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Opposition mounts to Basalt’s sharing of sales tax revenues with developer

Scott Condon
The Aspen Times
Scott Picard is a big promoter of Willits Town Center as owner of Sure Thing restaurant. However, he opposes the developer's request to share sales tax revenues to undertake more development.
Aspen Times file photo

Basalt’s proposal to share sales tax revenue to help the developer of Willits Town Center finish the project has struck a nerve with some observers, including one of Willits’ biggest boosters and two former council members.

Scott Picard, owner of Sure Thing restaurant and a self-professed proponent of growth, said he is opposed to public funds fueling a private developer. Mariner Real Estate Management, the owner and developer of the shopping center, says it needs public funds to finish the project.

Picard equated that to a corporate bailout. Every business operator runs into tough times, but small-business owners don’t get a helping hand from taxpayers, he said.



“When you read about them wanting to share revenues, you have to say, ‘Wait a second. What is the culture at Mariner?’” Picard said.

Mariner, a Kansas City, Missouri-based company, acquired the stalled Willits Town Center project in a foreclosure sale during the recession and got the project on track. Its critical first step was completing the Whole Foods building, which created an anchor tenant. It completed two other buildings, including the one where Sure Thing is located, and is a partner in the recently completed Element by Westin hotel. A 50-unit affordable-housing complex, with retail space on the ground floor, is currently under construction.




Mariner has approvals for about 500,000 square feet of space for retail, restaurants, residences and offices. Slightly more than half is constructed. The vacancy rate in the commercial space remains high.

The company says it is facing a $12 million shortfall between what it will cost to develop its remaining commercial space at Willits Town Center and what it will reap in rents. A financial consultant for the town estimated the gap closer to $10 million.

To close the gap, Mariner is asking the Basalt Town Council to approve an additional 91,000 square feet of retail and residential space. It also wants to split sales tax revenue that exceeds the 2015 level. The third leg of its plan is to assess a 1.5 percent public improvement fee on business in the shopping center. That fee is essentially a localized tax, which will raise revenue for public infrastructure for the project.

Mariner President Ryan Anderson told The Aspen Times in an interview last month that Willits Town Center needs the public funding so it can reduce rents to a level that will attract additional tenants and still allow it to make a return on its investment.

The council voted 4-2 on Dec. 8 to approve the first of two readings required on an ordinance. The second reading goes before the council Tuesday at Town Hall.

Picard said he questions how hard Mariner is trying to lease its vacant space. He said he initiated discussions to lease 3,500 square feet in the affordable-housing building that is under construction. He wants to start a second restaurant, this one focused on breakfast and lunch. While Mariner considers the targeted space one of the least desirable in the development, Picard said he is confident that he could create a destination-type eatery. He said he hasn’t heard back from Mariner after the initial discussions.

Tim Belinski, a local representative of Mariner and president of Independence Ventures, a real estate management and consulting firm, said he wouldn’t discuss any discussions with businesses about leases. He said Mariner has a committee that explores the best fit for its vacant spaces.

Belinski noted that owners of other businesses at Willits Town Center support Mariner’s proposal, and he produced emails from two business owner-operators that talk about the need to produce more vibrancy at the shopping center. A third retailer at Willits, Joel Mischke of Basalt Bike and Ski, expressed support for Mariner’s plan at the Dec. 8 Basalt Town Council meeting.

Belinski said Mariner’s proposal will help Willits Town Center achieve the vision that was imagined.

“Willits hasn’t stalled out, but we need a jump-start,” he said. “It’s good for the development to be healthy. That’s a benefit to everybody around it.”

Mariner didn’t envision asking to share town sales tax revenue generated at Willits Town Center or the implementation of a public-improvement fee, he said, but those emerged as ways of addressing a problem.

“It’s like going to the dentist,” Belinksi said. “Nobody wants to go to the dentist.”

The tax-sharing proposal has little risk to Basalt, Mariner maintains. Under the plan, Basalt would collect all sales tax revenue generated by the first $45 million of sales in 2016 (which matches the sales level of 2015). Sales tax collected on any greater amount would be split between the town and Mariner.

The revenue would be shared for 15 years or until Mariner collects $5 million, whichever comes first.

Basalt resident Pam Weber was among those who wrote a letter urging the Town Council to turn down Mariner’s request.

“This is a rare occasion when fiscal conservatism meets liberal values: Don’t foolishly give tax dollars away and support the ‘too big to fail’ against the smaller landowners/merchants in town,” Weber wrote.

Sharing the sales tax revenue would help spur further development of the project and, in theory, produce more sales, according to Belinski.

“It’s going to produce new sales taxes,” he said.

Two former council members are among nine people who have written or co-written letters of opposition to Mariner’s proposal and submitted them to the town. Former elected officials Katie Schwoerer and Chris Lane wrote that sharing sales tax and approving the public-improvement fee “are complete sell-outs of Basalt and its citizens.” Their commentary appears in today’s Aspen Times on page A11.

They said the development will generate too much traffic, won’t add enough affordable housing compared with the employees it generates and takes tax funds out of Basalt’s pockets. They urged the council to reverse direction and reject the application.

In the first vote, Councilmen Bernie Grauer, Rick Stevens, Rob Leavitt and Herschel Ross supported the proposal. Mayor Jacque Whitsitt and Councilman Gary Tennenbaum were opposed. Councilman Mark Kittle wasn’t at the meeting.

scondon@aspentimes.com