Fiasco on Wall Street invades Aspen council’s thoughts
September 30, 2008
ASPEN ” Monday’s stock market crash was felt in Aspen as the City Council reviewed the proposed Aspen Walk project ” though it was hardly council members’ only worry.
After expressing numerous concerns about changes in the project, the federal investigation of the developer, and the state of the economy in general, the City Council decided it was not yet ready to make a decision about the proposed condominium and affordable-housing complex in Aspen’s east end neighborhood.
By a vote of 2-1, with Jack Johnson voting against, the council voted to continue the public hearing until Oct. 14. Councilman Dwayne Romero not in attendance because he has a contract to purchase property within 300 feet of the proposed project.
The proposed Aspen Walk plan would demolish 11 affordable units and 14 free-market units in two aging structures, the Park Avenue Apartments at 404 Park Ave., and the Smuggler Mountain Apartments at 414 Park Circle. According to the plan presented Monday, the developer would replace them with 18 affordable-housing units and 14 free-market units. The project calls for the developer to partner with the Aspen/Pitkin County Housing Authority, owner of the Smuggler Mountain Apartments, to whom it will also pay $750,000 in unrestricted funds.
Responding to council’s concerns in August about size, the developers returned yesterday with a plan that split the buildings and reduced their free-market square footage, and eliminated six of the previously proposed affordable-housing units. It also found a creative solution for the parking shortage that involves two electric cars for residents’ use.
Mayor Mick Ireland began the meeting by expressing concern about Monday’s stock market crash and its consequences for a development like Aspen Walk. Later, he expressed dissatisfaction with the developer’s decision not to address the stock market crash and its impact on the project during the hearing.
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Ireland also expressed concern that a federal investigation of Tom Petters, CEO and chairman of Petters Group Worldwide, which holds project partner Petters Real Estate Group in its portfolio, could lead to problems.
“To say the least, the events surrounding the principal are unusual and would cause me concern granting approval that could wind up in bankruptcy court or somewhere else as a collateralized asset to be fought over,” he said.
But surrounding events were only the tip of the iceberg. Council members were also frustrated that six affordable-housing units had been removed, but no free-market units.
The developer’s representative, Tom Klassen, said the unit count was deceiving as the free-market housing units had been reduced in size. All in all, the developers had reduced 4,121 square feet of affordable housing and 3,361 feet of free-market housing, he said.
Council members were also concerned about the developer’s recent decision to offer cash in lieu for the affordable housing it cannot build on site.
Tom McCabe, housing authority director, noted that he had a piece of land in mind on which to build housing with the approximately $940,000. However, Ireland argued that the community should not be contributing its assets so that developers can make a profit. Near the end of the meeting, several community members also asked council not to accept the cash buyout.
Council members also questioned McCabe’s claim that an Internet search suggested buildings with both renters and owners were prone to lawsuits between the two.
“I’m sure the Internet is replete with stories about how I’m a bad person, but I don’t believe that,” said Ireland, who asked for a serious analysis instead.
The land-use code requirement that 50 percent or more of affordable-housing units have an above-grade floor also caused concern. At least 50 percent of the living space in the proposed affordable housing is above-grade, but the floors are not. Both McCabe and housing authority board member Marcia Goshorn argued that the intent of the code, which they had pushed for, was intended not to nitpick but to stop the practice of building affordable-housing “bunkers.”