Phil's Blog

Observer November 2009

November 8, 2009
ABOR Observer
November 2009

Top Stories —
Committee recommends involuntary historic designation
More than a year and a half after it originally convened, Aspen’s Historic Preservation Task Force was so badly split that it in effect delivered two separate reports to City Council.

There is the group’s “official report” which has the full support of just 10 members of the 21-member task force. And then there is the “minority report,” which was crafted by nine members of the task force.

The minority group has a property-rights orientation that calls for an incentive-based program that encourages property owners to seek historic designation. The majority group, on the other hand, believes historic preservation is an important community value that cannot be left to the whims of individual property owners.

The majority recommends involuntary historic designation of all the post-war properties currently under the jurisdiction of Ordinance 48, and the creation of a historic overlay district to govern future development at the West End campus of the Aspen Meadows, Aspen Center For Physics, Aspen Music Festival & School, Aspen Institute.

The majority report also notes that the current system provides development incentives for owners of historic properties, rather than preservation incentives. It provides a number of recommendations for creating incentives for people not to redevelop their land.

One area of broad agreement on the task force was around the method for determining a property’s historic relevance, and thus its place in the historic inventory. The proposal calls for a tiered review system that allows for properties to be reviewed that puts them into context within the historic preservation program.

“We agree on how to determine the historic relevance of a property,” a Task Force member told ABOR. “But we sure don’t agree on what to do about that property afterwards.”

City Council is expected to take up the recommendations in the coming months.

Jerome fight a win-win for note holder
Chicago developers Fred Latsko and Mark Hunt, who own the $38 million note for the Hotel Jerome, appear to be in a win-win situation no matter the outcome in their legal battles with the current ownership group. They will likely either end up with control of Aspen’s most iconic hotel, or with several million dollars in their pocket.

Latsko’s and Hunt’s Jerome Property LLC filed a lawsuit last month in Pitkin County District Court demanding that the Hotel Jerome be sold at auction.

The suit claims that owners David Pisor, Stephen Kisielica and LCP-Elysian have defaulted on their original $48 million loan, secured in May 2007 to finance the $52.2 million purchase. The mortgage matured in May 2009 with about $38 million still owed. Jerome Property LLC purchased the note this summer at a substantial discount – reportedly for between $25 million and $30 million – from an arm of Lehman Bros., the collapsed investment bank.

Meanwhile, Pisor and Kisielica, also of Chicago, have filed their own lawsuit to stave off foreclosure proceedings. A New York Court ruled in their favor – that there are grounds for a case to be made that Jerome Property LLC improperly impeded LCP-Elysian's ability to extend its mortgage.

LCP-Elysian is expected to ask the court in Colorado to delay foreclosure proceedings until the case in New York is resolved.

If LCP-Elysian is ultimately forced into foreclosure, Latsko and Hunt could take over the Jerome for about half the amount their predecessors paid for it. And if Elysian is able to satisfy the debt remaining on the mortgage, Latsko and Hunt will likely reap several million dollars more than they paid for the note.

Pisor said the legal wrestling will not keep the Hotel Jerome from its renowned service.

Wall Street Journal writes about Aspen RE
The Wall Street Journal published a story about the woes of Aspen’s real estate market on Friday, Oct. 30. The story can be seen online at: http://online.wsj.com/article/SB10001424052748703574604574499413715927316.html

ASPEN —
Wheeler expansion moves closer to approval
Aspen City Council wants more details about who pays, how the space would be used and the overall public benefits before it approves a proposed $30 million expansion of the Wheeler Opera House.

Wheeler Opera House Executive Director Gram Slaton told the council that the 32,000-square-foot expansion would be funded by the facility’s $27 million endowment fund. The Wheeler is looking for another $3 million for the expansion on the lot immediately west of the existing opera house.

The addition would accommodate up to 265 patrons. The Wheeler currently seats up to 503. Wheeler officials estimate the new space could play host to 30 Wheeler events, 50 events presented by local arts groups, 100 movie screening and 20 rehearsal dates. There would also be room for commercial uses and at least one residence.

Burlingame neighborhood drives hard bargain with city
Homeowners at the Burlingame Ranch affordable housing development agreed to allow 22 more units to be built in their neighborhood, but not before extracting in hundreds of thousands of dollars worth of concessions from the city of Aspen and the Housing Authority.

The agreement will increase the number of units from 236 to 258 – 13 of which will be single-family homes. The city has been reluctant to add single home lots, given that the existing lots have required heavy subsidies.

The city agreed to lift the $60 monthly homeowners due that had been committed to paying for bus service to Burlingame and forgive $66,000 in unpaid transportation fees. The city agreed to build 28 additional parking spaces, and put $25,000 toward completion of the Commons Building.

Little Nell contractor files multi-million dollar lien
The general contractor for the Residences at Little Nell is claiming that the property’s developer owes $6.7 million in unpaid bills related to development of the luxury fractional ownership next to the Silver Queen Gondola.

County records indicate that Swinerton Builders filed a $12.6 million lien “for construction materials and services” against Residences at Little Nell LLC, the developer of the 26-unit project, as well as the condo association and the individual owners. Swinerton subsequently filed a “partial release of lien,” which brings the debt down to $6.7 million.

Prior to the Swinerton filing last month, the Residences at Little Nell has been subject to $715,000 in liens filed by seven subcontractors. All of those liens have been released.

City Council puts hold on pricy project
Sticker shock led Aspen City Council put a hold on a $2.8 million plan to build five apartments at the Aspen Business Center that would house city employees.
The project is slated for sale as category 3 or 4 ownership units. Both categories require relatively healthy subsidies – $475,000 for the one-bedroom units and $250,000 for the studio – to support buyers in the middle income range. Construction costs were estimated at $560/square foot.

Councilman Dwayne Romero noted that the project was originally supported by a 2005 council made up entirely of different members from the current council.

“This project was approved, frankly, in a different context,” he said.

The city manages 48 units that are exclusively for its employees.

Homeowners could get help
The city of Aspen and Pitkin County pledged $117,000 to help homeowner associations at affordable housing projects assess long-term maintenance needs.

The money will cover 70 percent of the costs for studies identify capital reserve needs at more than 50 affordable housing projects. Individual homeowners’ associations will be on the hook for the remaining 30 percent.
The Aspen-Pitkin County Housing Authority has also hired an attorney to help homeowners associations at affordable housing complexes to work through the complicated processes of building capital reserves and how to collect assessments to cover heavy investments will be required for upkeep as the properties age.

Aspen Walk gets more time
A one-year extension was granted to Aspen Walk LLC, the development firm that plans to build 14 free market condos and 18 affordable housing units on the city's east side. The extra time was granted by City Council to allow the company time to sort out legal issues with two of its investors — one of whom was indicted in a Ponzi scheme.

That investor, Tom Petters of Minnetonka, Minn., is accused of running a Ponzi scheme in which he's accused of pocketing $3.5 billion. He has been in jail since September 2008 for his alleged involvement.
Aspen spending $100K on owner’s rep
The Aspen City Council agreed to spend $100,000 to hire a Phoenix firm to act as its owner's representative in the proposed $30 million expansion of the Wheeler Opera House.

The decision is in response to recommendations made from an outside auditing firm hired last year to propose changes in the way the city manages projects after issues came up over its management of the Burlingame project

Aspen considers overhauls
The Aspen city government plans to spend more than $3 million overhauling the roof and drainage systems of the Rio Grande parking garage, as part of its $17.6 million capital budget for 2010.

Pitkin County —
Lien pace slows
During the first half of 2009, nearly 80 liens per month were being recorded in Pitkin County. That pace has since slowed to just over 60 liens per month from July through September.

There have been 671 liens recorded from January through September of this year, more than twice the number filed in all 12 months of last year, according to county recording supervisor Ryan Keith.

Commissioners harsh Roaring Fork Club
The Pitkin County Commissioners had little nice to say about revisions to the Roaring Fork Club’s proposes expansion east of Basalt, but they may be all bark and no bite.

The new proposal calls for 12 cabins up to 5,000 square feet each, and 16 multi-family employee housing units. A10,000-square-foot spa and a 23,255-square-foot, relocated golf maintenance facility are also part of the plan. A previously proposed kids' camp facility has been dropped.

The original cabins at the golf and fishing club are 2,400 square feet and commissioners weren't pleased with the larger sizes requested in the proposal. They also voiced concern that the spa alone could employ 16 people, using up all of the proposed employee housing. Commissioner Rachel Richards also questioned the “livability” of the 16 employee units in a 10,450-quare-foot building.

Basalt, not Pitkin County, has jurisdiction over the proposal however, so the county’s comments are just advisory.

Pitco open space board pans Sutey swap
The Pitkin County Open Space and Trails Board voted unanimously to recommend against a proposed swap involving large parcels near Carbondale, citing philosophical qualms with privatization of public lands and doubts that would be a fair trade.

Billionaire retailer Leslie Wexner purchased the 513-acre Sutey Ranch for $6.5 million with a trade for federal lands in mind, hoping to add 1,287 acres of BLM land to his Two Shoes Ranch at the base of Mount Sopris.

Wexner's representatives say Pitkin County's support for the swap would ease congressional approval. The BLM land is in Pitkin County and the Sutey Ranch is in Garfield County.

Pitkin County officials have been particularly reluctant to support a swap that reduces public lands in Pitkin County in exchange for new land in Garfield County, where no open space program exists.

PitCo moves on mining claims
The Pitkin County Commissioners voted to acquire about 54 acres of mining claims on the back of Aspen Mountain. The $750,000 purchase was approved using funds from the county's Open Space and Trails Program.

Stirling “Buzz” Cooper has agreed to sell the county the acreage, which includes an existing hiking trail and has the potential for additional trail development.

Commissioners cool to housing loan request
A proposal by the Aspen Community Foundation to create a new nonprofit to administer a $3.3 million loan fund to support private and public-private worker housing projects received a cool response from Pitkin County.

The Foundation asked for $3.15 million from Pitkin County’s housing fund, which would be supplemented by $150,000 in privately raised donations, to help developers with the pre-construction costs. The money would go to developers of qualifying projects to cover up-front costs, with a short, two-year payback schedule.

The commissioners did not love the idea, but they didn’t nix it either, directing County Attorney John Ely to research whether it’s legal.
Smuggler pine beetle experiment continuing
A team of foresters has started examining a large swath of Smuggler Mountain that received extensive treatment to deter the assault of the Mountain Pine Beetle.

More than 250 acres of publicly and privately owned lands on Smuggler were treated in an attempt to create a zone where the effects of the beetle epidemic could be reduced. Early results show that some trees have been attacked within the area, although it is too early to report the actual outcome of the experiment.

The mountain pine beetle has killed off more than 50,000 square miles of ponderosa pine forests in British Columbia, and more than 2 million acres of lodge pole pine forests in Colorado.
.

Snowmass Village —
JAS eyes move to Buttermilk
Jim Horowitz, CEO and president of Jazz Aspen Snowmass, said there are several reasons for moving the popular Labor Day Festival from its traditional Snowmass Village venue to the base of Buttermilk Ski Area.

Although the move is not official, Horowitz made it clear that there is a good chance it will occur. The problems with the current Town Park site across from the rodeo grounds in Snowmass Village include:
a. Capacity constraints that limit the level of talent JAS can afford; the Buttermilk venue can take as many as 18,0000 people versus 8,000-9,000 in Snowmass Village;
b. Possibility of a reduced contribution, from $175,000 to $150,000, from Snowmass' marketing board;
c. Increased competition from venues and festivals in larger markets such as Denver;
d. The stall in construction activity at Base Village had been “a setback to the overall momentum.”

Aspen Skiing Co. Senior Vice President David Perry said the company would rather see it in Snowmass.

Base Village readies for second season
After a long year of bad news, Base Village will have some things to brag about when the ski area opens on Thanksgiving weekend.

The 173-room Viceroy hotel, with two restaurants, a bar, and what it hopes will be a lively pool scene, opens Nov. 25. And three restaurants that opened last year, Sneaky’s Tavern, The Sweet Life and Junk/Liquid Sky, will be open again this year, reportedly with renegotiated leases to help their bottom line. A fourth restaurant, Japanese comfort food eatery Buchi, is planning to open as well.

The parking garage will also have 240 spaces available this year, up from 178.

Base Village currently has about a dozen businesses, including retailers and restaurants.

Two unfinished buildings originally supposed to be opening this ski season — the arrival center and the Little Nell Residences Snowmass — will be wrapped in plastic again this winter, however.

School district housing project moves forward
Emboldened by an intergovernmental agreement signed with the Aspen School District, the Snowmass Village Town Council didn't hold back on its criticism of the district's proposed 15-unit staff housing project on Owl Creek Road.

Both the district’s Board of Education and the Snowmass Village Town Council approved two documents that resolve how the process for the housing project will move forward. It envisions three buildings along Owl Creek Road between Anderson Ranch Arts Center and the Fairway III employee housing.

Town Council members raised issue with the site of one building, which is much closer to the Anderson Ranch arts center than originally discussed. Traffic impacts and parking are also the subject of scrutiny.

Basalt —
Basalt approves 110-unit housing project
The Stott’s Mill development received final approval from the Basalt Town Council last month, marking the first major development approval in approximately two years.

Stott's Mill will include seven free-market residences and 103 affordable housing or local-oriented units along Southside Drive, the road to Basalt High School. When completed, the project will also include a 3,300-square-foot day-care facility and a 4.5-acre park.

Development in Basalt was halted by a development moratorium in the spring of 2008. The town used the moratorium to craft new growth management and housing regulations.

Basalt chooses shooting range committee
The Basalt Town Council chose five Basalt residents to serve on the town’s new Shooting Range Advisory Committee, which is charged with gathering citizen input on the Colorado Division of Wildlife’s shooting range at Lake Christine.

The shooting range is just outside town boundaries, but gunfire from the range can be heard throughout much of old town Basalt, the Elk Run subdivission and other parts of town.

The Basalt residents who applied, and who were selected to volunteer on the committee, include Meredith Bristol, Michael Gross, Mike Luciano, Bill McEnteer, Ann Nichols and Lucas Peck. Dave Bellack and Chris Leintz were chosen as alternates.

Basalt water tank costs could escalate
Basalt's plan to build a one million gallon water tank to serve the Southside neighborhood could be significantly more expensive than originally thought.

Pitkin County District Judge James Boyd ruled that the town must post a $640,000 deposit before it can take possession of an easement across private land for a water pipe. The town had offered the property owners $25,000 for the easement, which was appealed. A final value has not been determined.

Downvalley/regional —
Carbondale considers raising building heights
Some of Carbondale’s Town Trustees said they had “no problem” with a proposal to raise maximum building heights to 42 feet along Main Street in the downtown area.

The proposal is scheduled to go before the town’s Planning and Zoning Commission for further discussion, and come back to the board of trustees on Jan. 12.

It calls for “stepped back” upper stores to relieve the “canyon effect” of taller buildings and permit the sun to shine.

Commissioners eye vacant land on the Fork
The fate of the Cattle Creek Colorado property came up at joint session of the Pitkin County Commissioners and the Glenwood City Council when a Glenwood councilman suggested the 289-acre parcel could be had for $10 million.

Pitkin County Commissioner George Newman called the sum a bargain price for a large swath of land along the river in the lower valley, considering the opportunities for a partnership among governments to acquire it for both open space and affordable housing.

Open space proponents rally in Garfield County
A group of open-space advocates, spurred by a recent controversy surrounding a proposed open space swap for private land, has won Garfield County's cooperation in at least considering a countywide open space program.

Supporters urged the County Commissioners to endorse a study by the nationally respected Trust For Public Lands as to how the county could formulate and fund an open space program. Two commissioners agreed that a study would be a good idea and pledged to formally request that the study be undertaken.
The Trust for Public Lands will be conducting a survey at its own cost, a service it provides to local rural communities where money for such studies is scarce.

Iron Bridge assets may be seized
The Garfield Board of County Commissioners is poised to ask a bankruptcy judge for permission to go after cash deposited in escrow accounts and other remedies against the Iron Bridge subdivision south of Glenwood Springs as a way of making sure certain improvements are finished.

Garfield County updating comp plan
Garfield County will begin updating its Comprehensive Plan, the document that guides the county in land-use decisions, next month.

The process will end with adoption of a new, 20-year comprehensive plan in the fall of 2010, if all goes according to schedule.

Congresswoman seeks wilderness protection
Rep. Diana DeGette, D-Colo., introduced a draft wilderness bill intended to protect vast tracts of public land, including a portion of Thompson Creek west of Carbondale, Pitkin County’s Eagle Mountain, and the controversial Roan Plateau near Rifle, at the heart of a battle between conservationists and the energy industry.

The document is a discussion draft, meant to provoke input before the actual legislation is submitted. It would mostly impact lower-elevation areas often ignored in wilderness protections on Bureau of Land Management land.

Called the Colorado Wilderness Act, it includes 34 proposed wilderness areas. It is separate from the Hidden Gems Wilderness proposal, which is in formative stages right now.

YOUR PSF DOLLARS AT WORK:

STATE:

SB 080 – Concerning Precipitation Collection, Limited Expenses – Allows for the collection of precipitation from up to 3,000 square feet of a roof of a residence that is not connected to a domestic water system serving more than 3 single-family dwellings. Under the provisions of the bill, the water collected must be used for: ordinary household purposes, fire protection, watering of animals/ livestock, and irrigation of not more than 1 acre of gardens and lawns. This proposal assists property owners in areas where residences lack modern water infrastructure and would aid several regions of the state which experience minimal precipitation levels or suffer well-water shortages.
Position: Support
Status: Signed by Governor

NATIONAL:

Take Action: Help Extend the Homebuyer Tax Credit
We have all seen first-hand the positive impact the first-time homebuyer tax credit is having on the real estate market recovery. As the expiration date for this successful program looms, we ALL need to make sure that Congress hears from us about the positive impact this program has had and ask them to extend it, and expand it, so that we can continue to see our markets fully recover. TAKE ACTION

Sotheby's International Realty is a registered trademark licensed to Sotheby's International Realty Affiliates LLC. Each Office Is Independently Owned and Operated. | © All Rights Reserved