Denver Property - What would you do?

[Austin Snow]

Looking for some advice and hopefully some input from people with experience in the Denver area. We own a property just outside downtown Denver in the Sunnyside neighborhood. The home is an 850 square foot SFH that was built in the 40's. The location is wonderful but I hate the structure, which got me thinking about a scrape & build (since that's already happening so much in the area).

We rent the home for $1800/month but will up it to $2000/month in August when the current lease is up. Current loan on the property is $180K ($1050/mo). Current value of the property is $325K.

New construction duplex units in the general area (NW Denver) are selling for around $600K each. I'd love to scrape the current structure and build a duplex - all-in construction costs would run around $550K, sale of both units would bring in $1,200,000 revenue, paying off the current note would leave profit of $470K, and we'd net around $400K after broker fees and stuff. 

The financials work. The issue I've discovered is that the lot is zoned U-SU (Urban, single unit). The property is literally 700 feet from the area of the neighborhood zoned U-TU (urban, two unit), with no visible difference between the two zones (other than the duplexes going up!). 

Has anybody (in the area, preferably) ever dealt with potentially rezoning a single unit lot to a two unit lot? Might try redeveloping as a single unit but want to maximize with the duplex as you can imagine!