A Castle Rock developer is gearing up to knock down a big chunk of the long-vacant Festival Shopping Center in Centennial and swap aging retail for a built-to-rent townhome community. The plan would clear roughly 6.7 acres of underused storefronts and bring in about 114 single-family attached rental units along the South University Boulevard corridor.
According to the Denver Business Journal, the latest filing zeroes in on 8170 S. University Boulevard and outlines a roughly 6.7-acre demolition area to make room for the new neighborhood. The Business Journal, in a May 13 report, first spotlighted the developer’s renewed push to turn the languishing shopping center site into housing.
City records show the project - branded as the Residences at Festival Center - already cleared a key political hurdle. As detailed by the Centennial Citizen, the City Council approved Resolution No. 2025-R-22 on June 17, 2025, allowing 114 single-family attached townhomes on about 6.68 acres. The application came from Kimley-Horn on behalf of property owner Kwenda Inc., with Lokal Homes listed as the homebuilder.
What the plan would build
Project materials describe a mix of two-, three-, and four-bedroom townhomes averaging roughly 1,374 square feet. The units are pitched as modern rentals with updated finishes and smart-home features, clustered around shared green space and a pocket park.
Coverage from Naked Denver notes plans for internal walkways and grill areas meant to tie the new community into surrounding homes and nearby shops rather than wall it off. Traffic analysis included in the submission found that the housing plan would generate far fewer daily vehicle trips than the old retail, and local reporting pegs full buildout in late 2027 under current estimates.
Timeline and approvals
City meeting records and site plan documents indicate the proposal was adjusted after public feedback, trimming density and adding buffers between new buildings and neighboring businesses. Construction is expected to start in 2026, based on city presentations and developer materials discussed at the Council hearing.
The approved site plan leans on existing water and sewer lines, adds new on-site stormwater detention, and calls for bike storage plus individual trash pickup for each building. Those details are laid out in public documents reviewed by the Centennial Citizen.
Why this matters
Converting struggling strip retail into housing has become a go-to move in cities wrestling with both empty storefronts and a housing crunch, especially when the sites already sit near jobs, services, and transit. The American Planning Association has highlighted these retail-to-residential makeovers as a way to boost housing supply while breathing life back into sluggish commercial corridors, though not without tradeoffs for existing businesses and shoppers.
The Denver Business Journal first reported the latest filing and fresh renderings. From here, the next public checkpoints will be final building permits and any site plan tweaks posted to the city’s records. Neighbors and businesses along South University Boulevard will want to keep an eye on Centennial’s online planning portal as demolition and construction move closer to reality.
