Aspen’s electeds move forward with new building purchase
July 2, 2018
The majority of Aspen's elected officials on Monday approved buying a building on Hopkins Avenue, which advances an alternative to the city's original plan of developing new office space by Rio Grande Park.
In a 4-to-1 vote, Aspen City Council approved a real estate contract with developer Mark Hunt, who offered to sell the city the majority of a yet-to-be-built property at 517 E. Hopkins Ave. for $23 million.
Councilman Ward Hauenstein dissented, saying the Hopkins option is "a short-term solution to a long-term problem" regarding the dearth of municipal office space.
The purchase price also includes Hunt providing turnkey office space and paying $100 a square foot in tenant improvements. Anything above that, the city would pay for.
Hunt said he wants to retain a small percentage of the building so he can own three retail spaces on the street level; the city would own the rest — 21,442 square feet.
The city has a 45-day due diligence period, in which the government can walk away with no financial ramifications. During that time, city officials will spend as much as $250,000 to crunch numbers and analyze site plans to see how the Hopkins option pencils out compared with other plans. That information will be brought back to council July 30 when it will discuss next steps in a work session.
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Already approved by ordinance is the Rio Grande/Galena Plaza project that would see 34,600 square feet of municipal office space.
It's currently estimated to cost $22.6 million, but Jack Wheeler, the city's capital asset director, said construction costs are escalating at a rate of 10 percent a year locally.
The city's project, which was supposed to break ground this past spring, is tied up in litigation. The project is on hold indefinitely as two lawsuits play out in the courts, which could take years.
Two Aspen residents, Steven Goldenberg and Marcia Goshorn, along with Snowmass Canyon resident Toni Kronberg, sued the city in May 2017.
The plaintiffs want the public to vote on the project. The city has held the position in the past that it does not want a public vote, for fear that it would get shot down.
However, Mayor Steve Skadron has come around on the public vote issue and suggested that Aspen residents get a choice on three different options for city offices, including the Hopkins building.
Hunt told council he has other offers on the space and doesn't want to wait for a November vote.
"At this point, I need to move forward, too," he said.
Hauenstein said it's undisputable that city government has grown over the years and needs more space for its employees.
He expressed his frustration that two Aspen citizens have been manipulated by Kronberg, who doesn't live within the city limits, and is acting as a puppeteer to block the city's project.
"This pending litigation is costing the city millions of dollars," Hauenstein said.
It's estimated that the government needs 54,600 square feet through 2035.
Hauenstein said going back to council's original plan of having a one-roof building of that square footage is the most efficient and least expensive route.
That option — which is now back on the table as part of Wheeler's analysis — was put on ice by a previous council because it didn't have as much public support as a slightly smaller office building, along with continuing to use the Armory, which serves as City Hall.
Currently, the city spends about $500,000 a year in rent to house various departments around town. The government also runs inefficiently because employees are scattered about the city, officials have said.
Regardless of whether the city actually closes on the Hopkins offer, government officials plan on renovating City Hall. That project is estimated to cost $15.8 million.
So with the Rio Grande/Galena Plaza plan, total office space would cost the city between $42 and $46 million based on current estimates, Wheeler said.
Because the Hopkins option is 13,200 square feet less than the Rio Grande/Galena Plaza plan, more office space would be needed elsewhere in town.
Building out other locations would cost the city between $4 million and $6 million more than the Rio Grande/Galena Plaza plan, according to Wheeler.
Aspen resident Lorenzo Semple said the city and its employees deserve better than fractured office space.
He pointed out that other public entities have moved forward and developed their projects in recent years — the Police Department, the hospital, the library, the county annex building and more, while the city has sat back patiently trying to do the right thing.
Semple continued that the lawsuits bother him because they are toxic for the community and give council little choice.
"It feels like we are being railroaded into this situation," he said. "We have to look at the long game. This feels like being backed into a corner; settling."
Councilman Adam Frisch said it's council's job to give the Hopkins option a sincere look, knowing that whatever decision is made will not please everyone.
"There is no great place in the city of Aspen to put 50,000 square feet and not cause heartache," he said.