Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: August 20, 2026

Agenda Title Consideration of a motion to adjourn as the Boulder City Council and convene as the City of Boulder Downtown Commercial District (formerly known as the Central Area General Improvement District) (CAGID) Board of Directors; and Consideration of a motion to approve a purchase agreement between CAGID and MALR Boulder, LLC, for the disposal of CAGID-owned real property located at 2121 Broadway and authorize the city manager, acting as the General Manager of CAGID, to execute the purchase agreement and all associated documents; and Consideration of a motion to adjourn as the City of Boulder Downtown Commercial District (formerly known as the Central Area General Improvement District) (CAGID) Board of Directors and reconvene as the Boulder City Council

Staff Contact •

Mark Woulf, Assistant City Manager

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to adjourn as the Boulder City Council and convene as the City of Boulder Downtown Commercial District (formerly known as the Central Area General

Improvement District) (CAGID) Board of Directors; and Motion to approve a purchase agreement between CAGID and MA-LR Boulder, LLC, for the disposal of CAGID-owned real property located at 2121 Broadway and authorize the city manager, acting as the General Manager of CAGID, to execute the purchase agreement and all associated documents; and Motion to adjourn as the City of Boulder Downtown Commercial District (formerly known as the Central Area General Improvement District) (CAGID) Board of Directors and reconvene as the Boulder City Council

Executive Summary Staff have reached a tentative agreement to sell the Central Area General Improvement District (CAGID)-owned surface parking lot at 2121 Broadway (Broadway & Spruce) to MA-LR Boulder, LLC. The buyer intends to develop the site as a boutique hotel. In exchange, the buyer and all future owners will be bound by a Community Benefit Covenant recorded against the property for 30 years. The covenant requires affordable commercial space for local retailers, no-charge publicly accessible space (including a public rooftop), a public art contribution plus ongoing local-artist exhibitions, supplierdiversity and energy-performance commitments, protection of access for the First Congregational Church, and collaboration with Visit Boulder and major cultural events such as the Sundance Film Festival. The covenant is structured so each benefit is backed by a fixed, dollar-denominated buy-out amount; the owner may not exercise any buy-out until five years after closing, and buy-out amounts escalate 3% annually. This secures delivery of the benefits while giving the owner a bounded, negotiated path to release a benefit if conditions change.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved the City Manager, acting as the General Manager of CAGID will be authorized to execute the sale agreement and related documents.

Define and adopt a modified motion

The proposed sale agreement is a product of negotiations with the proposed buyer. Any modifications would need to be renegotiated.

Deny the motion or take no action

If this motion is denied, the sale of the property would not move forward.

Refer back to staff

If council refers this item back to staff, the sale of the property would not move forward.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area The proposed sale and development most closely align with the “Economically Vital” SER goal, which call for a “healthy, accessible, resilient, and sustainable economy based on innovation, diversity, and collaboration that benefits all residents, businesses, and visitors.” The development would bring new investment within the core downtown and allow for the highest and best use of a valuable city asset. This directly addresses the SER goal by striving for a thriving economy and investing in amenities and infrastructure that support key commercial areas and the visitor economy. Citywide Strategic Plan The proposed sale and development most closely align with Strategy #14 – “Enhance collaborative efforts to support an inclusive, healthy, sustainable, and resilient local economy that builds on core economic strengths, promotes economic mobility, and aligns with community values and priorities.”

Alignment with Additional City Plans The proposed sale and development also align with the city’s Economic Development Plan. The plan calls for business attraction, increasing activities within key commercial areas, and supporting the visitor economy. The proposed sale terms include key provisions that advance the arts, culture, and creative industries that are also a focus of the plan and the Arts Blueprint.

City Council History City Council previously met in Executive Session in June and November 2025 to provide guidance to staff on negotiations related to the terms of a potential sale, including the community benefits that would accompany it.

Analysis The proposed transaction and covenant reflect several deliberate structural choices intended to balance durability of community benefit against commercial flexibility for the owner. Because the sale was negotiated directly with a single buyer rather than through a competitive solicitation, staff placed particular emphasis on securing enforceable, long-term community benefits through the covenant as the return to the public for pursuing the transaction through this closed, negotiated process. ● Sale price. The $5.8M price reflects an above-market valuation per the City's broker, indicating the City is not subsidizing the transaction through a belowmarket sale. The City's broker has further confirmed that the offer is very competitive relative to current market conditions for comparable downtown property. ● Affordable commercial space. At least 2,000 sq. ft. must be leased at 25% or more below market rate to local, independent retail and food/beverage tenants, with a diligent-marketing requirement if space sits vacant more than six cumulative months in an 18-month period. ● Public space and events. The development must include no-charge, publicly accessible food/beverage areas and a public rooftop open at least 20 hours per week; private bookings are capped at 30% of monthly operating hours, and the owner retains operational discretion (the covenant does not create a public right to use the property as an unsupervised gathering space). ● Arts and culture. A one-time $100,000 donation to the Boulder Arts Foundation for on-site public art, at least three rotating local-artist exhibitions per year, and a minimum 35% local-sourcing requirement for interior art installations. ● Diversity, inclusion, and environmental practices. Good-faith efforts to award at least 20% of construction contract value to certified women- and minorityowned Front Range businesses, annual reporting, energy performance at least 10% better than existing code, and solar-ready infrastructure sized to offset at least 5% of projected annual energy use. ● Historic parking lot users. The owner must not interfere with the city coordinating with historic institutional users of the lot, including cooperating to preserve safe alley access for First Congregational Church.

● Tourism and cultural collaboration. Commercially reasonable efforts to work with Visit Boulder and major cultural-event organizers, including the Sundance Film Festival, on event-space availability and pricing. Each benefit (other than the historic parking lot and tourism provisions, which have no buy-out and continue as ordinary covenants) carries a fixed, liquidated-damages-style buy-out amount that the owner may pay to release that specific obligation. This caps the City's recovery for nonperformance but also removes the cost and uncertainty of proving actual damages, and it provides the owner a known, bounded cost of noncompliance rather than open-ended liability. The buy-out right cannot be exercised before the fifth anniversary of closing, and the owner must otherwise meet all benefits within three years of closing — meaning the covenant is expected to be substantially in force for a minimum of two years before any release option becomes available. Buy-out amounts increase 3% annually beginning at issuance of a certificate of occupancy or January 1, 2028, whichever is earlier, so the value of the commitments is not eroded by delay. Parking Impact Attachment E is a September 2025 parking demand analysis prepared by Fox Tuttle Transportation Group evaluating whether the loss of the 59-space Spruce Lot, and the added parking demand from a new hotel, can be absorbed by the three nearest City parking garages (Spruce, Randolph Center, and St. Julien). The analysis was based on one year of occupancy data (June 2024 – May 2025) across all four facilities. Key conclusions: ● Even assuming all three nearby garages are simultaneously at 95th-percentile peak occupancy, they have enough combined excess capacity to absorb the full 59-space displaced demand from the Spruce Lot. ● After accommodating that displaced demand, an estimated 180 parking spaces would remain available across the three garages at 95th-percentile occupancy. ● Using a conservative hotel parking demand rate of 0.5 spaces per room — based on Boulder-specific hotel data and the site's high walk, bike, and transit scores — and accounting for the fact that hotel parking demand peaks at different hours than the surrounding garages, the study concludes the existing parking supply could theoretically support up to approximately 479 hotel rooms, well above the proposed 110 room development. ● The Spruce Garage, closest to the site, is the most heavily used of the three and may see the greatest midday spillover impact; the Randolph Center and St. Julien garages, one to two blocks farther away, have more consistently available capacity.

● Staff will continue to work with the developer to accommodate hotel parking at other less utilized garages across the system, such as the Trinity Garage, one block north off of Broadway. Overall, the study concludes that existing downtown parking supply is adequate to absorb both the displaced Spruce Lot demand and the anticipated parking demand from a hotel of a scale reasonably expected on this site.

Equity Analysis Equity was an explicit consideration throughout negotiation of the Community Benefit Covenant, most directly reflected in the affordable commercial space and supplier diversity provisions. Rather than leaving leased spaces to market forces alone, staff negotiated a requirement that at least 2,000 square feet be leased at 25% or more below market rate specifically to local, independent tenants — a structure intended to prioritize small, community-rooted businesses that might otherwise be priced out of a downtown location. That requirement is paired with a diligent marketing obligation if the space sits vacant for an extended period, with city participation, to help identify potential tenants. On the construction side, the covenant sets a goal of directing at least 20% of construction contract value to certified women- and minority-owned Front Range businesses, with annual reporting to track progress, extending the equity commitments from who occupies the finished building to who builds it. The arts and public access provisions were negotiated with a similar emphasis on broadening who benefits from and is represented in the development. The public art requirement includes a 35% local-sourcing threshold for interior art installations and at least three rotating exhibitions per year dedicated to local artists, ensuring the space showcases the community's own creative economy. On access, staff prioritized nocharge, publicly accessible food and beverage areas and a public rooftop open at least 20 hours per week, with private bookings capped at 30% of monthly operating hours — a structure designed to keep a meaningful share of the development open to the public.

Fiscal Note Estimated Fiscal Impact Narrative Current Year Estimated Fiscal Impact Fund(s): 6400 – Central Area General Improvement District Department(s): City Manager’s Office Program(s): Office of Cultural & Economic Development

FY 2026 Budget

FY 2026 Estimated Impact

FY 2026 Net Change

Beginning Fund Balance

15,070,539

0

15,070,539

Total Forecasted Revenue

9,318,149

0

9,318,149

Total Estimated Expenses

18,186,591

0

18,186,591

Ending Fund Balance(s) After Reserves

5,271,650

0

5,271,650

FTE

19.7

0

19.7

Item

Three-Year Estimated Fiscal Impact

Item

FY 2026

FY 2027

FY 2028

Total Forecasted Revenue

9,318,149

8,957,396

14,849,070

Total Estimated Expenses

18,186,591

12,715,553

10,065,907

Net Estimated Impact

0

0

5,800,000

Climate, Resilience, and Sustainability Considerations Sustainability was built into the Community Benefit Covenant through measurable, enforceable performance standards. The covenant requires the completed development to achieve energy performance at least 10% better than current code, verified by a thirdparty certified energy model based on permit-set construction documents, and requires solar-ready infrastructure sized to offset at least 5% of the development's projected annual energy use. This approach allows the buyer flexibility in how it meets the standard while ensuring the outcome is independently verifiable. Pairing the energy performance requirement with solar-ready infrastructure also positions the property for further emissions reductions in the future without requiring immediate solar installation, balancing nearterm cost to the developer against the property's long-term environmental profile over the covenant's 30-year term.

Community Engagement To protect the city’s interests, most negotiations took place in Executive Session with City Council or between staff and the proposed buyer. However, staff presented the initial concept to the Downtown Management Commission in June 2025 to receive feedback. On July 14, 2026, Downtown Management Commission recommended to council (5-0) the authorization of the City Manager (acting as the General Manager of the CAGID) to execute a sale agreement and all associated documents for CAGID-owned real property located at 2121 Broadway to City Council (acting as the Board of Directors for CAGID).

Workplan Considerations Negotiations and execution of the proposed sale agreement is within the staff workplan. Additional negotiations or a competitive bid process for the site is not within the current staff workplan.

Next Steps for City Council No additional steps are required if approved. Council would next see the proposed development during the development review process, likely in 2027 and 2028.

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Attachments Attachment A – 2121 Broadway Purchase and Sale Agreement (PSA) Attachment B – 2121 Broadway Sale Addendum Attachment C – 2121 Broadway Community Benefit Covenant Attachment D – Buyer Prospect Presentation – MA-LR July 2026 Attachment E – Fox Tuttle Parking Analysis, September 2025