Aspen resident pushes for ordinance to hold deadbeat businesses accountable
December 25, 2016
It took Ward Hauenstein months to collect the $7,000 owed to him by an Aspen restaurant for his computer work, but only after he sued it in small-claims court this year. The Aspen resident said it shouldn't be that way, and he is urging city officials to create an ordinance that keeps start-up businesses honest when it comes to paying their bills on time.
Count artist Gaard Moses among those who supports Hauenstein's idea. Moses said the defunct Nello Alpine Aspen still owes him money. After interest, the outstanding sum now stands at $11,000 for parts and labor, he said. The Old Snowmass resident in April filed a mechanic's lien for $9,804 against New York-based Ashkenazy Aspen Realty, which leased the space at the Little Nell complex to Manhattan restaurateur Nello Balan, who opened Nello in December 2015 and closed it in June.
"In my 50 years of doing business in Aspen, this guy took me for four or five times as much as what anybody had over the culmination," Moses said, noting that "you pretty much have to get a lawyer to file a mechanic's lien."
Among Moses' expenses were $5,000 on golden leafs he used for the artwork that consisted of seven or eight signs for the upscale restaurant.
"It came directly out of my pocket," he said. "And they didn't even buy me a f—ing beer. No gratuity at all."
Balan's debtors can't seem to track him down, and their mechanic's liens against his restaurant or the landlord — more than $300,000 are on file in the Pitkin County Clerk and Recorder's Office, including one for $240,836 by Regan Construction — haven't done any good, either. Records show the liens remain on file and none of them have been "released," meaning they haven't been paid off.
Recommended Stories For You
Be My Guest Aspen is the corporate name for Nello. Unsatisfied judgments against it stand at $21,922 in favor of vendor Old World Wine and $21,548 for Steve Stunda in Pitkin County District Court, and $29,476 for Southern Wine and Spirits of Colorado in Adams County District Court.
Hauestein said such businesses as Nello Alpine Aspen and Aspen Kitchen must be held accountable when it comes to paying off the workers who help get them started — from Moses creating signs for Aspen Nello to electrician Doug Lassiter, whose company is owed more than $113,000 by the bankrupt Aspen Kitchen, which reopened Dec. 15, for his work.
"There needs to be an ordinance that you can't have a business license in town if you're not paying your bills," said Hauenstein, who said his case against Nello didn't go to trial after it paid him. But he said his hopes for collecting a court judgment for legal fees, just less than $200, are dim after Nello bounced a check to him. "There would be simple rules. If you (the creditor) win a small-claims case, that would be grounds for suspension of (the debtor's) business license."
Under Hauenstein's proposal, the creditor would have 30 days to pay off a small-claims court judgment or the city would suspend its business license. He said it would play out similarly for larger court cases where the monetary claims are higher — county and district courts — and possibly liens, as well.
City Attorney Jim True said such an ordinance could be complicated by legal nuances, but he added Hauenstein's idea isn't far-fetched, either.
"Ward is on the right track," he said. "And I've been looking at ways we could get there."
Both True and Mayor Steve Skadron, whom Hauenstein also has contacted about the idea, said the moratorium on commercial land-use applications has consumed much of their time of late. The moratorium is scheduled to expire Feb. 28, provided the city revises its land-use code by then.
"It is something we could bring to council," True said, noting it could be one of City Council's top 10 goals for 2017. Council members annually outline the top 10 priorities they plan to address in the coming year.
Billing disputes also can complicate matters, True said. In simple terms, a developer will hire a general contractor, who in turn hires subcontractors for specialty jobs. The developer will pay the general contractor, who then pays the subcontractors. But it's not always that tidy of a deal.
"That's part of the problem," True said. "If a general contractor comes in and does the work and bills the developer $50,000 but (the developer) agreed previously to pay $25,000, then you have a $25,000 dispute. It may or not be legitimate, but we can't adjudicate the nature of the dispute."
Not all workers are subcontracted and they directly invoice the developer, which was the case with Hauenstein and Moses.
While Hauenstein is pushing for a law to hold businesses accountable, the city has used other means to crack down on debt-saddled concerns.
There was the case of Scott DeGraff, who moved from Las Vegas to Aspen and opened restaurants and bars in Aspen and Snowmass. He racked up millions of dollars in debts related to construction work and other services, while his company later declared Chapter 11 bankruptcy. The city in turn refused to issue him a liquor license for a downtown Aspen restaurant. He had to transfer the license application to his wife in order to get it approved in September 2010.
DeGraff later sued the Aspen City and the Liquor Licensing Authority, claiming they had sullied his reputation by denying his liquor license due to what they deemed his "bad moral character." The suit was never resolved; in November 2011, DeGraff took his life.
Meanwhile, Moses said the city needs to keep businesses honest, just like they do everybody else.
"The city comes after you and wants all the T's crossed and the I's dotted and want their fees up front, but they don't give a s— about you getting paid," he said. "They want to get paid and they have the muscle to get paid, but all of these contractors? Even the big guys can't get paid."