Aspen narrows down list of potential developers
November 21, 2009
ASPEN – The city of Aspen has narrowed the candidate field to three private developers who want to build affordable housing on two publicly-owned properties – one on Main Street and the other at the base of Smuggler Mountain.
The City Council agreed this week to move forward with three proposals to build dozens of one-bedroom rental units at each site, located at 802 W. Main St. and 517 Park Circle.
The three finalists – the LIFE Foundation Team, Theodore Guy Associates and Coburn Development – are based either locally or in the region.
“All proposed the least amount of risk to the city in terms of further financial exposure,” wrote assistant city manager Barry Crook in a memo to council.
The council directed city officials on Monday to issue request for proposals (RFPs) to the three companies so they can provide further details on their plans and move toward a possible agreement.
The council also approved city officials to hire a financial consultant to advise them on details of the proposals before selecting a partner. Each of the finalists will make a presentation to the council early next year before a selection is made, according to Crook.
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Earlier this year, the city put out a request for qualifications (RFQs) to attract developers who are interested in partnering with the government to build affordable housing at the private sector’s expense.
Stipulations were that the focus of any development be one-bedroom units and that they be open in a lottery system to anyone who qualifies under the Aspen/Pitkin County Affordable Housing (APCHA) guidelines.
The city also is requiring that in the end, the city maintain ownership of the land and no affordable housing mitigation credits be given to developers.
About 12 proposals were initially considered by a committee of eight city and county employees, and one member of the APCHA board. Crook estimated that about 200 staff hours were dedicated to the effort.
Proposals ranged from 25 to 44 units and some included free-market components, and some were for-sale development and others for-rent only. They included debt and equity financing, and some required financial commitment by the city beyond the land.
“The evaluation committee agrees unanimously that of the five semi-finalists teams, the three in that semi-finalist groups that were proposing for-rent concepts had what seemed to be the most beneficial and most viable financial plans,” Crook wrote in his memo.
The city won’t release the proposals because there is proprietary information contained in them and knowledge of it could put bidders at a competitive advantage or disadvantage.
Given the current economic environment and the projected revenues for the city housing fund, officials recognize the challenges in funding new affordable housing. Exploring public-private partnerships is one option to build private capital and develop more units faster – rather than waiting for public dollars to accumulate and build housing several years from now.
The city turned to the private sector for help because over the past two years it has depleted its housing fund by buying several pieces of property totaling more than $30 million. As a result, there is no money left to actually build affordable housing.
Two of those acquisitions were for the Main Street and Park Circle properties. The Main Street property is a 9,000-square-foot parcel that was purchased for $3.7 million, and the Park Circle land is a 14,458-square-foot property that cost $4.15 million.