From eyesore to eye candy?

A boarded-up and dilapidated Denny’s restaurant building on Bijou Street, just across Interstate 25 in downtown Colorado Springs, was recently demolished, clearing the way for what businessman, entrepreneur and attorney Perry Sanders Jr. says will be a mixed-use revival of the high-profile site.

Sanders has owned the property through a limited-liability company since 2020 and was part of a group a year earlier that envisioned a Florida-based seafood restaurant going into the Denny’s building, though that plan didn’t materialize.

Now, he envisions a seven- to eight-story structure on the site, with ground-floor restaurants and retail and upper floor for-sale condominiums, which would transform the property “into a fairly grand entrance” for people coming into downtown from the west.

“You exit Bijou and (see) something other than the eyesore that it’s been and the blighted area it’s been,” Sanders said of motorists getting off I-25 and heading into downtown.

The Denny’s at the site closed in 2017 when all four of the city’s Denny’s were shuttered by state regulators because of current and former owners’ failure to pay sales and payroll taxes, Colorado Department of Revenue officials said at the time.

The downtown Denny’s had stood vacant since then, but it’s become a magnet over the years for the homeless and drug users, Sanders said. In January 2020, the building caught fire, a blaze he said probably was started by transients.

City officials reached out and urged him to tear down the building, saying they couldn’t keep people out of there, Sanders said. It was razed on Sept. 5.

“I’m pretty sure (because of) intractable break-ins that the police were not able to stop, needles everywhere and all sorts of things,” he said. “I spent a fair amount of money really trying to do a little rehab on the old Denny’s site, and then the homeless or whoever caught it on fire once or twice.”

As part of his vision for the Denny’s property, which is just under 2 acres, Sanders said he’d like to add 24/7 restaurants at the site that would be available to motorists coming off the interstate.

One such restaurant Sanders would like to see: a revival of the Springs Orleans restaurant, which was part of the downtown Mining Exchange hotel when he co-owned that property. The Springs Orleans was closed by a Memphis, Tenn., hospitality group when it bought the Mining Exchange in 2022 and has been replaced with a different restaurant concept.

In fact, attorney John Goede, with whom Sanders owned the Mining Exchange and with whom he’s owned The Antlers hotel and The Famous Steak House in downtown Colorado Springs, has joined him in the Denny’s site project.

Also at the site, Sanders hopes to have multiple electric-vehicle charging stations. And he said he thinks upper-floor condos would be popular at the site, given what would be unobstructed views of Pikes Peak, Cheyenne Mountain and the Front Range.

To make the mixed-use building a reality, Sanders said he’s poised to seek financial help via the Colorado Springs Urban Renewal Authority and is in early talks with the agency about the possibility of gaining an urban renewal designation for the property.

An urban renewal designation, which would require City Council approval, would allow increased property and sales tax revenue generated by the property’s new development to be used to help developers pay their costs of roadwork, sidewalks, utility upgrades and other public improvements.

That financing tool serves as an incentive for developers, encouraging them to invest in blighted areas that otherwise would sit idle.

With an urban renewal designation, Sanders said, “I’m going to be able to do something incredibly cool right there that will be the opposite of an eyesore, it’ll be hopefully iconic in a certain way.”

Jariah Walker, executive director of the city’s Urban Renewal Authority, said via email that he’s talked with Sanders and told him the site, indeed, needs redevelopment, though he added he’ll want to know more about Sanders’ proposal, its costs and other details.

Sanders will need to formally submit his urban renewal application; if it looks feasible, it would be presented to the Urban Renewal Authority, which would decide whether to move forward with it.

“The site has high visibility and is creating blighted conditions that have negative ripple effects,” Walker said. “It’s important to get a great project there that will anchor that portion of the entrance to downtown.”