a mixed-use building with three restaurants, 300 apartment units and a handful of office condos, also tentatively scheduled for a 2027 delivery.

It will be followed by what DeSimone calls a “commercial zone,” a building that will be known as the Great Hall. It will host three more restaurants and around 40,000 square feet of office space.

The third phase will also include a four-star, 125-room hotel. Hotel Castle Rock, as it will be called, will feature a banquet facility and a spa fitness center. It will be under Confluence Companies’ boutique hotel brand and is a sister property to The Eddy, a 49-room hotel developed and owned by the company in Golden and completed in 2021.

The fourth and final phase of the development will include 160 residential condominiums.

Each phase should take about two years to complete, with full build-out set for 2030, DeSimone said.

The project will also include an outdoor area called the Brickyard Square. The space will be used for concerts, farmers markets and winter ice skating opportunities.

“The nice thing with The Brickyard development is it continues that walkability, kind of in the suburban market, and encourages people who live in downtown to come to The Brickyard and people who live at The Brickyard to come downtown,” DeSimone said. “It just really expands the number of users that can visit the restaurants, the retail and all these other great uses.”

 By Justyna Tomtas – Reporter, Denver Business Journal