BMC West appraisal on track with Aspen’s purchase price
ASPEN ” A recent appraisal of the BMC West property that the Aspen government purchased in 2007 shows it’s worth $1.45 million less than what it was bought for at the time.
However, the publicly owned land has opened up access to an adjoining parcel owned by the city, which gives the property much more value, according to city officials.
“Obviously it’s worth a lot more to us because we own that nearby property,” said Sally Spaulding, the city’s community relations officer. “It unlocks $8.9 million in land value for us.”
The appraisal, which was conducted by Dave Ritter of The Appraisal Office, was commissioned by city officials for $3,750 in response to observers who criticized the government for spending too much money on the BMC West parcel for the purpose of building affordable housing there.
The city purchased the 4.74-acre parcel in December 2007 for $18.25 million. The appraisal’s final estimate of reasonable market value for the lumberyard parcel near the Aspen Business Center at the time of purchase was $16.8 million.
The adjoining 2.5-acre Burlingame parcel was valued at $8.9 million, making the combined property worth $25.7 million, according to city officials.
“The entire 222-acre Burlingame Ranch property was purchased at a net cost of $1.8 million, making the 2.5-acre Burlingame parcel adjacent to BMC West a $20,000 pro-rated cost to the city of Aspen,” said City Manager Steve Barwick in a press release.
The city-owned Burlingame parcel would have been very difficult to develop for housing without the purchase of BMC West due to access and other issues, according to city officials.
“The BMC West site is an excellent location for employee housing without disrupting the neighborhood,” said City Councilman Dwayne Romero in a prepared statement. “It’s close to town, easily accessed by public transit and connects to an adjacent parcel already owned by the city ” making it possible to house even more people.”
However, city officials are entertaining a potential offer on the BMC site from a group of individuals, represented by a local businessman. They are still interested in the site but have temporarily withdrawn the offer, which is reportedly more than what the city paid for it.
Their conceptual plans on the site include employee rental and middle-class housing, as well as a commercial development that would include an underground supermarket, a pharmacy, a low-cost hotel and employee-owned businesses, according to the representative who asked to remain unidentified.
“We’re open to all kinds of ideas out there,” the individual said, adding a movie theater, a bowling alley and other community amenities could be possibilities. “If it’s done right, there are a lot of opportunities.”
The city’s plan at the time of purchase was to build up to 100 affordable housing units on the property. The housing would be geared toward lower- to middle-income employees, with both rental and ownership units.
The appraisal assumes 185 units could be built at the site, which would contain 185,000 square feet and up to three stories of construction.
City officials have asked the hospital, the school district, the Roaring Fork Transportation Authority and Pitkin County to participate in a joint venture in buying some of the housing at BMC West.
In 2007, the preliminary price estimate for each unit was just more than $600,000, which included land and construction costs.
How to subsidize the units has yet to be hashed out. But if the city sells them at their projected price of approximately $242,000 each, it will be out of pocket between $350,000 and $450,00 for each unit.
Aspen’s BMC West location was one of three stores sold on the Western Slope in 2007 to Harbert Lumber Co., a Grand Junction building supplies dealer. Rather than buy the land and building, HLC is leasing the space for $50,000 a month from the city, bringing in $600,000 revenue annually.
City officials have gotten their fair share of criticism over the purchase of BMC West, but they don’t apologize for the risky and controversial move. They argue that as land prices continued to rise, it was the last best opportunity to acquire a parcel that size, which will be used for the greater good of the community.
John McBride, who developed and owns the Aspen Business Center, criticized the city’s purchase at the time, saying land in the business center sold in 2007 for $30 a square foot. BMC West was purchased at more than $90 a square foot.
Critics argued the city government has effectively driven up comparable land prices as a result of the BMC purchase. As a result, it has widespread implications within the real estate market and development industry throughout Pitkin County.
The property has development restrictions through covenants established by McBride. The covenants regulate how dense the development can be and how the housing can be designed.
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