Burlingame expansion requires key vote from homeowners
September 8, 2008
ASPEN ” It’s going to take more convincing of Burlingame Ranch residents than city officials thought to get them to agree on building more affordable housing units in their neighborhood.
That’s because until two weeks ago, city attorneys didn’t realize that it will require a unanimous vote by Burlingame homeowners to change their association’s covenants to allow a second vote in which 67 percent of them must agree to increase the density.
The unanimous vote clause was a surprise last week to a panel of residents known as the “Construction Experts Group” that has been working for months on a new development plan that includes 57 more multifamily units at Burlingame.
And it was a surprise to Aspen City Council members, who have agreed to ask voters this fall to increase the units from the voter-approved 236 to as much as 300. The construction experts group has recommended 293 units.
“That is a different set of facts than what was being represented two months ago, and clearly, we were operating from incorrect information,” said City Councilman Dwayne Romero. “No question, it would have swayed our collective thinking.”
Grand Junction attorney Richard Livingston, who was hired by Shaw Construction as part of its contract to build the first phase of Burlingame, informed city officials a few months ago that it would require a two-thirds majority vote by Burlingame homeowners to change the density. It was thought that the city owns 60 percent of the units at Burlingame, leaving only about 13 or 14 actual homeowners allowed to vote on the density issue.
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But as it turns out, 61 homeowners must agree that they want more units at Burlingame.
“That was the information that was presented, and we had no reason to think otherwise,” said City Attorney John Worcester, adding questions arose a couple of months ago by the Burlingame Homeowners Association, as well as by himself as to whether the city should have a majority stake in the vote.
There are 84 units currently built at Burlingame, with seven single-family lots sold for a total of 91 homeowners. The city of Aspen owns the other 145 units that have yet to be built and as a result, not yet sold.
Jim True, special counsel for the city of Aspen, determined two weeks ago that while Livingston wrote the unanimous vote clause, the attorney didn’t realize there is a state statute known as the Colorado Common Interest Ownership Act that allows the HOA’s covenants to be amended, which would require a 67 percent affirmative vote by Burlingame residents.
Further complicating matters, the state statute requires that while 67 percent of the unit owners approve the increase which includes the city’s ownership interest, it also stipulates that it must include 67 percent of the owners of units not owned by the city.
“There will be one vote but we have to count the ballots twice, once for the city and once for the homeowners,” Worcester said.
The latest discovery has government critics crying incompetence once again over the city’s management and development of Burlingame. The controversy swirling over Burlingame started in April after it was discovered that an information error in a 2005 city-initiated brochure that was given to voters didn’t account for tens of millions of dollars in the project’s total cost.
The number used in the brochure was the construction bid to build housing only and didn’t include other costs of the project such as land, infrastructure, and design and engineering work. City officials have said those costs should have been included and the omission was a mistake. They have since apologized.
They also hired two outside firms to conduct independent audits of the city’s financial controls and management of the project, of which phases two and three have yet to be built. Those reports recommend several changes, including the establishment of a separate development department to oversee large, multiyear capital improvement projects because the city staff can’t handle them on their own.
Some government critics argue that affordable housing should be built by a private developer.
“Any private developer would have never included a cap of 236,” said Mike Maple, a member of the construction experts group. “They would have provided a cushion of flexibility.
“Now it appears the HOA has complete control over the 236 units in the existing plan and the city’s 145 votes are irrelevant.”
Regardless of the oversight by the attorney, the City Council has expressed its desire to get input from the homeowners before moving forward with a plan for more units at Burlingame.
“Council has said all along they want support from the community and the owners there,” Worcester said, adding the state statute is designed to protect homeowners. “They have a stronger position now and the city will be in a better position to know what [homeowners] want.”
And as a result, the council will have to convince more of them than what was previously thought.
“It’s a taller hill to climb,” Romero said, adding the latest discovery doesn’t lend credibility to the city as a developer. “It does further support the notion of who should be driving this process.”
The irony in all of it is that while government critics argue the city should farm out or privatize the development of affordable housing, an outside attorney is the one who made the mistake and city attorneys discovered it.