Phil's Blog

Aspen Board Of Realtors Observer

October 2009

Top Story —
A walk on the wild side of affordable housing development
The city of Aspen has been getting imaginative with its affordable housing program, undertaking or seriously considering several “outside the box” initiatives.
In one case, private developers are lining up to build affordable housing on city-owned land. Approximately a dozen developers submitted bids to build low- and moderate-income affordable housing projects on two publicly owned parcels in Aspen.
Two years ago, the city and housing authority had trouble finding anyone to bid on affordable housing developments. Now they hope to use public-private partnerships to develop vacant parcels more quickly than they would have by waiting for the necessary tax dollars to accumulate in the RETT-supported housing fund, which is depleted due to several large purchases in the last several years.
In another case, a private landowner is seeking permission to build affordable housing on a West End property and then be allowed to sell mitigation credits to developers in need.
Peter Fornell’s proposal would allow private parties to build affordable housing that is not associated with any other public or free-market development. Each unit would receive a credit that can be sold to developers who need to meet the city’s affordable housing mitigation requirements.
The idea was well received by council, which directed staff to develop amendments to the code for later review.
A third oddity in affordable housing development surfaced last month when, during work on the 2010 budget, the city announced it will continue “taxing itself,” requiring city departments to allocate a portion of their annual budgets toward an internal housing fund.
The program has been under way for two years, and work has already started on a five-unit development at the Aspen Business Center that will be for exclusive use by city employees.
Finally, the city of Aspen plans to purchase two affordable housing units in free-market complexes, remove their deed restrictions and sell them off on the free market. The impetus for the move came after the homeowners associations in the buildings levied large assessments to make building-wide upgrades.

Aspen —

Council not ready to OK Wheeler expansion
Aspen City Council will not grant conceptual approval of the Wheeler Opera House’s proposed expansion until they see a pro forma and a long-term operations budget for the expanded facility.
The proposal includes a new sub-grade theater, expanded lobbies on the second and third floor, a community meeting room, new offices for Wheeler staff and an affordable housing unit.
It has been reduced in size from four to three stories as a result of objections raised at the planning & zoning and historic preservation commissions.

Aspen Art Museum still searching for a new locale
The Aspen Art Museum, which reportedly had its best summer ever, is still looking for a new home. Museum executive director Heidi Zuckerman Jacobson said they have met with various property owners in an effort to find a spot for a new museum. The current 7,000-square-foot facility is considered too small.
Voters last spring rejected the museum’s proposal to build a 30,000-square-foot facility on the publicly-owned Galena Plaza east of the Pitkin County Library.

Jewish center still interested in ranch site
Threats of litigation earlier this summer forced the Jewish Resource Center Chabad of Aspen to terminate its contract to buy the Silver Lining Ranch, a 14,000-square-foot building on 6.5 acres at the end of Ute Avenue on the east side of town.
Former tennis pro Andrea Jaeger, whose Little Star Foundation owns the ranch property, is in an ugly battle with neighbors who are threatening a lawsuit if the sale goes through. Chabad attorney Neil Karbank said Chabad remains interested in the property if the disputes can be settled reasonably in advance. The $13.5 million deal was originally supposed to close in June.

Lodge at Aspen Mountain developers file for bankruptcy
Aspen Land Fund II, the development group that wants to build a hotel at the base of Aspen Mountain, filed for Chapter 11 bankruptcy last month. John Sarpa, a principal with the group, said the bankruptcy was a strategic move to retain control of the property and its future. The filing came after Alpine Bank advised that it had entered into an agreement to sell its loan on the project to a third party who planned to build townhomes approved for the site several years ago. Aspen Land Fund II will continue to work with a citizen task force on plans for a 160,000-square-foot hotel it wants to build in the large empty lots on the west side of Aspen Street beneath Lift 1A.

Hotel Jerome facing foreclosure
Foreclosure proceedings were opened against the owners of the Hotel Jerome in late September.
County records indicate LCP-Elysian Aspen Owner LLC has an unpaid balance of $36,292,781 to newly formed Jerome Property LLC, which holds the deed of trust on the property.
Jerome Properties LLC was formed on Aug. 25 and six days later bought the deed of trust from Aurora Bank, an affiliate of Lehman Brothers Holding Inc.
Elysian Worldwide LLC and Lodging Capital Partners LLC, both of Chicago, purchased the 113,282-square-foot hotel in 2007 for $52.2 million from Oklahoma Publishing, which paid $33.7 million for the property in June 2005.

Stage 3 developers contest foreclosure
Developer Aspen Main Street Properties LP has filed a lawsuit to stop Alpine Bank, from foreclosing on the half-developed property that once housed Stage 3 cinema.
The suit contends the bank has breached its contract to provide $11.1 million worth of construction and financing loans. It seeks to force the bank to provide financing to complete the project.
According to foreclosure documents, the developers have failed to make its monthly payments on its $4.72 million debt to Alpine Bank since May. The property will be sold at public auction on Dec. 13, unless the loan is cured or the courts intervene.

City to implement new environmental regulations
New development in the city of Aspen will be required to meet new standards that minimize environmental impact, beginning on Jan. 1, 2010.
The standards focus on energy consumption, stormwater runoff and air pollution. The new guidelines will set minimum standards, and then provide suggestions for ways a development can exceed those standards.

Aspen shapes global green building code
Aspen’s building code and its top building official, Stephen Kanipe, are being tapped as guides for a new model building code that incorporates energy efficiency and environmentally sound standards.
The International Green Construction Code (IGCC) will eventually provide a template for governments to use in greening up their own building codes without putting in too many man-hours or spending too much money. A draft, which is expected to parrot much of the language in Aspen’s code, is expected to be ready by March.

City hears solar co-op proposal
The Clean Energy Collective, a Carbondale-based firm, is proposing to use the roofs of Aspen’s Yellow Brick and Red Brick buildings for a 400-kilowatt solar panel array.
The plan calls for cooperative ownership among the Aspen electric utility customers who buy shares of the panels. The organization would be similar to the agricultural and food co-ops that exist in Carbondale. Tax credits and lower energy costs would accrue to individual owners.

Thrift Shop moves back to new home
The Thrift Shop moved back into a new building at its longtime location at 422 E. Hopkins Ave. The new building has 2,400 square feet of merchandise space — nearly double the area of the original shop.

Basalt —
Town, developer working to entice Whole Foods
Basalt officials and the developer of Willits Town Center, Joseph Freed & Associates, are examining ways to adjust previous approvals in order accommodate a Whole Foods Market in the commercial portion of the development.
The developer, hampered by the economy, was unable to complete foundation work for a Whole Foods center before June 1, 2009, allowing the grocery chain to back out of its commitment to build in Willits. JFA is also in negotiations with Whole Foods to bring in a smaller supermarket than originally approved. Basalt is listed among “stores in development” on Whole Foods Markets' website.

Stott’s Mill project back in review hopper
The developers of Stott's Mill are moving their project through the approval process, despite the slack economy.
The development would add a mix of 110 deed-restricted and free-market residences on land just north of Basalt High School. The mix includes:
- 35 units with deed-restrictions on price, buyer income and assets;
- 15 resident-occupied units with appreciation caps;
- 53 resident-occupied units without appreciation caps;
- 7 units would be for sale unrestricted on the free market.
The developer wants the town to extend its usual vesting of the approvals from three years to five because of the economic uncertainty. Review of the project continues on Oct. 27.

Midvalley property demolished
The converted ranch house in El Jebel that housed several failed restaurants was demolished last month. Basalt officials say there is no new application for development at the old Orchard Inn property on the southeast corner of the El Jebel traffic light.
The Weigner family converted an old ranch house on the property into a restaurant in the late 1970s. The site housed a succession of failed restaurants, including Cilantro, Calypso and Mermaids. The building has been empty for years.

Snowmass Village —

Related executives opening a bank
Three executives of the Related Companies are about to open a bank, much to the consternation of some Snowmass Village officials. Stephen Ross, founder, chairman and CEO of the Related Cos.,and senior executives Jeff Blau and Bruce Beal Jr. have been successful so-far in their bid to charter “SJB National Bank.”
SJB National Bank plans to start operations with at least $750 million after it gets Federal Reserve and FDIC membership, according to a Comptroller of the Currency notice.
Related, which is the managing partner in Base Village and separately owns six other major properties in the town, will not have any ownership in the bank. Blau owns a condo in Aspen’s Brand Building valued at $2.25 million. Snowmass Town Councilwoman Markey Butler noted her frustration that the executives could find the money to create a bank but couldn’t even camouflage the abandoned foundations that now mar the entrance to Snowmass Village. She suggested that the town point that fact out in a letter to federal bank regulators.

Contractor sues Base Village owner, again
Snowmass Base Village contractor CFC/PCL has filed its second lawsuit in three months against Related WestPac, claiming it is owed more than $3 million for construction management services and concrete work on the Base Village project. The suit claims breach of contract and asks a judge to approve the foreclosure and sale of the properties to satisfy the debt. Those properties include two buildings that have yet to be started, plus the partially built arrival center and Little Nell Residences at Snowmass luxury condo hotel.

Viceroy buyers want out
Seven buyers at the Snowmass Viceroy have filed a lawsuit to back out of their purchase contracts and get their earnest money back. The buyers claim the right to back out their contracts because developer Related Westpac did not file the proper documents regarding the layout of the condominium hotel with authorities.
The seven buyers paid $1.16 million in earnest money for contracts signed between December 2007 and March 2008.
Snowmass approves new chapel

The Snowmass Village Town Council approved a new Snowmass Chapel and Community Center.
The new building will be nearly 30,000 square feet, triple the size of what’s there now, with a height of nearly 60 feet at its tallest point and a 70-foot steeple.

Pitkin County —

Exchange fuels approval of McClain Flats subdivision
Construction of a three-home compound on the site of the historic, 148-acre Stein Ranch on McClain Flats Road has received the nod from Pitkin County last month.
In exchange, property owner Bob Hurst agreed to transfer title to approximately 13 acres to the county, allowing the extension of Sunnyside Trail and the reopening of a rock climbing area known as Gold Butte, and an ice climbing area called Sewer Falls. Both climbing areas have been closed since the mid-1980s.
Hurst, a vice chairman at Goldman Sachs, must also restore 17 acres of degraded sagebrush and place more than 57 acres or his property under a conservation easement.
The three newly approved homes will be limited to 5,750 square feet above ground, and an additional 3,000 feet below ground with the purchase of transferable development rights. The property already includes a home of more than 12,000 square feet. Vested rights on the approval run to October 2020.

Local air service looks strong for the winter
United Airlines has added two additional flights to its schedule this winter: a third daily non-stop to Chicago and a fifth weekly flight to San Francisco.
The airline says it will continue flying 11 flights daily between Aspen and Denver, and three to and from Los Angeles. Delta will fly once daily between Aspen and Atlanta, and eight times a week to Salt Lake City, down from 13 flights last year. Frontier Airlines will provide the same level of service as last winter, with four daily flights between Aspen and Denver.

More parking at Lenado for snowmobilers
Pitkin County approved 10 and 15 new parking spaces for vehicles and trailers just up the Woody Creek valley from Lenado. Snowmobilers came out in force at a recent county meeting on the issue, saying they want to retain access to the public lands they’ve reached through Lenado for two decades.
The county commissioners backed a county staff recommendation, over the protests of Lenado and Woody Creek Road homeowners, to widen the road and create new parking for 10 to 15 vehicles with snowmobiles in tow.
The commissioners said they also wanted signs to be posted that make it clear where parking is allowed and where it is not. They will also ask the sheriff's office to step up patrols on Woody Creek Road.

Skico to lead charge for Pitkin County ‘green' fund
Aspen Skiing Company executive Auden Schendler said the company is ready to take a lead role in the campaign to approve a special financing district for energy upgrades in local residences. Pitkin County is seeking voter approval to issue bonds worth up to $7 million. The money would be made available in the form of loans to commercial and residential property owners seeking to finance energy efficiency improvements.
Repayment would occur over 15 to 20 years through a special assessment to property tax bills. The loans would be attached to the property rather than an individual, so the obligation to repay the loan would transfer to the new owner should the property change hands.

Downvalley/Regional —

Three local neighborhoods among America’s priciest
A median home price just under $3 million makes Old Snowmass — the 81654 zip code — is the 13th most expensive area to buy a home in the country, according to a survey by Forbes Magazine.
Aspen is the 20th most expensive with a median price of $2.74 million. Snowmass Village is 82nd, at a price of $1.76 million. Vail holds the 87th position with a median price of $1.72 million.
The country’s most expensive zip code is 07620, in Alpine, N.J., with a median home price of $4.14 million.
Median home prices in the survey are based on listings rather than sales.

Local governments receive windfall from energy revenues
A new law designed to spread the energy wealth to local communities, sponsored by Senator Gail Schwartz (D-Snowmass Village), means a big financial boost for local governments in Garfield County. This year, Garfield county government will receive $11.64 million from severance taxes and mineral leasing on federal lands, significantly more than the $2.5 to $3 million it usually gets. The town of Carbondale will receive $847,000, more than 12 times the amount it was expecting. Glenwood Springs is slated for a payout of $1,275,174.
In Pitkin County, where very little energy extraction occurs, the windfall is minor, ranging from $1,702 for Basalt to $14,607 for the county government.

Wilderness campaign begins information campaign
A campaign to protect 400,000 acres of public lands in four counties is emphasizing that their proposal will have little impact on mountain biking in the Roaring Fork Valley. The Hidden Gems proposal would expand existing wilderness areas and create new wilderness areas primarily in Pitkin, Eagle, Summit and Gunnison counties.
With a few exceptions spelled out in federal law, wilderness designation bars all forms of mechanized travel, including mountain bikes. Horseback riding, grazing, hunting, fishing, hiking and mountaineering are all permitted in wilderness areas.
The Roaring Fork Mountain Bike Association is opposed to the proposal on the grounds it would close six trails and take away areas that could be developed for mountain biking in the future.
Wilderness Workshop has removed more than 35,000 acres of proposed wilderness in Pitkin County to preserve 18 different mountain bike routes totaling 74 miles.

Beetle legislation headed to Congress
Colorado Sen. Mark Udall is pushing for quick passage of a bill that would allow treatment of millions of sick trees in Colorado and throughout the West. The bill would designate “Insect and Disease Emergency Areas” on national forest land, and secure non-monetary assistance to local governments and private landowners to log and treat tree stands that have been hit or are threatened by the beetles. The bill authorizes no money to assist with the efforts.