Aspen prevails in lawsuit over housing at Highlands
ASPEN – The city of Aspen and the local housing authority have prevailed in a lawsuit levied by a property owner at Aspen Highlands who was attempting to lift the deed restrictions on 12 dorm units and return them to the free market.
Ninth Judicial District Court Judge Gail Nichols ruled earlier this month against Ronald Myerstein, who owns 18 deed-restricted condominiums at the base of Highlands that were set aside for Aspen Skiing Co. employees during the winter and Aspen Music Festival and School students during the summer.
Through his Aspen attorney, Herb Klein, Myerstein filed the suit in the spring of 2008, arguing that the deed restrictions placed on the units were unenforceable and unconstitutional.
The legal argument was based on the Colorado Supreme Court’s decision in 2000 that invalidated the town of Telluride’s affordable-housing guidelines; the justices ruled the guidelines violated a 1981 prohibition on rent control.
But Nichols ruled that because the Aspen-Pitkin County Housing Authority has an interest in the property, the deed restrictions don’t constitute rent control as it relates to the Colorado Supreme Court’s decision.
Nichols also ruled that Myerstein knew full well when he bought the condos in 2005 from the Hines development company that there were deed restrictions placed on them, and the employee units were part of the original approval of the Aspen Highlands Base Village development, granted by Pitkin County commissioners.
“Plaintiff undoubtedly paid less for the property then (sic) it would have had there been no deed restriction agreements in place,” Nichols wrote in her June 15 ruling. “If all the rent control covenants in the deed restriction agreements are declared void, plaintiff will receive a ‘windfall’ in that he will be able to charge market rents for the various rental units.”
The Myerstein Trust bought the condominiums from Hines for $5.65 million in 2005. The trust also owns the Ute City Place apartment building at 909 E. Cooper Ave., which houses St. Regis employees. That property was purchased for $2.1 million in 2002.
Myerstein was found in violation by the housing authority in January 2008 for illegally renting the 12 dorm units at Highlands, involving 63 beds, to employees of The St. Regis Aspen Resort. The authority argued Myerstein was in breach of the original Highlands Base Village approval, which was dependent on making the seasonal units available to the music festival.
In April 2008, Myerstein filed a second lawsuit against the city and housing authority, arguing the deed-restriction controls at Ute City Place were unconstitutional and a “takings” of his property.
That case is currently being reviewed by 9th Judicial District Judge Kelly Lynch, who has been forwarded the recent ruling by Nichols, according to sources.
Whether Nichols’ ruling will have an effect on the Ute City Place lawsuit remains to be seen. It’s also unknown if Klein will appeal Nichols’ decision; he was unavailable for comment Friday.
Thomas Fenton Smith, the housing authority’s attorney, also didn’t return calls seeking comment.
Housing Director Tom McCabe said he expects the Highlands case to move on to a higher court, which might not be as familiar with the need for local housing in Aspen as are local judges.
“We’re encouraged but we expect it will be appealed, so we’re not done,” he said.
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