Aspen City Council opts for more housing, fewer incentives for lodge developers

Lodge unit and density incentive that reduces affordable housing mitigation to be taken out of city of Aspen’s land use code

Aspen’s elected officials decided Monday to do away with a lodge incentive in the land-use code that allows developers to provide fewer affordable-housing units if their project utilizes land efficiently and provides rooms under 600 square feet.

The lodge unit density and size incentive currently allows required mitigation to be reduced from 65% to low as 10% in some circumstances.

It was added to the code in 2007 when Aspen City Council was attempting to address the loss of lodge rooms and encouraging more lodging development, since many of Aspen’s post-war era ski lodges had been redeveloped into more expensive accommodations, second homes, or affordable housing.

But an unintended consequence of the incentive was realized leading up to the controversial Lift One project that Aspen voters narrowly approved in 2019.

Developers of Lift One Lodge and Gorsuch Haus, both large lodging properties at the base of Aspen Mountain’s west side, were able to take full advantage of the incentive that significantly reduced their employee housing mitigation.

For Lift One Lodge, a 107,000-square-foot hotel, timeshare lodge and private residences, the mitigation dropped from 65% to 30%, which included other incentives beyond the lodge size and density reduction.

The developers behind the Gorsuch Haus, an 81-room hotel, have to provide 26 units using the incentive instead of the required 55.

While both projects were fully code-compliant, some council members at the time they voted to send the land-use applications to voters said they didn’t like the incentive because the properties will generate more employees than they will house.

Current council members concur.

“I think we have, especially how this was employed over Lift One, are shorting the community on housing in a major way,” Councilwoman Rachel Richards said Monday during a work session.

She added that the resort community and city officials did not expect such rapid growth in the short-term rental industry, and thus filling in the lodging deficit.

“It’s amazing sometimes how quickly things change around you and to see the short-term rental impact, I think it has more than made up our lodging base that we’ve lost,” Richards said.

City staff recommended eliminating the incentive because it has not translated into the lodge outcomes that were desired, according to Ben Anderson, principal long-range planner for the city.

Often, projects are designed within the code language to meet the letter of the regulation, but not necessarily the intent, he added.

“Even if the desired outcomes were fully realized, it seems that community and council desires for affordable housing is now of a higher priority than the type of lodge product that is being produced,” Anderson wrote in a memo to council.

Councilman Skippy Mesirow agreed the incentive did not yield the result others had in mind at the time, particularly small, affordable lodge rooms.

“Gorsuch Haus probably wasn’t the product that we were thinking when we thought affordable lodging,” he said.

Amending the land-use code is part of an overhaul on the affordable-housing section that council reviewed during a work session Monday.

The lodge incentive, along with other amendments to things like the amount developers have to pay in fee in lieu if they are not providing housing units, will be reviewed and voted on after four public meetings in the next month.

The Lift One project includes roughly 320,000 square feet of commercial development, including skier services, a ski museum, restaurants, lodges and a new telemix chairlift that extends 500 feet farther down the hill than the current Lift 1A.

The city allocated $4.36 million to help pay for public facing elements of the project, including a landscaped park area and improvements to Dean Street, where the loading terminal of the new lift will be located.

Gorsuch Haus in February submitted to the city the required final plats, development agreements, easement agreements, maintenance agreements and other details for the project.

Lift One Lodge has to submit the same documents by June 22, which is 180 days from when the developers entered into a five-year vesting period, meaning construction must begin before that time frame ends.

The plats and agreements are required to be recorded prior to submission of building permit applications.

Meanwhile, representatives of all the stakeholders involved in the project, which also includes the Aspen Skiing Co. and the Aspen Historical Society, continue to regularly meet to advance the project.