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The Hotel St. Cloud in downtown Cañon City is undergoing a $13 million renovation. A brownfields grant to the city helped the property owner assess projected cleanup costs, which helped secure the loan for the project. (Mike Sweeney, Special to The Colorado Sun)

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CAÑON CITY — At an intersection along Main Street, Rick Harrmann stands across the street from the scaffolding-encased St. Cloud Hotel, where a $13 million renovation aims to transform the four-story, 19th-century building into a catalyst for redefining downtown.

Harrmann, the city’s economic development manager, touts the plans for this property and other parcels nearby that could jumpstart a renaissance emanating from Main Street in all directions, including south across busy U.S. 50 to the banks of the Arkansas River.

“This will transform downtown, starting in 2024,” he says. “But there are a lot of surprises in a project like this.”

Buried within — and sometimes beneath — all the promise for everything from hospitality to housing lurks a potential dealbreaker. Environmental contamination can bedevil buyers, sellers, lenders and others who might be deterred by the unexpected discovery of asbestos, lead paint or even long-buried gasoline tanks, like one that may or may not lurk under the pavement of the long-defunct service station from which Harrmann views the hotel.

Cañon City, as it fine tunes and energizes an ambitious, rolling 20-year comprehensive plan, has — like many other small to midsize Colorado towns and rural areas — leveraged money from the Environmental Protection Agency for what’s known as brownfields projects. Those funds help with the expense of identifying the invisible hazards that can stall or even kill economic development.

While much of the brownfields money finds its way to urban locations, the EPA has in recent years focused on rural and underserved areas to identify and in some cases help clean up contaminated properties. Recently, that effort was bolstered by $169 million in competitive grant money nationwide — $50 million is awarded in an average year — as a byproduct of the Bipartisan Infrastructure Law.

Now, EPA officials have redoubled efforts to encourage applications from communities that have seen long dry spells of investment, in the hope they might benefit from resources to clean up properties that could attract development if the environmental challenges are clearly defined and addressed. Brownfields grants already have triggered a wide variety of projects across Colorado:

  • Montrose has used EPA grant funding to, like Cañon City, revitalize its historic downtown district and the Uncompahgre River corridor. Two grants totaling $700,000 have gone toward 27 environmental site assessments that led to development, including a pet supply store on the site of a former newspaper building where the study found lead paint, asbestos and underground ink tanks.
  • Brownfields grant money led to Trinidad’s cleanup last year of the Fox West Theatre, while a former petroleum transfer and storage site dating to the 19th century benefited from an environmental assessment that led to a new restaurant and plans for a hotel.
  • In Craig, an assessment this past summer found no environmental issues on a property that was then sold to investors who launched a distillery.

For Cañon City, the availability of federal money to address environmental concerns may not be a major driver of local redevelopment — boosters like Harrmann point to its renowned climate, abundant recreational opportunities on the surrounding landscape and a location that’s rural but an easy drive to larger cities. New eyes are drawn to the city, he says, because “there’s $60 million in projects going on right now.”

But within the complex financial underpinnings of many projects, assistance with environmental concerns can provide one more tool to smooth the process, a particular boon in smaller communities with fewer resources. Denver-based Unbridled Holdings III, which purchased the St. Cloud Hotel property, has invested in a chain of seven properties in the downtown area — interlocking parts of a broader revitalization strategy that has been nudged along by EPA funding. 

“The brownfields grant helped them, to some extent, secure the lending that they needed,” Harrmann says. “And if we didn’t have the assurance of lending, then we may not have the hotel being renovated. Once they’re up and running, they will transform downtown into much more event space, pedestrian access, mall-type space for events because you’ll have people milling from location to location to location.

“So really, all of this hinges on this building. This is going to be the catalyst project downtown.”

Cañon City, founded in late 19th-century in the Royal Gorge region, has about 17,000 residents. The town is seen here from a vantage point on Skyline Drive, a scenic road built many years ago with prison labor. (Mike Sweeney, Special to The Colorado Sun)

Federal money seeking spenders

Over the next five years, the EPA aims to put $1.2 billion into brownfields project grants across the country — and it’s looking to create partnerships in underserved communities where it hasn’t traditionally operated, says Christina Wilson, acting branch chief for the EPA region that includes Colorado.

The agency has the money. Now it’s looking for more partners to spend it, with the goal of eliminating environmental hurdles to redevelopment by helping with the expense of assessment and cleanup. (Current brownfields grant opportunities can be found here.)

“Oftentimes, a property won’t be touched because people are afraid that there is contamination there,” Wilson says. “We can come in and assist with doing an assessment, pull a wall away to really understand what the situation is there.”

She stresses that the assessed properties are only those identified by the participating communities, and the EPA’s role is merely to assist.

“That’s a really important distinction,” Wilson says, “one that folks always make because they think that EPA is the regulator. But we are not the regulator with this program.”

The city wants to revitalize the former Skyline Steel facility on the banks of the Arkansas River but must first deal with the removal of asbestos from the site. (Mike Sweeney, Special to The Colorado Sun)
A cluster of asbestos-riddled buildings on the former Skyline Steel site prompted the city to buy the property. Now it’s looking at leveraging an EPA grant to help pay for cleanup of the hazardous materials. (Mike Sweeney, Special to The Colorado Sun)

In urban areas, entire business districts have been built on the brownfields concept. The Belmar shopping area in the Denver suburb of Lakewood stands as one example that took advantage of the grants when it was built in 2004 at the site of a failed 1960s-era indoor shopping mall, several years after the program began in 1995. 

Its core involves assessment, which can proceed in two phases. 

Phase 1 gleans information from property records and a site inspection. Phase 2 digs deeper and can involve drilling monitoring wells to test groundwater, taking soil samples or examining a given building to see if it contains regulated materials, such as lead-based paint or asbestos. Those measures, in turn, can define a cost estimate for any cleanup that needs to be done — or, if the property is clean, greenlight development.

If cleanup is required, private property owners are on their own but can work with the state to leverage low interest loans. But publicly owned properties and nonprofits can access money from EPA multipurpose grants, part of the brownfields program, for cleanup. Cañon City has moved to acquire some properties ripe for redevelopment to take advantage of that rule. 

Brownfields grants typically involve communitywide assessments of multiple properties. That’s how the program took off in Cañon City — with an assessment grant covering Fremont County that examined 15 properties and also offered a market analysis and recommendations for opportunities to spur economic growth in the area, explains Greg Davis, an EPA brownfields project manager for the region.

“The one thing that the brownfields program has really done is it’s taken a lot of uncertainty, fear of the unknown, out of a number of properties to allow Cañon City to reach their goals,” he says. “With a lot of their larger historic properties, and a lot of larger industrial properties, there’s just a lot of unknowns. And that really makes an investor nervous.”

That initial $600,000 assessment grant in 2018 led to another $30,000 Land Revitalization Technical Assistance grant last year to create a design for redevelopment of the historic Holy Cross Abbey campus on the city’s east side, a 190-acre, privately owned parcel that currently includes a winery.

Also in 2021 the city won an $800,000 multipurpose grant that paid for environmental assessments targeting the Arkansas Riverfront and Main Street corridors. This year, a “targeted brownfield assessment” started to look closely at the site of a former downtown dry cleaning operation — the process uses chemicals that typically pose problems when it comes to redevelopment — as well as a few other specific locations.  

“It’s a total makeover of the city and it’s on their terms and meeting their needs,” Davis says. “You see the enthusiasm there and it’s contagious.”

The city reimagined

High atop Skyline Drive, the scenic, one-way road on the razorback ridge overlooking Cañon City, Harrmann can cast his gaze east and connect all the elements — some merely ideas, some works in progress — of the city’s ambitious reimagining.

As an avid cyclist who has often climbed the 2.6-mile stretch of pavement originally built by local prison labor — the drive overlooks the historic “Old Max” correctional facility — he pays particular attention to the way the city’s plans have incorporated an inviting network of hiking and biking trails. Ultimately, it seems, recreation and the local economy will be woven seamlessly and conveniently together, both figuratively and literally.

Canon City Economic Development Manager Rick Harrmann walks the former Skyline Steel site near the Arkansas River. Harrmann is an avid cyclist who often rides the network of trails that lace the landscape around Canon City. (Mike Sweeney, Special to The Colorado Sun)

Just to the south of U.S. 50, the Arkansas River winds to the east, hidden beneath a lingering canopy of green in the warm autumn of a place that sometimes bills itself as the climate capital of Colorado. But it’s there, on the banks of a waterway that has seen $600,000 in improvements that set the stage for a popular whitewater park, that another significant economic corridor awaits.

It’s one more piece in an ongoing transition toward carving out Cañon City’s place in the state’s economic expansion. Redevelopment in what for years bore the stigma of a prison town — seven correctional facilities currently operate within the city limits, with four more federal facilities in close proximity — faces all sorts of challenges. 

The city has wrestled with the transition from historic industries like mining to its burgeoning reputation as a hub for tourism and especially outdoor recreation; upside-down commuter demographics that show a majority of Fremont County residents are employed outside the county and a majority of the workforce drives in from somewhere else.

And then, like most towns faced with the prospect of renovating, replacing or restoring generations of historic structures, it finds itself navigating the tricky terrain of assessment and remediation of properties that long predate current environmental standards. 

The area is no stranger to contamination. In 1984, the EPA designated a Superfund site in Lincoln Park, just south of Cañon City, that includes the Cotter Corporation’s 2,600-acre uranium mill, which ceased operation in 1979.

“That site really was the first one here that people realized that, you know, we’ve got to do something with the environmental conditions in the area. Otherwise land is going to sit there vacant forever,” Harrmann says, noting that the concern eventually extended to industrial sites closer to town. 

From a redevelopment standpoint, he adds, you have government agencies, lawyers and insurance companies on the one hand who make determinations and decisions based on preventing worst-case scenarios. Developers, on the other, assess risk and make an investment determination.

The brownfields program, he says, “to some extent bridges that gap.”

Revamping the riverfront

While the Arkansas River has played a key role in raising the city’s profile as a recreation hot spot, and the nearby Royal Gorge (and its namesake railroad) have cemented its tourism credentials, the riverfront’s potential has long been an enticing element of the economic development picture. But the missing piece lies on the river’s north side, across from popular Centennial Park. 

The Arkansas River contributes to Canon City’s tourism economy with whitewater rafting and the state’s famous Royal Gorge Park several miles upstream. The city is hoping to develop the north bank of the river. (Mike Sweeney, Special to The Colorado Sun)

The former site of Skyline Steel, a cluster of asbestos-ridden structures left behind when the company moved to a larger facility, needs remediation. The city purchased the property in 2019 in hope of stimulating growth and now aims to use EPA grant money to clean it up. Acorn Petroleum, which operates a gas station with above-ground tanks on an adjacent lot, has been offered a land swap by the city to relocate.

Harrmann says that while no hard proposals for redevelopment in that part of the corridor have materialized, a couple of development investors have approached the city with interest in the area. 

Just a few blocks away, the St. Cloud Hotel property — the 36-room facility, which has gone by several names over the years, will be rechristened the Hotel St. Cloud — continues to show progress as the centerpiece among companion projects advanced by the Unbridled Holdings III.

The firm discovered the building after it had restored some of Denver’s Capitol Hill mansions, and founding partner Stan Bullis joked with his team after the last of the Denver restorations that they’d better find him a new project. Shortly after that, the hotel went up for auction, Bullis had one of the partners bid and ended up buying it for $88,000.

Restoration of historic buildings carries its own challenges, almost always including some surprises along the way, says Lindsay Wyss, the company’s chief of staff for Cañon City. One example: More than 20 layers of lead-based paint blasted off the exterior brick revealed the ghostly image of an early hotel sign.

So when it came to the brownfields grant, Unbridled Holdings III was happy to tap into extra funding that reduced the element of surprise.

“So what we’ve learned with these projects is you have to heavily invest in the project to get it shovel ready before any banks or outside funding will really take you seriously,” Wyss says. “One of those prerequisites to be shovel ready is having as many environmental assessments conducted as possible as well as getting the building a ‘clean bill of health.’”

The grant allowed for a building material survey that flagged additional materials that needed to be dealt with before construction could begin. One other thing about restoring the hotel: The developer couldn’t add to the structure vertically, so to make the economies of scale work for the hotel, the project’s footprint essentially grew.

Additional properties nearby soon came into the mix. Just a few blocks north of the hotel, work proceeds slowly at a site known as the St. Scholastica Campus, where the developer will feature suites to augment its hotel’s traditional rooms; another developer has plans for condos and single-family homes on the 4-acre site.

The Cabrini building, built in 1881, was one of the first sites in Canon City to undergo a brownfields property assessment through an EPA grant. Part of the former St. Scholastica Academy, it’s part of a four-acre campus being redeveloped to include hotel suites, condos and single-family homes. (Mike Sweeney, Special to The Colorado Sun)

Wyss says the company didn’t so much find Cañon City as the city found them. 

“We just feel called to really participate in this town and hopefully redirect the future a little bit,” she says. “Stan’s got a dream to restore cities. And this is just the first one we sort of discovered.” 

Plans for updating Cañon City extend in all directions. Just a few blocks west of the hotel project, a historic clock tower stands sentry at Third and Main streets, where a long-gone filling station means that more environmental work could be needed to transform the space into a gateway leading across U.S. 50 to the river. 

Initial assessments indicate that the underground storage tanks were properly cleaned up, but if additional contamination were to be found beneath them, the tanks still could need to be unearthed. Eventually, there’s potential for commerce on the now-bare pavement — converted boxcars or perhaps tiny homes adapted as “retail incubation” fixtures, with successful vendors graduating to more permanent spaces downtown. 

To the east, Harrmann notes that the EPA grant that helped create a concrete plan for redevelopment at the Abbey represents a “huge example” of how the brownfields program has put efforts on a faster track. Today, the campus’ 33 buildings include an event center, winery, vineyard and a DOC training facility, and cattle graze on more than 100 acres of leased grassland. But zoning changes will also allow for a mixed-use main street area to include housing and a senior living facility.

And as with other redeveloping corridors in the city, the abbey property will be designed to connect to the Arkansas River and the area’s increasingly popular web of hiking and biking trails.

It remains a long-range proposition, but now there are signs of forward progress.

“It’s very possible if we didn’t have anything done there, if we didn’t put in the initiative to start working toward development for that property and then get that technical assistance grant to help us plan their property, it could sit there for decades longer,” Harrmann says.

“So it’s all tying together very nicely. It just takes a while to get things rolling.”

Kevin Simpson

Kevin Simpson

Kevin Simpson is a co-founder of The Colorado Sun and a general assignment writer and editor. He also oversees the Sun’s literary feature, SunLit, and the site’s cartoonists.