Aspen prepares to jump on the time-share bandwagon
March 25, 2002
Aspen is prepared to embrace the resurgence of time shares in the lodging industry, but with some conditions.A host of updated regulations to deal with the trend will get their first review Tuesday by the city Planning and Zoning Commission.With various local lodge owners reportedly eyeing the advantages of converting their units to time shares or a fractional-ownership arrangement, city planners and an outside consultant began work last year to update the antiquated section of the city code devoted to such properties.Many of the old regulations in the code were aimed at consumer protection rather than land-use issues, said Joyce Ohlson, deputy director of the city’s Community Development Department.The newly drafted code provisions retain regulations on marketing and sales practices, but also address the actual operation of time shares. The proposed regulations would govern new time-share projects and the conversion of existing properties to ownership by multiple buyers who purchase blocks of time or shares in a condo-style suite.The proposed code changes make time shares a permitted use in various zone districts where short-term lodging exists in Aspen. The idea is to embrace time shares, but enact regulations to ensure they further community goals, Ohlson said.Those goals include increasing opportunities for local tourism, preserving the lodging inventory and upgrading accommodations.”When we get time shares, whether it’s a redevelopment or new project, we want it to be a hot bed – basically to keep them turning over,” she said. “We want it to look and feel like a lodge.”To that end, such projects must be managed on-site, with a front desk located in a lobby. The code will also require a bar or restaurant, conference or meeting facilities, or retail space that must be designed to serve the general public.The code will also require the units to be available for short-term rental when they are not used by owners. Walk-up visitors should be able to book a room if one is available, and rentals should not be limited to long blocks of time, like Saturday to Saturday, according to the new code provisions.The city also wants fractional-ownership units to be sold in fractions of no less than 1/10th shares.Exceptions to the regulations will require City Council approval.The new regulations will also require time-share developments to analyze the fiscal impact of the project to the city and mitigate any negative tax consequences it will cause.Time-share and fractional sales generate real estate transfer taxes for the city, but do not generate sales taxes except when they are booked as short-term lodging.The new code also encourages the upgrading and modernization of existing units if a conversion to time shares is proposed.The influx of cash through the sale of shares makes it an attractive arrangement for property owners, as it gives them the capital to make improvements, Ohlson noted.”Fractional ownership is really a way that people can get cash to reinvest in their property,” she said.The city began grappling with the fractional ownership and time-share concept when the Boomerang Lodge sought approval last year to build new units that would be sold in fractional shares. Then, developers proposed a time-share hotel to replace the old Grand Aspen Hotel.Both projects have been approved, but one significant restriction imposed on the Boomerang has been lifted in the proposed new regulations. The city had limited the fractional sale of the new units at the Boomerang so that they would be left unsold and available for short-term rental like a standard lodge unit for at least six months of the year.That six-month rule has been dropped, and owners of the Boomerang will be allowed to seek an amendment to their approval to take advantage of the new regulations, if they are adopted, Ohlson said.With the new regulations, the city hopes to foster the development of lodging accommodations that enhance Aspen as a resort without tying the hands of property owners, she said.”All in all, we think fractional ownership is a good thing for the city of Aspen,” she said.Tuesday’s presentation to the P&Z will begin at 4:30 p.m. in the Sister Cities Room in the basement of City Hall.