Aspen’s Obermeyer Place a success or failure?
August 14, 2009
ASPEN – It’s been four years since Obermeyer Place opened for business and whether it’s deemed a success is the $64 million question – literally, because that’s the price of the public-private development.
Some, including Aspen’s elected officials, say the redeveloped industrial and business park on Rio Grande Place has become a gentrified wasteland without the vibrancy or vitality that was envisioned for the 2.27-acre site.
Others, including skiwear magnate Klaus Obermeyer – the main property owner who led the effort to redevelop what had been a run-down part of town – believe the project lived up to the expectations placed upon it.
What’s not debatable is that the mixed-use development is home to dozens of local businesses, some of whom wouldn’t be able to operate in Aspen if Obermeyer hadn’t created a place for small operators to practice their trades.
However, people are noticeably absent from the pedestrian-only development, demonstrating the difficulty of creating “life” with mere bricks and mortar. The project was designed by CCY Architects and modeled after the Altstadt, or “old city,” with materials patterned after some of Aspen’s most notable 19th-century buildings. But there are rarely enough people present to animate the neighborhood.
The lack of people at Obermeyer Place is a disappointment to many.
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“I don’t feel a heartbeat there,” said Aspen City Councilman Steve Skadron. “When I walk through Obermeyer Place, I’m waiting for someone to ask me to leave … like I don’t belong there.”
In 2001, when Obermeyer, who owned most of the buildings that were knocked down, partnered with the city of Aspen to redevelop the property, the over-arching goal was to create a space where service-commercial oriented businesses and residents could coexist.
In Obermeyer’s mind, that goal has been achieved.
“[The area] got so run down … it looked like hell,” Obermeyer said of the old neighborhood, adding he wanted to provide new and relatively affordable spaces for displaced small businesses to relocate. “We wanted to keep the same amount of working shops.”
The area is zoned service-commercial-industrial (SCI), which invites businesses like repair shops, dog groomers and cabinet makers, but strictly limits retail operations. One exception for the Obermeyer project was that a coffee shop and bakery was planned to be in a high-profile space with a large deck overlooking Rio Grande Park. But because of escalating costs to finish the space and delays in city-issued permits, Rene Tornere, owner of Matterhorn Bakery, bailed out.
A global trading firm now occupies the space and the deck directly outside of it sits empty, except for a solitary chair.
Obermeyer said it’s unfortunate that the bakery didn’t happen, and some vitality was lost as a result.
“We thought there would be vitality and sometimes there is,” he said. “It is what it is … c’est la vie.”
Chris Bendon, the city’s community development director, said in retrospect there should have been a requirement that a food-serving business be located in that particular space.
“The lack of food service on that corner was a disappointment,” he said, adding the perceived lack of vitality is “not a reason to say the project is a failure.”
On the contrary, said Tim Belinski, the former vice president of finance for Sport Obermeyer. “Vibrancy will not look like the Hyman Avenue Mall,” he said. “Vibrancy looks like businesses that are operating successfully in spaces that they own.”
Susan Shapiro, who lives in a deed-restricted two-bedroom, two-bath condo at Obermeyer Place, said the lack of vibrancy is fine with her because it’s a quiet neighborhood.
“It’s fabulous,” said Shapiro, who walks her dog, Nevada, every day at Rio Grande Park and can be anywhere in downtown Aspen within minutes. “It’s a dream come true.”
Obermeyer Place is home to 22 employees and their families in affordable housing units, and there are the same number of free-market condos, which served as the economic engine for the entire project. Those mutli-million dollar condos are seldom occupied because many are second homes.
A key goal of the 230,000-square-foot, $64 million project was that it provide a pedestrian connection between Rio Grande Park and Main Street. There are not many signs, but some people do walk through Obermeyer Place to get onto Main Street, near the Concept 600 building.
When the project planning kicked off in 2001, a citizen committee called a COWOP (convenience and welfare of the public) was formed. That group met 15 times over the course of a year before making a recommendation to the Aspen City Council, which approved the development in 2003.
One of the group’s stated goals was that “the project should be vibrant and create a sense of community through mixed use.” Another was that “the project should belong to Aspen and also be recognizable as a unique place or neighborhood in Aspen.”
Ruth Kruger, a commercial real estate broker and a member of the Aspen Planning and Zoning Commission at the time, served on that task force. She said the lack of vitality that exists today was not what the group had in mind when they unanimously approved Obermeyer Place.
“As a member of the COWOP, I am disappointed that is not more vital,” she said, suggesting that the city government look at making amendments to the zoning at Obermeyer Place to attract more people there.
Steve Anderson, owner of Aspen Custom Woodworking, bought his 2,230-square-foot shop for $1.2 million and moved into Obermeyer Place in 2007. Building out the space cost him a couple of hundred thousand dollars and the investment was well worth it, he said.
“I had been looking to buy real estate for years … having the opportunity to own real estate in Aspen is fantastic,” Anderson said, adding he operated at the Airport Business Center for 10 years before moving to Aspen, where nearly all of his customers are. “Who would have ever thought that this would be downtown?”
There are signs of vitality on the quiet streets of Obermeyer Place now that patients are flocking to Aspen Medical Care. The medical office moved in on June 1, having outgrown its Main Street location.
Dr. Kim Scheuer said it’s a convenient location and more functional than their previous space.
“It’s a good space to be in,” Scheuer said. “We’re happy to be there.”
Aspen Medical Care wasn’t able to purchase the space as inexpensively as Anderson did because the market has driven prices up. Scheuer said her 2,000-square-foot space was far more than Anderson’s estimated $558 per-square-foot rate.
At the beginning, Obermeyer Place was affordable for many businesses to buy their storefronts and shops, or rent them.
Because of the special SCI zoning, the lease rates started at $20 per square foot, and the purchase prices were estimated to be between $300 and $400 per square foot. Today, leasable space commands about $50 a square foot.
That makes Laura Dubois, owner of Barking Beauties, happy since she is on a 10-year lease, which she acquired when she bought the dog-grooming business last year. Dubois said she loves being at Obermeyer Place and the lack of parking isn’t an issue for her, as some business owners there suggest.
“We’re a drop-off and pick-up service,” she said, adding she’s gotten more exposure lately because people are walking in and asking for directions to the medical center. “It’s a great location.”
Aspen City Councilman Dwayne Romero, who was on the development team for Obermeyer Place, said the biggest benefit has been that business owners were able to buy in at substantially lower rates than what was offered on the open market – a difference of as much as $600 a square foot, or possibly more.
The cost of building out their spaces to mold the operations of individual businesses proved costly for some. Their revenues simply weren’t sufficient to pay the mortgage and the construction loan.
“By the time it was approved, the permits were delayed and that created a financial bind on the owners and users,” Kruger said.
There are some businesses that chose not to return to the area after it was developed, citing either inadequate parking or they would have had to downsize their operations because the space wasn’t big enough, as was the case with Aspen Snow Removal.
The citizen task force had noted that the challenges faced by Obermeyer Place were common to other redevelopments around Aspen.
“Many enhancement projects become cute gentrification, which drives out existing users,” the COWOP stated.
Romero said Obermeyer Place works for what it is – a business and industrial park. Of course, he acknowledged, there are elements to the development that fall short.
“Every effort and every initiative you’d want to do differently based on hindsight,” he said. “The effort and intent was to relocate and assist existing businesses there, and a have a space waiting for them.”
Bendon said what is there now is better than what was there before.
“Klaus said he was embarrassed about the state of the property and he wanted to create it as a community asset, serve local businesses and do it without making a profit,” Bendon said, noting that the SCI zone makes Obermeyer Place more of a destination spot because people go there for a specific purpose.
Mayor Mick Ireland – who was not on council during the planning and approval of the project – said there are some aspects of the project that work and some that don’t.
“On the plus side, you’ve got some local businesses and on the negative side, you’ve lost some lower-end businesses,” he said, adding the hope was that it would be a busier place. “It’s not a total disaster but it’s not a total success either.”
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