Centennial HOA seeks aid for $3.2 million in repairs
March 5, 2014
The Aspen City Council held a joint work session with the Pitkin County Commissioners on Tuesday, one in which they debated whether public dollars should be used to repair the Centennial affordable-housing complex, which needs about $3.24 million of work.
Though no formal agreement between the joint board and the Centennial Condominium Homeowners Association was reached Monday, initial direction was given in hopes of reaching a broader solution that can serve as a guideline for all HOAs in the community.
The Centennial HOA claims the structure deserves public aid because it contained severe defects when it was built. The defects, it contends, have resulted in a deteriorating structure and low resale values. The most desirous outcome for the HOA, according to a memorandum to the council, is for the city to assume $2.4 million of the $3.2 million cost, or 74 percent of the cost burden, with the HOA taking care of the remaining $800,000.
After all commissioners and council members spoke, Aspen’s city manager Steve Barwick tried to summarize the majority consensus for the joint board.
The majority of the elected officials agreed that no public dollars should go into the project, unless that money is reimbursed over the long run — possibly through future unit sales, Barwick said. Moving forward, the city and county will attempt to create a low-interest loan program, which might involve updated deed restrictions, appreciation limits and/or a higher price for future purchasers. The third option for a price increase would result in a third party that puts money into the project and helps the financial-equation work.
Councilman Dwayne Romero said the Centennial HOA has a point about the structure’s inherit defects, which have led to water intrusion, siding damage and drainage deficiencies. Assistant City Manager Barry Crook estimated that the building needs $2.1 million in immediate repair, while another $1.1 million will be needed in maintenance costs over the next five to 10 years.
“I think the HOA does have an argument here,” Romero said, “as to the fundamental structural defects that extend above and beyond what would normally be accepted as reasonable and prudent homeownership duties and responsibilities, care and upkeep, as well as for capital reserving.”
During a presentation, which included photos of the damage to the property, HOA treasurer John Forster said he wanted to change the perception that he represents a group asking for a government bailout. He compared his HOA and the owners it represents as “a child with birth defects.”
Commissioner George Newman and Councilman Adam Frisch were not as sympathetic as some of their other board members. Agreeing with Frisch, Newman said that how the board handles this situation will set the precedent for all future HOA requests. He said the Centennial HOA failed to put the proper amount of money into maintenance and upkeep.
“The idea that maintenance is only making things look good — I can’t accept that,” Newman said. “Maintenance, to me, in terms of holding the value of one’s property, is having to replace roofs, having to replace siding, having to replace boilers. That’s all maintenance that continues to allow that property to appreciate.”
The most daring solution came from commissioner Michael Owsley, who suggested replacing the current 92-unit structure with new buildings that would double or triple the density. So instead of one dilapidated 92-unit structure, the end product would be at least two new 92-unit buildings.
“Because that increases the value to the program,” Owsley said. “You’ve got more density. The community actually gets something from that, and I think if you just reinvest in the existing units, you’re losing money. Everybody’s losing money because, quite frankly, there’s no solution to these fundamental problems.”
While Mayor Steve Skadron joked that the homeowners should be able to stay in the Little Nell while their new 92 units are built, he said it’s necessary to exhaust all options, one being Owsley’s redevelopment idea.