Aspen looks to buy BMC West property
November 21, 2007
ASPEN ” The city of Aspen is set to purchase the BMC West lumberyard for $18.25 million. Close to 100 affordable housing units are planned to be built on 4.64 acres.
The City Council is expected to approve the purchase on Nov. 26, City Manager Steve Barwick said. If approved, the real estate transaction would close Dec. 17.
“Preliminary discussions have focused on making this parcel of land a mix of long-term rental and ownership properties,” Barwick said. “These are probably not going to be single-family homes, but a higher density type of housing situation, perhaps in the ballpark of 22 units per acre.”
It’s estimated that land subsidies alone will cost the city about $235,000 per unit.
“Nowadays that’s a very good rate,” Barwick said, adding subsidies on other properties the city has purchased in the past have been much higher. “Everything else we’ve been picking up, it’s been in the neighborhood of twice that.”
The land subsidy factors in $5 million for transportation planning for a total expenditure of $23.25 million.
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That price doesn’t include future government subsidies once it’s determined what income categories will be used and what size units will be built on the property.
Barwick said he’s exploring partnerships with other public sector entities like the hospital, the school district, the Roaring Fork Transportation Authority and Pitkin County to create housing opportunities for their employees. Barwick has met with all of those entities to discuss the possibilities.
“I can’t tell you how appreciative I am of the city moving forward with this and including us,” said David Ressler, CEO of Aspen Valley Hospital. “It’s a high priority for us to house our employees, and we’re assessing our needs.”
How many units any of the organizations might commit to remains to be seen, but Dan Blankenship, CEO of RFTA, said he will bring the issue before his board of directors within the next month.
“I think it’s definitely interesting,” he said. “We all have to assess our needs and our capability of paying for it.”
The BMC West parcel, on the outskirts of town near the Aspen Airport Business Center, is located directly next to three acres that the city already owns, but hasn’t developed because there was no access. But with the BMC West acquisition, that land will finally be accessible from Highway 82. Affordable housing is expected to be built on it, as well.
The new development also will be positioned next to the recently-completed Jenny Adair housing project, which has 40 for-sale units.
Barwick said a local representative for BMC West contacted him initially, and city officials made their first offer on Oct. 15. The parcel has been under contract since Oct. 31.
“We were a desirable buyer from their standpoint because their goal was cash quickly,” Barwick said, adding the acquisition will put a dent in the affordable housing fund. “It’s going to be a cash flow challenge, but we can do it.”
Aspen’s BMC West location was one of three stores sold on the Western Slope in September to Harbert Lumber Co., a Grand Junction building supplies dealer. Rather than buy the land and building, HLC is leasing the space.
Barwick said the terms of the purchase included a one-year lease with HLC, which will pay the city $50,000 a month. That money will be funneled into the housing fund. Barwick said HLC could lease the space as long as it’s feasible.
The property is in Pitkin County and currently falls under its land-use codes. An application will eventually be submitted to Pitkin County unless the parcel is annexed into the city.
The planning and approval process will be fast-tracked as affordable housing and has higher priority than other land-use applications, Barwick said. He expects the project to be completed in three years.
“There’s a lot to be done,” he said. “The whole thing needs to be master planned for transportation.”
Barwick met with John McBride, the developer of the AABC, on Monday as part of his due diligence in the deal. The affordable housing development falls under the AABC covenants of density and design standards.
It will be up to the City Council to determine how many and what organizations will be partners in the housing project.
The revenue from those partnerships would be by the city in other affordable housing projects, Barwick said.
Ressler said AVH officials will now embark on figuring out what number of units and income categories the organization will need, and how it will pay for it.
But clearly, AVH desperately needs more affordable housing for its workforce. AVH currently houses about 12 percent of its employees, Ressler said.
“This is a high priority for us, and it’s an important property because, with the nature of our business, our employees need to be close to the hospital,” he said.
Blankenship said RFTA houses about 22 percent of its workforce, and it’s increasingly difficult to find more units because the organization is strapped financially.
“We are trying to get the biggest bang for our buck,” he said, adding other investments downvalley also are options for affordable housing. “We don’t know how big of a player we can be.”
Diana Sirko, superintendent of the Aspen School District, said the partnership possibilities are exciting.
“We think it’s an incredible opportunity, and I’m really appreciative of being included.”
Carolyn Sackariason’s e-mail address is email@example.com.