DENVER — Of all the communities wondering just what the savings and loan crisis managers will be emptying from their bag of bargain property holdings, none could be more curious about it than Denver.
Denver, where, over the last few years in a bludgeoned real estate market:
--Nearly 15,000 Housing and Urban Development-foreclosed condominiums and houses were tagged at prices that look like typographical errors, some to be had for $100 down;
--One wreck of a house got posted on a realty sales board for $4,000, and a realtor, in the space marked "terms," scribbled "Visa or MasterCard."
--High-rise offices, virtual vertical ghost towns, went begging, with come-ons like 20 months free on a 60-month lease. For a time, in some parts of town, you could rent space for $4 to $8 a square foot, not much more than what the carpeting cost.
Denver, overbuilt and underpriced, has had its fill of bargains, thank you. It is just getting back on its feet, and the last thing it needs is more real estate being put up for sale cheap.
Yet 17 of the 35 thrifts in Colorado failed or had to be reorganized under federal direction. That left under federal control 1,838 pieces of property--vacant land, office towers, houses--enough to give Colorado the fifth-largest helping of S&L leftovers in the nation (compared to 307 so far in California), a federal spokesman said.
Out there, too, there is some skittishness that any perceived "dumping" of cheap acreage or buildings by the government bailout agency, Resolution Trust Corp., may slow Denver's recovery from the wild economic rodeo ride of the 1980s. In just a few years, the real estate market here deflated like a leaking balloon and property values shriveled 30%, 50%, even 60%. The worry again is that S&L fire sale prices might yank other values down with them, just as happened with an earlier bonanza of HUD houses.
"To me, the wild card is the S&L," said economist Doris Drury, president of the Center for Business and Economic Forecasting at Regis College in Denver.
"If they go about this slowly, methodically, and do not dump real estate on the market, Colorado's economy over the next few years can absorb what they've got," she said. "If they attempt to dump too much real estate, they're going to hit very hard a market just now beginning to show some life in it, and you can imagine what would happen."
Denver brokers would rather not imagine it. After three years of sell-offs, the city is still full of good deals. Out-of-towners in a buy-low mood fly in, eager for bazaar-style bargains. Business people find they can still purchase offices for half the cost of building them. Residents often find it cheaper to buy than to rent.
"We have been through Armageddon here," said one major real estate firm's senior vice president, Rick Pederson. "Commercial (realty) people are still a frightened lot. The very size of RTC and the thickness of the book of RTC properties frightens them." He added wryly that RTC has "become a prime user of office space in downtown Denver," where the vacancy rate still exceeds 20%.
RTC has sought to assuage Colorado's concerns. "The legislation says we can't dump," said RTC spokesman Kevin Shields, and "whatever we have for sale has been (offered) for sale already" by the foundering S&Ls--although not, admittedly, all at once.
With those pledges and a second look at the portfolio, some brokers can breathe more easily. "The initial thought was 'My goodness, the government's gonna own everything and have big impact,' " said John Fuller Sr., chairman of the board of Fuller & Co., "but it's not nearly what everyone was afraid it'd be."
There are some signs that confidence in the region is growing. A new airport is going in; the convention center opened this month to 10,000 Christian booksellers, and Denverites will vote Aug. 14 on whether to build a stadium to lure major league baseball to town.
Still, Denver will take a long time to unjitter completely. Take the case of the InterPlaza shopping complex, which went up along a blue-collar commercial strip during the build-thrill days of the 1980s.
Its showpiece, a pricey French department store called Printemps, opened and closed within 16 months. The exotic, fan-shaped glass canopies over the entrances were cracked in a recent hailstorm. Nearby boutiques such as Revillon, its name still cut in gold over the door, stand empty. The renovation of a Montgomery Ward store nearby was stopped midway through the project and an enormous, whimsical hammer and ladder are still fixed to an exterior wall, testimony to intent, if not achievement.