Aspen couple under investigation for violating deed-restricted housing rules
Aspen-Pitkin County Housing Authority hearing officer reviewing legality of purchase of free-market home for Tricia McIntyre’s children
The question of whether a couple who owns a deed-restricted home in the Aspen-Pitkin County Housing Authority inventory violated the rule of not owning other real estate in the valley is now in the hands of a hearing officer.
Cameron and Tricia McIntyre, who own a resident-occupied home in the North 40 subdivision, also have interest in a single-family house at Park Circle that was purchased for $1.2 million by an LLC with Tricia’s name associated with it, APCHA alleges.
That violates the deed restriction attached to the North 40 property, which forbids the owners to own “any other developed residential properties in those portions of Eagle, Garfield, Gunnison or Pitkin counties which are part of the Roaring Fork Drainage,” according to a notice of violation addressed to the McIntyres on March 11.
The McIntyres, through their Aspen attorney, Michael Hoffman, appealed APCHA’s notice of violation and their case was heard in front of compliance hearing officer Mick Ireland on Thursday.
APCHA alleges that a corporation, CMTR, LLC, formed in 2017, which purchased the Park Circle property, was managed and funded in part by Tricia McIntyre.
That’s despite that the two managers of the corporation are identified as the McIntyres’ children, Laughlin McIntyre and Keenan McIntyre, who were minors at the time of the acquisition of the property by the LLC.
Tricia McIntyre and Hoffman testified on Thursday that the purpose of buying the home was for her children once they returned from college.
“If you’re not a multi-millionaire, or have a great trust fund, it’s pretty much impossible for you to come back to Aspen,” Hoffman said Thursday at the hearing. “So, the motivation was not to increase their balance sheet, the purpose was to have a place for Keenan and his brother Laughlin to return to.”
Tricia McIntyre said CMTR, LLC rents the three-bedroom, two-bathroom house to long-term tenants and collects $1,800 a month for the studio in the dwelling and $4,800 for the two-bedroom.
McIntyre told Ireland that with the current market, she could rent the two-bedroom monthly for between $15,000 and $20,000 but chooses not to.
Keenan McIntyre, who was present at the hearing and is a recent graduate of Colorado State University, said he plans on moving into the house this fall, and Laughlin will graduate this August from University of Colorado-Boulder.
Hoffman said in his April 15 letter to APCHA that the elder McIntyres initially purchased the Park Circle property with proceeds of an advance against their home equity line of credit and the debt was retired by a conventional loan, which is being serviced by rent revenue.
At Thursday’s hearing under direct questioning from Ireland, Tricia McIntyre could not specifically recall how the property was purchased, and often answered that she “doesn’t know,” “doesn’t recall,” “doesn’t understand” or “good question” when asked about financial and tax details surrounding the acquisition and ownership of the Park Circle home.
Ireland said he is skeptical of the McIntyres’ presentation.
“I’m really disturbed that nobody can remember anything … the whole thing is disturbing,” he said. “I think this was a scheme, unless shown otherwise, to circumvent the North 40 deed restriction.”
Hoffman said that’s not true and it’s up to Ireland and possibly the courts to rule against APCHA’s claim that it’s necessary to “pierce the corporate veil” of CMTR, LLC.
APCHA’s position is that CMTR, LLC acts as the alter ego of Tricia McIntyre, and that the corporate structure formally in place for the ownership and management of the Park Circle property has been used to perpetuate a wrong, namely, the violation of the North 40 deed restriction.
“If the McIntyres are simply intending to acquire the Park Circle property for future housing for the children, it’s not necessary to form the LLC for this purpose,” said Bethany Spitz, APCHA’s compliance manager. “The purpose does not explain or justify the corporate ownership of this property and the McIntyres could’ve purchased the Park Circle property in their own names and not through an LLC if that was their sole intention.”
Hoffman said it’s important to note that the Park Circle property was purchased two months after the LLC was created.
“The LLC has its own separate existence as an income and expense and the McIntyres have been very careful to manage it in a particular way,” he said at Thursday’s hearing. “There has been no mingling of funds of the LLC with those of Mr. and Mrs. McIntyre.”
Hoffman said every recitation of the prohibition against owning other real property in the Roaring Fork River watershed found in the deed restriction and the APCHA guidelines applies to owners of the deed restricted unit, not to members of their household or family.
Under those documents, Keenan and Laughlin are permitted to own real property in Aspen free of the constraints which bind their parents.
“In other words, the question of whether CMTR, LLC is the ‘alter ego’ of Mrs. McIntyre is just the first of several questions the hearing officer must consider when determining if ‘piercing the corporate veil’ is appropriate in this case,” Hoffman wrote in his letter to Ireland and Spitz. “… Piercing is not appropriate here. More immediately, however, the facts of this case do not support a finding that CMTR, LLC is Mrs. McIntyre’s ‘alter ego.’
“The LLC is governed by a written operating agreement, which identifies Laughlin McIntyre and Keenan McIntyre as the only members of the company.”
Hoffman went on to explain that in law, the concept of piercing the corporate veil is generally used to determine whether a principal of a corporation or other legal entity should be stripped of the liability protections afforded to corporations and similar entities so that the principal of the corporation is personally liable for the debts of the corporation.
“In the current matter, the APCHA seeks to deny the corporate-like existence of CMTR, LLC, and to treat it as if it were Mr. and Mrs. McIntyre, or just Mrs. McIntyre,” Hoffman’s letter states.
As a remedy in the case, APCHA seeks that one of the properties, either at 0005 Riverdown Drive, which has an assessed value of $1.7 million, or 409 Park Circle, with an assessed value at $1.5 million, be sold.
Ireland asked both sides to weigh in in writing regarding the remedy and any outstanding issues that were not answered or addressed in the hearing.
“I am not going to apply any consequences today because I want everybody to have a chance to argue in writing with me why they think the property should or should not be sold,” Ireland said. “But this can’t go on with on-paper ownership interest that suggests that the owners of lot 72 in the North 40 contains some sort of interest (in the Park Circle property) or did have some interest.”
Tim Andrulaitis, a neighbor of the McIntyre Park Circle property who attended Thursday’s hearing, warned Ireland of the consequences his decision could have.
“If this is the precedence that APCHA wants to set, sign me up and I’ll buy a North 40 home, I’ll put all my property in my kid’s name and keep dealing with making money off of a free-market property,” he said.
On Monday night, the City Council listened to ideas for each old building. However, nothing laid out what the community space would actually entail — only aspirations and gathered community comment.