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Real estate report: Aspen divide

Conflict brews over affordable lodging


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In the late 1930s, before officially planting roots, Elizabeth Paepcke and other travelers caught a ride up Aspen Mountain in the truck bed of a mining crew.

Of the experience, Paepcke wrote in her memoir:

“At the top, we halted in frozen admiration. In all that landscape of rock, snow and ice, there was neither print of animal nor track of man. We were alone as though the world had just been created and we its first inhabitants.”

When she returned to town in 1945 with her husband – Walter, a Chicago industrial titan – the two imagined a ski town infused with culture. Today, Aspen stands as an ultra-exclusive international destination – striving to preserve the pillars of intellect, recreation, and natural beauty that define the place and attract its tourists and next-gen locals.

In an effort to promote Aspen’s visitor-based economy, a call to action to increase the town’s diversity went out to community constituents and developers years ago. But while long-awaited affordable lodging could be coming to downtown Aspen, the developer faces predictable resistance from the town’s residents and officials.

MANIFEST DESTINY

Mark Hunt, another Chicagoan, began his career and garnered attention in that city’s real estate community, thanks to his willingness to pay high prices and make aggressive plans that tended to pay off.

In 2007, Hunt set his sights on Aspen. The developer acquired the first of his commercial properties in 2010 for more than $5 million. As of 2014, he had scooped up more than 10 additional properties, worth tens of millions of dollars.

For two of the properties – one on 730 E. Cooper Street, the other on 232 E. Main Street – Hunt proposed economy ($150-$200) hotel rooms to open by 2016. He dubbed the projects Base1 and Base2 respectively.

“I was approached by some of the powers that be, based on the amount of real estate that I own, if I would consider looking into affordable lodging,” Hunt told Aspen Public Radio in early June before Base2 received City Council’s blessing. “It’s something that was high on the to-do list of the city ... something we were looking to address since 1976, almost 40 years.”

According to City Council member Adam Frisch, it’s important for Aspen to diversify its base. A 2002 Report and Recommendation of the Economic Sustainability Committee indicated that among several trends affecting Aspen, there was a noticeable “shift from [a] ski to real estate-driven business economy ... and a general shift to upper end consumers; as the more wealthy bought into Aspen, there were fewer tourists, but the total dollars spent kept climbing.”

“My number one concern about Aspen is that 1 percent of the people are paying 99 percent of the bills,” Frisch said. “We need a wider variety of people who come here, and moderate lodging can achieve that.”

Base1, approved by City Council this February, with a slight height variation for bathrooms on the roof, was followed by a 4-1 win for Base2 at the start of June. Combined, the Bases would bring 81 rooms, smaller than 200-square-feet a pop. Base2, which would replace an existing Conoco service station, will conform to height requirements at 32 feet, but the 15,000 square feet in floor area is more than double the limit. “This one corner is not zoned like its three counterparts, which would have required zero variances,” said Lorrie Winnerman, broker/owner of Lorrie B. Aspen Real Estate, and Hunt’s agent for a number of real estate purchases in Aspen. Hunt also plans to forgo housing and setback requirements, building to the edges of his lot on all sides except for the back of the building on Base2. He guaranteed he’d settle on parking agreements for 15 off-site spaces per building.

“Mark comes in and says, ‘I need some help and flexibility on parking and affordable housing,’” Frisch explained of the variance requests that accompanied Base2’s proposal.

The majority of council agreed that the community benefit of adding new affordable lodging to Aspen’s mix warranted the adjustments Hunt requested.

That’s when the conflict really heated up, according to Frisch.

 

THICKENING PLOT

Frisch explained that two guiding documents – the land-use code and the Aspen Area Community Plan – define development in town. During a town election in May, a ballot surveyed community members about variances on height, mass, parking and affordable housing. Feedback from the survey indicated Aspen locals believe their views go unheard when it comes to real estate projects in town.

To some, the final straw came in the form of the 1-year-old Aspen Art Museum, a $45 million, 33,000-square-foot, latticed structure on Hyman Avenue, which opened to mixed local reviews.

“The history of development in Aspen – the booms, the busts, and the huge up-zonings that were called ‘infill’ in the early 2000s – were not really what led to the citizen-initiated amendment of its Charter,” said Marcella Larsen, an Aspen resident, land-use and planning attorney, and former member of the Pitkin County Planning & Zoning Commission. “Rather, it was the ‘anything-goes’ process of City Hall, where developers could propose literally anything, and the development process allowed those approvals without regard to the underlying zoning.”

And so, a determined and grassroots citizen group led the charge in early Mary for the Home Rule Charter Amendment, known to some as Referendum 1, to put specific land-use variances to Aspen voters, weighted above council.

According to Larsen, Referendum 1 states that if the city approves development (limited in area to the commercial core and excluding residential units) that exceeds underlying zoning for height, mass, employee housing or parking mitigation, the approval is not final unless agreed upon by a majority of the city’s electorate.

Frisch, who said he is often associated with the pro-growth contingency in town, is “adamantly against Referendum 1,” believing it to be part of “pent up frustration in the community.”

“I think there’s a lot of people who feel like the process has let them down. After the Art Museum, there was a law suit and a settlement and the building got built anyway, and the town went crazy,” Frisch said. “So now, anytime variances are given, the community feels like it’s getting screwed. Variance is like the dirtiest word around town. My argument is, we need to change the land-use code so it produces what the community wants.”

Referendum 1 does not specifically target Base2 or affordable lodging.

But, because Base2 — variances and all — was approved before Referendum 1’s May 5th passage, the community is at odds over whether the amendment applies to development applications that were filed before the election. So petitioners scattered around town to put Hunt’s Base2 Main Street lodge to a vote. 

Aspen City Attorney’s Office has determined that land-use applications submitted before the May 5 election aren’t held to Referendum 1. However, “Even without Referendum 1, Base2 was eligible to be petitioned for a vote because the project requested a Planned Development designation,” said Sara Adams, senior city planner with the City of Aspen.

About 1,300 signatures were collected from petitioners and as of the first week of August, Aspen’s city clerk had verified the required number of petition signatures. The project will likely go to the electorate for a vote in November, said Adams. According to local news outlets, Hunt is unsure whether he’ll keep the project alive if Base2 goes to voters.

 

AFFORDING OPPORTUNITY

According to Larsen, affordable lodging is connected to more than just a place to stay.

“I’m in favor of anything affordable in Aspen – affordable lodging, affordable housing, affordable retail, etc.,” Larsen said. “The problem is that there’s no plan to effectuate anything affordable for Aspen, and we are probably far too late to change the trajectory of Aspen as anything but affordable.” She questions if the moderate pricing narrative could have a trickle effect for ski passes, restaurants, retail, etc., and also asks how the low price point can be promised.

Alternatively, Bill Tomcich, president of Stay Aspen Snowmass, pointed to the next generation of skiers, intellects, travelers and others the community would like to attract. He says he would argue that limiting affordable development forces people out of town.

“There are kids coming with the Aspen Valley Ski Club and so many examples of young people and families who, if they don’t visit off-season, mid-week, find it tough to afford a place in town,” Tomcich said. “So, not only do the market pressures force people down valley, but this also compounds traffic problems and the growing commuter issues we face.”

Former Aspen Mayor Bill Stirling said Aspen’s ongoing challenge is finding a balance – “between the town and resort – between locals’ and tourists’ needs and desires.”

“The community has paid a lot of lip service to the idea that they want to make Aspen a family-friendly place as well as attract people of unlimited means. Maybe this place doesn’t lend itself to being a perma-ski-bum anymore, but on the other hand you want kids still coming here.”

“It’s just really unfortunate when you have a developer who’s willing to invest time, money and energy in a project our elected officials and business community has been saying is what we needed for so long,” Tomcich said.

What does the Aspen of the future look like? It depends on who you ask.

“I’m not coming here to change Aspen,” Hunt said in the June radio interview. “I love Aspen. I think Aspen’s perfect. I happen to own some of the ugliest buildings in town. I think I can do better; I think we as a community can do better.”

The question remains: Will affordability fly in a town seen as synonymous with wealth?

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Gigi Sukin

Gigi Sukin is digital editor at ColoradoBiz. She can be reached at gsukin@cobizmag.com.

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