Apartments acquired for $12.6 million

ASPEN The Park Avenue Apartments, a ramshackle structure that’s been home to ski bums and local workers, has been sold for $12.63 million to a group of investors who plan to tear down the complex and replace it with both free-market and employee-housing units.Located at 404 Park Circle, the apartment complex was built in the 1960s and is one of the oldest in town. While the 14 units have been rented out on the free market, they still have been considered affordable for Aspen’s workforce. On Friday, Aspen-Pitkin County Housing Authority Executive Director Tom McCabe said the new owners have forged an alliance with the authority, with plans to build 14 free-market units and 22 affordable-housing units. McCabe said the early plans call for “low category housing” that would be comprised of two studios, 15 one-bedrooms units and five two-bedroom units.

The deal, which closed Thursday, comes after the owners of Park Avenue Apartments put the building up for sale more than three years ago. At the time, the listing price was $6.9 million. The sellers, John Werning and Basalt Riverview LTD, could not be reached Friday.It also comes after another Minnesota group of investors, Prime Point LLC, was poised to buy the apartments late last summer, only to shy away after the Aspen City Council placed a moratorium on building-permit applications. At the time, the housing authority had a similar arrangement with Prime Point as it currently has with the new owners, PFG AspenWalk, also of Minnesota. Some of the investors in both groups are the same, McCabe said.”We were in a partnership with Prime Point LLC but the moratorium queered that deal,” McCabe said. “Some of those investors went away.”The apartments are adjacent to the Smuggler Mountain Apartments, an 11-unit complex that the housing authority owns and rents out as employee housing. McCabe said preliminary plans call for tearing down both buildings and replacing them with a single structure.

“We’re hoping to do it by the spring of 2008,” McCabe said, “but with the setbacks of the moratorium, I’m not so sure.”The displaced Smuggler Mountain Apartment tenants will have right of first refusal to buy the new units, McCabe said. As of Friday, no building-permit applications had been filed with the city of Aspen, said city planner Chris Bendon. Thomas Hay, whom public documents show as a principal with AspenWalk, did not return a telephone message Friday from his Minnesota office.

McCabe, however, said the new owners will be in Aspen soon to meet with the housing authority about how to carry the project forward.McCabe said part of the deal with the new owners includes the payment of $750,000 from AspenWalk to the housing authority. That money, McCabe said, could be used to buy down the finished units to make the affordable for the displaced Smuggler Mountain Apartments tenants.Rick Carroll can be reached at rcarroll@aspentimes.com