ASPEN — Keith Goode, owner of Parallel 15, a new coffee shop on Aspen's Hyman Avenue, was ordered by the city this week to shut down his business because he was operating a restaurant, not a retail store.

Goode’s days were numbered since he did not have a building permit to paint the walls, because of a city law passed nearly two years ago.

“The building department hated doing this; they thought it was so dumb,” Goode said Tuesday.

They said as much, perhaps not as bluntly, to the Aspen City Council on Monday. City Community Development Director Chris Bendon recommended the council lift the moratorium, which had been in place for two years and had effectively handcuffed small-business owners from doing simple remodels or expansions.

Changing an existing use of a commercial property was banned by the moratorium, which prohibited issuing building permits on any new construction downtown.

“I couldn’t do it with a straight face,” Bendon told the council about how he explained why Goode couldn’t set up a coffee shop. “It’s tougher and tougher for my staff to explain why there is a moratorium.”

The council voted 4-1 in favor of lifting the ban, with City Councilman Jack Johnson casting the sole vote against the move.

“If they hadn’t lifted that moratorium, I would be in a tight spot,” Goode said. “I would have had to stop selling coffee and start selling socks.”

The council’s action brought a sense of relief to a representative at Loro Piana, a retail store on Galena Street. The shop’s owners wanted to expand into an adjacent space that recently was vacated by Cream, a women’s clothing store. But they couldn’t because a part of the moratorium banned redevelopment in downtown commercial space.

Loro Piana’s expansion was more than a minor improvement and couldn’t be granted an exemption from the moratorium, according to Bendon.

In another case, Ambient Technologies, a high-end lighting store, wants to take over the space where Imelda’s shoe store was on Mill Street. But the change in use wouldn’t allow the store’s owners to alter the interior of the space, including installing, ironically, lighting fixtures.

The moratorium was first adopted on an emergency basis on Dec. 12, 2006, and was intended to protect locally serving businesses. But it appears that it was hurting those shops more than it was fostering them.

“This is one of those once-in-a-lifetime opportunities to gain back some of the types of businesses that have been lost,” City Councilman Steve Skadron said, adding he doesn’t want to support a policy or regulations that hinder local business owners from setting up shop.

Goode said his space was originally built as a deli. Later incarnations were a Haagen Dazs ice cream shop and most recently, a store selling handmade artisan soaps.

“I wasn’t trying to sneak anything past anyone,” Goode said. “I took over retail space that was food and beverage in the past.”

Bendon admitted that the moratorium has done little in furthering the concept of city government regulating downtown businesses in an attempt to save mom-and-pop shops. And trying to justify that to people like Goode was getting more difficult.

“It’s getting weird,” Bendon said last week. “Regulation is not a tool of creation, it’s a limitation.

“There is no bright, gleaming public purpose at this point.”

The moratorium was established to limit redevelopment while Bendon’s staff and the council explored the need to preserve historic interiors and potential regulatory tools regarding the mix of commercial uses in the downtown core. The moratorium has been extended every six months to continue discussions on how to regulate downtown businesses.

But the work of city officials hasn’t really gone anywhere, especially since it is a complex issue with far-reaching implications. Officials also can’t put a definition on what specifically a “locally serving business” is.

City staff has done research on other cities throughout the United States, showing communities have gone so far as to ban high-end luxury stores, or create a cap on businesses that offer particular items such as jewelry.

So instead of focusing on disincentives through regulations, the city will likely take a proactive approach by working with longtime business owners and offering them incentives to keep their stores open through public-private partnerships.

“In this scenario, staff does not consider the current moratorium valuable,” Bendon wrote in a memo to the council. “... Stores are opening and foregoing the necessary physical improvements to properly accommodate the new use. As the moratorium does not affect issuance of business licenses, these stores are able to proceed albeit in a potentially awkward or compromised manner.”

But that’s not to say that protecting affordable places to shop and eat isn’t a community concern — it has been since at least the early 1990s when it was identified in the Aspen Area Community Plan as an important issue that should be addressed.

And that was Johnson’s reasoning for wanting to keep the moratorium in place.

“Citizens of this town have been dissatisfied on how their town has been going since 1993, and it’s not good,” he said. “The government’s job is to reflect the will of the people.”

csack@aspentimes.com