In a recent letter to the editor, Mayor Mick Ireland said that a prior City Council's attempt to micro-manage Aspen's economy by prescribing specific development and business activity in the city's core was a failure. Ireland said the failure resulted from the city's zoning codes which, in theory, were supposed to create more residential infill, but in reality led to speculative development, cold beds and failed development projects.
To remedy the city's failed attempt at using highly prescriptive zoning laws and development fees to manage our local economy, Mayor Ireland suggests the city adopt an entirely new and different set of prescriptive zoning laws and development fees. Apparently the mayor's confidence in the government's ability to micro-manage our economic activity is unshaken. It's just that he thinks we need to try a new theory.
In defense of his new zoning strategy, the mayor cites a book by Robert Frank, titled "The High-Beta Rich," which contains several passages about how a new breed of rich gamblers, or "high-beta rich people," threaten our way of life in Aspen.
For those not familiar with this book, it's worth taking a look at it, particularly since it contains the theories that have inspired the mayor to pursue zoning laws that he believes will allow City Hall to better manage our economy.
For starters, Frank defines "high-beta" types as people whose debt-to-net worth is more than 20 percent (virtually every mortgaged home owner in America), spend an equivalent of 5 percent or more of their net worth every year (every retiree on a fixed income), whose most valuable asset is more than 20 percent of their net worth (every homeowner and small business owner in America), have more than 20 percent of their assets in "illiquid investments" (again, every homeowner and small business person in America), and often believe they are the smartest person in the room (virtually everyone at one time or another) and tend to be optimistic about their economic future. The parenthetic comments are mine, not Mr. Frank's.
Frank warns us that people who fit this profile are a clear and present danger because they are always at the front of the line when speculation starts.
Frank doesn't rely on much science or data to back up his theory but he claims to have has spoken to a few people he thinks act this way.
Frank also does not live in Aspen, but he emphatically states that it was the high-beta rich from out of town who inflicted our community with traffic problems, commercial vacancies and a lack of affordable housing.
Curiously, Frank makes little or no mention of the S-curves, the underused bus lanes, traffic patterns in tourist destinations, our incoherent parking restrictions, the impact of the national recession (especially on communities dependent on disposable income) or the fact that Aspen probably has more affordable housing units, per capita, than any city in the country.
But I digress. Back to the mayor's plan and why he is sharing it with us now.
In a recent City Council meeting, the mayor accused a local businessman and developer of being an "extortionist" and a "blackmailer." Aside from conducting himself in a manner unbecoming a mature adult, no less an elected official, the mayor also tried to redefine what it means to be a blackmailer.
Webster's defines a blackmailer as "a criminal who extorts money from someone by threatening to expose embarrassing information about them."
Under current city policies, the developer and owner of the Little Annie's and the Benton buildings, Nikos Hecht, has the right to tear down both structures and construct new, mixed-use properties. Of course, it's not as simple as pulling a permit to construct new buildings in the city, nor am I, or Mr. Hecht, arguing it should be. But Hecht has what is commonly referred to as "use by right" - that is, he can fundamentally construct what he chooses as long as he adheres to all of the local codes and development fees, which are not insubstantial.
So, when Hecht suggested he might pay fewer development and affordable fees and housing fees and reduce his parking requirements in exchange for dramatically reducing his development rights by preserving Little Annie's and the Benton building, the mayor dishonored himself and his office by falsely accusing Mr. Hecht of being a "blackmailer."
Even if you don't like Mr. Hecht, his original plan to tear down his buildings, or his proposal to reduce his city-imposed development fees and requirements, it is not an act of blackmail for a property owner to offer to pay fewer fees in exchange for giving something of real value to the city.
After seeing the mayor's letters last week, however, I developed a different theory. My theory is Hecht may have learned through secret sources that the mayor had read and believed the silly nonsense contained in Robert Frank's book and threatened to out him.
But then again, like the mayor's plan to control our economic activity through zoning laws, it's just a theory.