WTF is a land swap?

Question

Where are my Denverites at?!

This is the first time I've heard of a city or municipality doing something like this. I'd love to get takes from folks who have been around the investing & development scene longer than me - The city of Denver announced yesterday that the mayor has coordinated a land swap with a private developer.

If you live in or around Denver you've probably heard of the Park Hill golf course - if not, here's a quick rundown

Background:

1. Park Hill Golf Course was owned by a trust, in the wayyy distant past it was previously a dairy farm, but it has been operated as a golf course since the 1930's!

2. In 1997, I don't fully understand why, the City of Denver paid the golf course owners $2mil to rezone this parcel as a "conservation easement" this was extremely restrictive zoning and meant it would essentially be destined to be a golf course for eternity

3. 2018 golf course closes citing low revenue and high operating costs. 2019, the parcel was sold to a developer named Westside Investment Partners (WIP) who intended to remove the conservation easement and develop this parcel in a highly sought after neighborhood of Denver

4. From around 2018, when the golf course closed, until 2021 local residents essentially used this giant open parcel of grassy land right in the city as open space. On most any day you could find people walking dogs, or children playing in the area.

Starting around 2021 WIP who clearly thought rezoning would be a no-brainer seemingly started to get frustrated with the pushback from the city and residents.

I can't say for sure what the reasoning was, but the developers at some point around this time put a chainlink fence around the entire property - its 155 acres. They cited insurance reasons, which could very well be true, but many residents felt it as a big "f you"
Now folks from outside the community could argue this was an entitled stance from the residents, to feel they had access to this private land when they didn't, and that on the face is certainly true. But it's also true that this had been open space provided to the community for the better part of a century and now it was fenced off with not even a path or sidewalks around most of the perimeter.

5. In 2021 there were two competing ballot measures that the citizens of Denver voted on - one measure from open-space advocates that would "keep status quo" and continue to prevent WIP from developing this parcel, the second measure sponsored by the WIP themselves that would exempt the property from the current zoning restrictions.
What in the world would have happened if both completely opposing measures passed?? We still have no idea. And will never find out because the open-space advocates won their measure while the developers measure failed by a whopping 63%!

6. in 2023, two years after losing the first ballot measure, WIP tried AGAIN, and this time they still lost with 58% of the vote against them

7. This second defeat at the ballot seemingly left WIP with few options, and it was looking like they way overpaid for this land that in it's current legal state could only be used as a golf course or park.

Fast forward to today in January 2025:

Mayor Johnston of Denver, who has now been in office about 1.5 years, announced that the city had completed a deal with Westside Investment Partners to essentially trade this 155-acre plot in the middle of the city, for a 145-acre plot that the city owned near the Denver International Airport.

The parcel formerly known as Park Hill Golf Course will now become Denver's 4th largest public park. It remains to be seen what the parcel by the airport now owned by the developers will become.

Now what?

This is the first time I've heard of such a thing as a land swap, especially between a municipality and a private entity. Does anyone else have examples of this happening in the past in other places? If so what were the circumstances and what was the reasoning?

For those more entrenched in the Denver development market than I am, is this a fair trade for the city and for the developers? Or did one side clearly come out a winner?

My initial thought is that the developers may have gotten a much better deal than they would have otherwise given the clear limitations on the land's use. Who else would have bought this land from them? And at what nominal price compared to the $24mil they paid in 2019? That being said, I have no idea what the land by the airport is worth or what they will be able to do with it.

To me the biggest takeaway is that as real estate professionals, we always talk about location, location, location. When this has me thinking that we also need to be talking about zoning, zoning, zoning. Because in this case zoning took a 155 acre piece of real estate with incredibly prime location, and made it only worth at maximum 145 acres miles outside the city.

Kristi Kandel · Answer

@Rene Hosman Generally, Reasons for Land Swaps are to: - Resolving zoning conflicts - Acquiring strategically important properties - Consolidating land holdings - Avoiding costly legal battles - Achieving public policy goals When I was a Planning Commissioner projects would discuss land swaps for larger development projects to make sure the community impact was greater (typically gaining conservation land for us) than just allowing a rezone to be approved without public benefit. Urban Development land swaps are often used as a strategy to: - Consolidate public land holdings - Acquire important natural or recreational areas - Facilitate development while ensuring community benefits Land swaps can provide several benefits to communities: - Preservation of open spaces and environmentally sensitive areas - Creation of new public parks or recreational facilities - Protection of wildlife habitats and corridors - Improved land management efficiency I searched for some Urban examples for reference: 1. Los Cerritos Wetlands Oil Consolidation and Restoration Project (California): This project demonstrates how public-private land swap arrangements can be aligned with environmental restoration goals. The swap involved exchanging oil operations sites for wetland areas, allowing for habitat restoration while consolidating oil extraction activities/ 2. New Orleans Project Home Again (Louisiana): Implemented after Hurricane Katrina, this program involved a land swap and redevelopment initiative. Residents in flood-prone areas were offered newly built, elevated homes on safer ground in exchange for transferring the title of their damaged original homes to the city. 3. Edgemere, Queens, New York (post-Superstorm Sandy): Similar to the New Orleans example, this program offered residents in high-risk coastal areas newly built, elevated homes on safer ground in exchange for their damaged properties. 4. Battery Park City Exchange (New York City): The city of New York engaged in a land swap with the Battery Park City Authority, allowing for the creation of a new public school and affordable housing units in exchange for a parcel of land that was then developed into a high-value commercial property. 5. Denver Union Station Project (Colorado): The city exchanged several smaller parcels of land with a private developer, who in turn constructed a mixed-use development that included retail, office space, and residential units. This swap catalyzed urban revitalization around a key transportation hub. 6. University of Kentucky and Lexington-Fayette Urban County Government Land Swap: In 2018, the University of Kentucky exchanged 250 acres near its Coldstream Research Campus for control of several important roads in and around campus, contributing to economic development opportunities and improved urban planning.

Jay Hinrichs · Answer

yup very common. Usually conservation easements come with Huge tax benefits for the party putting the property into a CE. This is also very good example of jurisdictions that have zoning and annexations that need voter approval its a great way to STOP development. I am at this writing currently selling a 35 acre tract to a big developer who is converting the local golf course here in Oregon that was zoned Open space.. they have been successful in getting the rezone.. As its not a vote of the peeps if it was would never have happened.. Golf course is a tough business with dwindling play .. think the rise of Top golf and pickle ball.. :)Also if you look at federal forest ownership maps you will see that Huge areas are checker boarded with private ownership . IE one section 6X 6 miles is owned by the US the one next to it is private.. Timber companies and the feds swap these lands all the time in an effort to create large blocks of either gov land or private timber lands. So you will have 3 ownerships 1 us gov (fed forest) 2. BLM ( bureau of land management) 3. Private ownership primarily large timber owners like Warehouser in the PNW Stimson in Idaho Montana etc etc.

Kristi Kandel · Answer

@Rene Hosman Until I was on the Planning Commission I had no idea how much I was missing out on. The meeting minutes and agendas are public record but unless you attend every meeting and hear all the public comments it's very hard to actually follow along. City Council/County Commissioners officially make all of the deals PC is just a recommendation body of local residents appointed by CC. PC can't make any final decisions on rezones, parcel maps, etc. However, PC would vet the project and design and verify it meets all zoning standards. If we automated government, help live streaming meetings, sent out meeting recaps using AI summaries, etc. (you know all the things we using in running effective and efficient private companies) it would be a different story.

Kristi Kandel · Answer

@Rene Hosman It's very rare that anything gets done quietly behind the scenes. For the public unless you're attending EVERY planning commission and city council/county commissioner meeting you wont hear all of the back and forth.

Kristi Kandel · Answer

@Rene Hosman YEARS and that's if they actually got approved because it had to be so completely vetted to avoid lawsuits after approval. 5-10 years but the stance of that municipality was anti-change, anti-development, NIMBY on steroids, etc. Ironically most people MOVED to the area from somewhere else and then wanted to slam the door shut behind them...

Greg Scott · Answer

Thank you for all the details of this story. It was entertaining. This is a larger example of what has been happening all over the country. I was involved in two small infill developments in Michigan (about 15 houses in total) so two very small parcels. From the neighbors reaction, you would have thought we were building a garbage dump on those locations. There were even anti-development people from outside the community that came to try to shut it down. In our case, fortunately, they were unable to stop the rightful use of the land. (Ironically, I'm sure a good portion of the people arguing against development are also upset with the government for not tackling the affordable housing issue.) If I were WIP and felt I just got cheated out of my right to develop that land, I would have put a fence around it. After the restrictive zoning passed, WIP still retained the right of ownership and they also had the right to prevent people from using their land. (Let's put up beware of dogs signs and have a pack of dobermans patrolling the grounds.) I'm sure that factored in to the government trying to find a way to gain ownership of the land and the only solution appeared to be a land swap. Still, WIP lost huge in that deal. Industrial land is not as valuable as an infill residential parcel.

Chris Seveney · Answer

This happens all the time, when I worked in Boston and outside the city in some counties there would be land swaps that occurred. First and foremost you are just reading a newspaper article. There are a lot more things that occur as part of the contract that would be included including valuations for each parcel, specific tax consequences, proffers offered to the city etc. Typically its done for open space or use for community property (ie. fire station location or other county use) and typicaly would assist in increasing tax base.

Rene Hosman · Answer

Oh very interesting, I'll have to check the planning commission meeting notes because this was a hot topic in Denver the last few years so if it was discussed there on public record I'm surprised it wasn't in the news at all before! Thanks so much for the intel

Rene Hosman · Answer

That's kind of what I figured, the last public ballot measure vote to deny rezoning was late 2023. Which makes me wonder if this deal either A. Has been being negotiated behind closed doors for years longer than we've knownor B. Went through extra fast because the developer really had no other good optionsI doubt we'll know the full details for years to come but I'm curious if you have an opinion, or if there's other probable options C,D,E I could be missing as just a public bystander to the situation

Rene Hosman · Answer

This is a very thorough overview of land swaps! I'm curious when you were planning commissioner, how long did these land swap deals take to hammer out? I have to imagine it's a bit more negotiating than just purchasing something with cash, since it's essentially bartering