Aspen’s city manager goes on the offensive
The Aspen Times
Aspen, CO Colorado
ASPEN ” City Hall’s top official is in public relations mode, attempting to explain the nearly six-fold increase in taxpayer subsidy for a controversial affordable housing project built near Buttermilk.
On Tuesday, City Manager Steve Barwick told directors of the Aspen Chamber Resort Association about the now-infamous Burlingame Ranch campaign brochure circulated to city voters in early 2005.
He was there to tell business leaders how it could have happened that the public subsidy for the affordable housing project is at least $73 million more than what was conveyed to voters when they were asked to approve building 236 units at Burlingame.
The brochure said the total cost for Burlingame would be $74.3 million, with the overall taxpayer subsidy being $14.7 million. But now city officials say the total taxpayer subsidy will be $85.5 million. Voters also were told in the brochure that the per-unit subsidy would be $62,000 but in reality, that number is $330,000.
City officials plan to ask voters this fall to approve up to $75 million to finish the development. The question will ask voters to borrow against future revenue generated by the 1 percent Real Estate Transfer Tax (RETT) and the housing portion of the 0.45 percent sales tax, both of which must be renewed.
But because the costs have increased so dramatically and voters were misled in 2005, city officials acknowledge they have an uphill battle in convincing people to go to the polls and vote “yes” on funding the next phase of Burlingame.
That’s why Barwick said he will do whatever he can to explain the mistake and provide the context around how it happened. He told ACRA members that he would visit their places of business or set up small meetings in private homes, if it will help spread the message.
“I would like to get in front of as many people as possible so that they can get a thorough explanation,” Barwick said. “We’ve heard from many people that they need a lot more information before they will vote on a bond issue so this is our effort to give it to them.”
Barwick told the ACRA board that the number used in the brochure was a figure for construction only and didn’t include other costs of the project such as land, infrastructure, and design and engineering work.
And while city officials and elected leaders have apologized for the mistake, Barwick said there’s a logical explanation of how it happened.
Barwick said he has been sifting through hundreds of pages of documents and council memos dating back several years in an attempt to establish a trail that could lead to a plausible explanation for citizens as to how they could have been misled.
And part of it centers around former Councilman Tim Semrau, who at the time convinced the City Council to change how it approached development. As a result, it changed the conversation between elected leaders and city officials that focused more on the “developer” model of building as opposed to the “design/build” model, which involves the city entering into a relationship with a team of developers to build the project together.
The intent of the developer model is for the government to provide the land, its entitlements and infrastructure, and then let the development company build the project at a fixed price.
So even though the brochure said $74.3 million was the total cost of the project, in reality it was just the amount of the bid awarded to Shaw Construction, Poss Architecture and DHM to design and build the project.
The disconnect occurred when no one in City Hall realized that voters wouldn’t understand the difference.
The $74.3 million figure in the brochure was initiated and signed off by Ed Sadler, who was the city’s asset manager at the time.
“He was making the assumption that the public was clued in,” Barwick told the ACRA board. “That was how City Council was talking about it at the time.
“[The brochure] should have never assumed that people would understand the discussion council and staff was having.”
He added that there is plenty of public documentation that indicates elected leaders knew the total cost of the project was higher. He cited a Dec. 31, 2003, memo to the City Council that said the per-unit subsidy would be $192,670.
Barwick said since the city bought the land at Burlingame in 1997, he has counted 52 public meetings that took place regarding the affordable housing development. And that’s only through April 2003, he added.
The density of the project has gone from 75 units, to 225 units, to 330 units, to the current 236 units. And to further reduce costs, 50 to 60 more units are once again being considered for phases two and three, Barwick said.
“It’s a moving target and there has been a ton of different proposals,” he said, adding there have been five councils directing the make-up of Burlingame over the past 11 years. And plenty of changes were made that drove the prices up, including making the project more environmentally friendly.
The City Council also lowered the income categories on the units, which drove down sales revenue, accounting for a loss of $6.8 million. Rising construction costs account for $5.5 million in increases, Barwick noted.
The city has hired two firms to conduct performance and financial audits of Burlingame.
“City Council knew what they were spending all along,” Barwick said. “Both audits will demonstrate that. I’m confident with that.”
Barwick also has established a committee comprised of construction experts who will deliver a recommendation on how to build the next two phases and how many more units should be there.
Warren Klug, an ACRA board member and general manager of the Aspen Square Condominiums, said he now understands the Burlingame issue more clearly.
“I though Steve’s presentation was informative,” he said. “It’s clear there was some misunderstanding on what the budget numbers were meant to portray. I look forward to hearing more from the city in the future.”
ACRA board member Rick Jones told Barwick that he had a good chance of becoming a successful defense attorney based on his presentation.
