Chicago businessman Mark Hunt continues unprecedented real estate run in Aspen
June 17, 2014
Mark Hunt and investors have purchased more than $77 million in property since 2010
1. Bidwell Building — 434 E. Cooper Ave.: $22 million
2. Aspen 1 — 204 S. Galena St.: $13.25 Million
3. Crystal Palace — 312 E. Hyman Ave.: $12.5 Million
4. Aspen Daily News Building — 517 E. Hopkins Ave.: $10 Million
5. Mill Street Mall Property — 305-307 Mill St. (spaces formerly occupied by Pacifica and Above the Salt): $5.1 million
6. Two retail units in the Paragon Building — 419 E. Hyman Ave.: $5 million
7. Seguin Building — 304 E. Hopkins Ave.: $4.25 Million
8. Reide’s City Bakery Building — 413 E. Hyman Ave.: $3.4 Million
9. Buckhorn Arms Building — 730 E. Cooper Ave.: $1.5 Million
10. Hotel Jerome — 330 E. Main St.: partial interest
With the $10 million purchase of the Aspen Daily News building last week, downtown developer Mark Hunt and investors now are linked to at least 10 Aspen commercial properties, an unprecedented run that has amassed more than $70 million in acquisitions since 2012.
On Sunday, Hunt sat down with The Aspen Times to discuss the future of these properties.
"First of all, this is my home," Hunt said. "I fell in love with Aspen, and I feel so lucky to have purchased these properties. Aspen is the perfect mix of small-town values and big-city sophistication. Everyone wants to be here."
Hunt, who also made a name for himself in Chicago in the late 2000s with his ambitious approach, has grabbed the attention of city officials in Aspen.
"It's a new phenomenon for us," said Community Development Director Chris Bendon, who joined Mayor Steve Skadron for a meeting with Hunt at City Hall a few weeks ago. "We've seen people buy a few buildings or develop several residences, but certainly in the commercial sector, this is a new experience for us."
Skadron set up the meeting to get a feel for Hunt's end game: if he has more acquisitions in mind and what he has planned for his purchases. The mayor said what concerns him is the concentration of ownership.
"It can change the fabric of community," Skadron said. "It can impact local economy by converting spaces from one type of retail to another. Say if we go from a restaurant space that employs 30 or 40 people to a high-end retail space that employs six. That concerns me."
While no specific plan was offered, Skadron said Hunt does "have some creative ideas." For one, he and Skadron discussed the possibility of new hotel rooms. They also discussed the Mill Street pedestrian mall spaces formerly occupied by Pacifica and Above the Salt. Hunt has since reached agreements with local restaurateurs for both spaces.
"I am working with the city and prospective tenants," Hunt said. "Nothing is definitive at this time. I look forward to sharing my plans when they are further along."
Skadron said the conversation was a good one, and the overall takeaway was that Hunt does not want to change the fabric of the community.
"The mayor is correct," Hunt said. "I am very sensitive to this issue, as well. I will work closely with the community to move forward in a responsible way."
Another official who shares Skadron's concern about concentrated ownership is Councilman Adam Frisch, who said Hunt's been as active as anyone ever has in Aspen.
On one hand, Frisch said it's good that Hunt wants to invest time and money into the community. It's Frisch's experience that those who take financial interest in Aspen typically want to live here, as well. Hunt is confirmation of this, as he and his family own a home here, and his children are schooled locally.
"I am very private, so my role will not be one in the spotlight," Hunt said. "Having relocated from a big city where the problems are overwhelming, I am excited to get involved in a community where you can truly make a difference."
Still, Frisch listed a number of concerns, one being that Aspen could suffer if an individual owner with a lot at stake begins to stumble financially.
According to Crain's Chicago Business, a publication that followed Hunt's activity in the Windy City, he gained fame in real estate circles by paying top dollar and making splashy plans. The newspaper states that in 2009, Hunt's plans to develop an upscale boutique hotel at the site of the Esquire Theatre on Oak Street collided with the Great Recession. Hunt staved off foreclosure on the Esquire when a neighbor of his, Don Wilson, founder and CEO of DRW Holdings LLC, agreed to invest in the property, the newspaper states.
In 2011, he and joint-venture partner Fred Latsko made history in Chicago with a property that had been in foreclosure six months earlier. IDB Group, an Israeli conglomerate, paid $117 million for a Barneys New York store on Oak Street. According to the publication's sources, IDB paid more than $1,000-a-square-foot for the six-story building, making it one of the most expensive commercial real estate purchases — on a per-square-foot basis — in the city's history.
"I can promise you I've learned a lot from the collapse in 2008," Hunt said. "I have gone to great lengths to make sure these properties are protected and have the stability to handle changes in market conditions."
While still heavily involved in Chicago, Hunt's bullish approach spilled into Aspen. In 2010, he and investors acquired their first commercial property in the area by purchasing two Mill Street spaces occupied by Pacifica and Junk Aspen for $5.1 million. The bulk of his purchases have taken place since 2012, with Hunt now linked to more than $77 million in property.
Hunt is not afraid to make unsolicited offers, as evidenced by the $4.25 million purchase of the Seguin Building, which houses Aspen Brewing Co., Aspen Over Easy and The Square Grouper. In May, commercial broker Bill Small, of Frias Properties, closed a deal between Hunt and Bill Seguin, who had owned the building for 31 years and was not actively looking to sell.
Like Skadron, Frisch would like to see a diverse downtown core consisting of retail, restaurants and bars. He said the issue is less about Hunt and more about market signals. Real estate trends show that retail pays more per square foot than restaurants.
The only building Hunt has redeveloped so far is the $13.25 million Aspen 1 Building, which sits on the lot formerly occupied by the Gap Building at East Hopkins Avenue and Galena Street. The building's ground-level retail spaces are occupied by Theory and Dolce & Gabbana, while the restaurant space sits vacant.
Bendon said the project went smoothly. There was no free-market-residential unit requested, which meant no need for council review, and it's not "overly aggressive in terms of scale and mass."
"The Gap Building was a smooth experience, all things considered," Bendon said, adding that Hunt's friendliness made him easy to work with. "If that's the approach on the remaining buildings, then we're in good shape, but the sheer volume, the number of projects, has raised some eyebrows."
"I can appreciate their concern," Hunt said. "I have a huge responsibility because of the sheer number of buildings. I expect to be held to a high standard to give people the comfort they deserve. I will work closely with the city and the community to develop a plan we can all be comfortable with and proud of."
Frisch described Hunt's approach on Galena Street as turning "retail into fancy retail," which is not a problem for the councilman, given that it is a small section of Aspen. The larger concern, he said, is when the town begins losing desired uses.
"The market signals might be: Take a fun, vibrant beer hall, a tasting room, and turn it into a retail shop," Frisch said. "The fact that these buildings get newer doesn't concern me. Use is what I'm all what about. … It would obviously be a huge detriment to the community if in 10 years Restaurant Row had two restaurants and 15 retail shops."
However, he added that the onus is on the community and its elected officials.
"If the elected officials, through community support, do their job, it shouldn't really matter who buys what when," Frisch said.
He noted that it might be worth it at some point to have a discussion with city planners to discuss trends. But in a free society, the government can only do so much. The other examples are Cuba and North Korea, he said.
"And I'm not sure how well those countries have turned out," he said. "I believe in the free market, but just to stick your head in the sand and just let the free market sort itself out is also naive."
Both Frisch and Skadron said the council needs to be "proactive" when it comes to land-use code. Skadron has had informal talks with City Attorney Jim True and planners about possible precautions.
"The free market has rights, but I have a concern for local economy," Skadron said. "I want to be prepared should there be some kind of conversion from spaces the community deems necessary for a viable downtown and a competitive resort industry."