'What's happening to my small, quirky town?'

About 25 years ago, the first developers to eye a big housing project in Basalt threw a weekend carnival to draw attention to a model home in their fledgling Basalt South subdivision.

Something clicked, although it was probably the affordable housing prices rather than the Ferris wheel and pony rides. Basalt South became the wildly popular Elk Run subdivision that initially provided a great alternative for working families who were priced out of Aspen's inflated housing market.

Today, developers and property owners in the chic Basalt market don't need carnivals to sell homes. The supply is so scarce and the demand so great that housing, particularly single-family homes, gets snatched almost as soon as it hits the market.

In the Willits subdivision, one of Basalt's newest, home prices started topping $1 million in January. The previous high sale in Willits was $770,000.

On Riverside Drive, along the Fryingpan River, homeowners that typically invested around $125,000 in their lot and single-family home 20 years ago are now watching values push $2 million.

There were 33 sales of single-family homes in and around Basalt for more than $1 million last year, according to statistics tracked by the Aspen-Glenwood Springs Board of Realtors. Those kinds of sales are changing the complexion of who is buying.

"We are going through this socioeconomic shift," said Glenn Rappaport, an architect and member of the Basalt Town Council.

As outside developers and well-heeled home buyers take increasing interest in Basalt, so are current residents beginning to resist the pace of change. The election of a new slow-growth majority to the Basalt Town Council signals a new and possibly contentious period in the once-quiet midvalley.

Big money comes to town

Real estate investment groups have been interested in Basalt since at least the time the Elk Run developers held their carnival in the early 1980s. But for the most part, they have been developers from Aspen who saw opportunity for a large-scale project in Basalt. Aspen real estate brokers Dale and Sally Potvin developed the South Side subdivision in the late 1990s; architect Michael Lipkin wrestled with Eagle County and Basalt officials for years before securing approvals in several phases for the commercial-residential Willits project earlier this decade.

The market changed about 18 months ago, Rappaport said. Even small real estate opportunities in Basalt are now potentially lucrative enough to lure investors.

A case in point is the Green Drake Inn. The well-worn, 25-room hotel on Basalt's main drag sold for $4.4 million last month to an investment group headed by Aspen architect Charles Cunniffe. His group paid $2,875,000 more than what the previous owner paid for the hotel 3 1/2 years ago.

2006 was also the year big, out-of-town development firms invested in the midvalley. Pat Smith's WestPac Investments LLC teamed with New York-based Related Companies to pay $18.5 million for the aborted Bair Chase golf development on a 280-acre ranch between Carbondale and Glenwood Springs. They are the same team that bought the Base Village project at Snowmass Ski Area from Intrawest Corp.

Elsewhere in the midvalley, Joseph Freed and Associates LLC of Chicago paid $20 million to buy into Lipkin's Willits Town Center project, a 10-block core that will feature 250,000 square feet of commercial development mixed with 400 lofts and condominiums.

Another Chicago-based firm, a subsidiary of Lane Industries, is reworking a development plan for the Tavaci development, across Highway 82 from Willits.

Reviews stack up at Town Hall

With the hot market, it should come as little surprise that development proposals are stacked up for review at Basalt Town Hall like skiers at Aspen Mountain's Silver Queen Gondola on a powder morning.

Every open piece of ground within Basalt's urban growth boundary - an area deemed appropriate for development in the town's master plan - seems to have a development proposal connected to it.

Four projects seeking approval for 250 residences and 230,000 square feet of commercial development are under review (see chart).

Basalt Town Councilman Chris Seldin labeled the growth pressures facing the town "tremendous."

Seldin was elected to office in April 2006 along with Gary Tennenbaum and Amy Capron. All three candidates campaigned on a slow-growth platform. When elected, they became part of a new council majority that was prepared to vote against two development proposals - the Roaring Fork Club expansion and Sopris Chase - because they didn't comply with the master plan.

The Roaring Fork Club wants to expand onto the Meyer family ranch, just east of Elk Run subdivision.

The Sopris Chase developers want to build 115 residences just downvalley from Basalt High School. The project included 55 affordable units with deed restrictions to ensure they remain affordable.

Both projects were outside the town's urban-growth boundary. The council majority said in both cases they couldn't approve a project outside the area that Basalt citizens had deemed appropriate for growth.

Seeing that they would be on the losing end of any council vote, both developers pulled their applications before official action was taken.

The council's actions have triggered a healthy dose of debate in Basalt about the best approach to growth.

Growth-control debate

Critics of the slow-growth council contend its actions limit supply and drive up prices of housing and other property. "With the no-growth attitude of some of the deep thinkers in Basalt, there is more value today than there was before," real estate agent Wendy Lucas said recently. "When you restrict building prospects, values are going to go up."

Seldin called it a "fantasy" that restrictions have had a huge impact on Basalt's prices. As the Vail and Eagle County market show, prices still soar even when there are fewer restrictions, he said.

Seldin said the challenge for Basalt is to keep housing affordable without sacrificing qualities that make the town attractive for so many residents, like rural buffer zones and open space. In other words, Seldin isn't willing to allow sprawl to try to keep housing affordable. Besides, he said, there is no guarantee developers will build affordable housing if the council simply approves a lot of projects.

"To me, raw supply is not the solution to that demand," he said. "You could have sprawl up and down the valley and still have home prices over $1 million."

Seldin said he is taking actions as a representative of Basalt that he believes the majority of residents support. A 2005 survey of community residents showed that preservation of small-town character and preservation of a rural buffer were the top issues facing Basalt. In another question, 39 percent of respondents said they wanted less development than they currently had and 34 percent said they wanted about the same amount.

He also pledged in the council campaign last year to adhere to the land-use master plan - specifically provisions like the urban-growth boundary.

Former Mayor Rick Stevens questions if Seldin and some of his colleagues really have a mandate. The turnout in the 2006 election was the lowest in Basalt since 1994, he noted.

The growth foes "pushed their agenda through and the rest of us were sleeping," said Stevens, who was mayor from 1994 to 2004. He left office because of term limits.

The curse of the newcomers

As Basalt has grown, there have always been contingents who wanted to freeze the town at that particular moment, with the size and feel they were comfortable, Stevens said.

"'What's happening to my small, quirky town?' I've been hearing that since I moved here," Stevens said.

Usually, he said, it is recent arrivals who want to keep the town the way they found it. Longtime residents are more accepting of change, since they have experienced so much of it. Often the newcomers who want to keep things the same are oblivious to the fact that their very arrival helped change Basalt, altering the town for people who lived there before they did, he said.

Stevens believes Basalt can and should accommodate more growth. Like it or not, it is a popular place among people who are being attracted to the Roaring Fork Valley, such as retiring baby boomers with high disposable incomes and young professionals who can buy a free-market house immediately and not scrounge for whatever affordable housing they can find, he said.

If Basalt doesn't accommodate more of the people who want to live there, it will just promote sprawl and growth pressures further downvalley, Steven said.

He feels growth restriction poses as great a threat to Basalt's small-town character as growing too much. If Basalt evolves into a high-end resort, its small-town character will deteriorate, he said.

Master plan battleground?

Basalt residents who have the patience to participate in public meetings will get a chance this year to help shape the town's direction. The town government is working on an update of its 1999 master plan. That will help determine if the sites of Sopris Chase and the Roaring Fork Club expansion should be within the urban-growth boundary.

Public meetings on the urban-growth boundary and a variety of other topics will be held at times not yet scheduled.

Jim Paussa, a civic activist and sometimes agitator, said he fears the master plan meetings will only pit growth foes and supporters of various projects, like the Roaring Fork Club expansion, against one another.

"It's playing the game of who can stock the meeting," he said.

Paussa said the town government isn't doing enough to engage citizens and get them involved in the process. Without large-scale participation from a representative cross section of residents, the master plan process and the resulting document will be flawed, according to Paussa.

He believes Basalt politics is like a pendulum right now. Growth foes rallied to get their candidates into office in the last election. Growth supporters will now rally their troops. What is needed is regular participation from citizens who guide the direction of the town government.

Rappaport agreed the master plan meetings might play opposing factions against one another. Developers and landowners might also show up asking if they are in or out of the urban-growth boundary and demand to know the reasoning.

"We've created a little bit of a monster," Rappaport said.

So he wants the town to take politics out of the urban-growth boundary debate and use factors like topography, availability of essential services like water and streets to determine where Basalt should grow.

Rappaport wants to come up with a plan that describes how Basalt should grow and what amount of growth the infrastructure can ultimately handle, then approve proposals that conform with that vision. In general, he prefers a compact town that has a limited ecological footprint. He subscribes to the vision of the Roaring Fork Valley towns as a string of pearls separated by open space.

Valleywide growth quotas?

Jacque Whitsitt, a growth-control advocate and former Basalt councilwoman, wants to set definite quotas on growth, not only in Basalt but valleywide. She said a regional master plan is needed so that governments can see and consider the cumulative effects of their growth approvals.

"Everybody is allowed to approve their own plans - polluting the air and congesting the highway," Whitsitt said.

She wants to see the Roaring Fork Valley's "carrying capacity" determined, so decision-makers would know how many people could be accommodated without sacrificing the quality of life. In Whitsitt's scenario, development approvals would have to be coordinated between valley governments.

That level of cooperation seems unlikely, given the differences of opinion between jurisdictions. Right or wrong, governments make most decisions based on what's best for the people within their borders, despite the potential impacts on their neighbors.

The city of Aspen, for example, is considering stricter growth controls. If those are approved, Stevens said, Basalt will face greater growth pressure.

Two different approaches

Stevens believes the town is unnecessarily arguing over the urban-growth boundary. Natural and political realities will limit the size of the town, he said, even if the Roaring Fork Club and Sopris Chase sites are allowed into town.

Basalt cannot grow up the Fryingpan Valley, and growth is limited upvalley toward Aspen, Stevens said. The Grange family placed a conservation easement on their ranch downvalley from Big O Tires, and Reno Cerise, another rancher adjacent to the south side of town, shows no inclination to sell to a developer, according to Stevens. Further downvalley, the Emma Caucus will limit growth through its political clout.

In the El Jebel area, the Tavaci project was rejected last fall by the Roaring Fork Regional Planning Commission, an arm of Eagle County government. The developer is working on a revised plan. The original proposal featured 245 residences and 94,000 square feet of commercial space.

Stevens said he would like to see the urban-growth boundary include more land on Basalt's fringe, so that it can handle more of the demand. The town can work with developers as a partner to provide affordable housing, he said.

Accommodating greater densities within the existing town and not expanding the urban-growth boundary sounds good in theory, according to Stevens. But he doesn't see how the small town's street system will handle greater densities for efficient traffic circulation. "It will be like being in Times Square," he said.

Seldin, who has emerged as a leader on the council, sees Basalt's challenges differently. He and the new council majority have said they will support higher densities in town to combat sprawl.

Seldin also disagrees that the free market can be relied on to dent the affordable housing shortage. Basalt is reviewing at least four applications from property owners who want their land annexed to town. Annexation allows them to increase the density of their projects above what Pitkin County would allow.

In return for that density bonus, Seldin wants the developers to provide community benefits, including affordable housing. The key is getting something for the community while allowing the project to remain economically feasible.

"We have the tools we need," said Seldin. "We just have to make sure the political will exists."

<i>Scott Condon's e-mail address is scondon@aspentimes.com</i>