City of Aspen negotiates with developer to take restaurant space for office use

The current building at 517 E. Hopkins Ave. The City of Aspen is in negotiations to buy the property and have developer Mark Hunt build a new government office building.
Anna Stonehouse/The Aspen Times


There are four options on the table for new City of Aspen office space. Here is a breakout for each one:

Option A Two-roof solution (Rio Grande/Galena Plaza and Armory). Total square footage: 60,000 Total cost: $46.1 million

Option B 517 E. Hopkins Ave., Armory, Rio Grande/Galena Plaza and former Aspen Chamber Resort Association space. Total square footage: 56,642 Total cost: $50.2 million

Option C 517 E. Hopkins Ave., 204 S. Galena St., Armory and the existing Rio Grande building, where the parking department and Tasters Pizza are located. Total square footage: 57,542 Total cost: $51.3 million

Option D One-roof solution (Rio Grande/Galena Plaza) Total square footage: 74,600 Total cost: $47.9 million

The City of Aspen is renegotiating a contract with developer Mark Hunt to buy more office space where the current Aspen Kitchen restaurant is located.

Justin Hanna, the project manager for the city’s new office space effort, wrote in a memo to Aspen City Council in advance of the meeting Monday night that Hunt has offered to sell 5,500 square feet on the second level of 204 S. Galena St.

Hunt’s offer is in response to city officials’ analysis as part of a contract to buy a redeveloped building at 517 E. Hopkins Ave., which would be designed for municipal government offices.

Council earlier this month approved a real estate contract stipulating that Hunt will provide a turnkey 21,442-square-foot office building for $23 million.

Both Hunt-owned buildings are located across the street from City Hall. Architectural plans show that a municipal government campus would be created between all three buildings.

The city has completed its due diligence on the 517 E. Hopkins building, but officials say it leaves the government short on office space.

The real estate contract outlines a 45-day due diligence period, which ends on Aug. 16.

Hanna explained that an amended and restated contract is being negotiated. If a new one is executed, the original contract will be nullified and the city will have an additional 30 days of due diligence.

It’s estimated that the government needs 54,600 square feet through 2035.

As part of that overall square footage, the city plans to keep the Armory building as City Hall with an estimated $15.8 million renovation.

But that price tag could be reduced if the city takes up Hunt’s offer to use his builder, which will be contemplated in the new contract.

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 construction costs are escalating at a rate of 10 percent a year locally, according to city officials.

The city’s project, which was supposed to break ground this past spring, is tied up in litigation. The project is on hold 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.

Council on Monday night will consider four options for future city offices, which range between $46.1 million and $55.8 million.

Staff is not recommending one plan over another, but pointed out in the memo that there’s more certainty around the 517 Hopkins and 204 Galena option.

“In July 2016, council gave us the direction that the number one design criteria for solving the space needs long term was that ‘City Hall’ remain in its historic location, at the Armory,” Hanna wrote in the memo. “If this is still true, then 517/204 seems to be a viable option.”