Hot real estate leaves city flush | AspenTimes.com

Hot real estate leaves city flush

Janet Urquhart

Booming real estate sales don’t spell bulging pockets just for local brokers. Aspen’s coffers – one dedicated to the Wheeler Opera House and one earmarked for employee housing – are also enjoying record revenues.As goes the local real estate market, so goes the city’s two real estate transfer taxes, or RETTs, charged when property changes hands.RETT revenues set a record last year and are on pace to break it this year, according to Paul Menter, the city’s finance director.”It’s insane,” he said. “What it means is that real estate has reached another plateau in the community.”It’s just reflective of how unique this place is and how valuable real estate has become.”The Wheeler RETT, a 0.5 percent tax on all real estate sales, generated $2.6 million by the close of June this year, compared to $1.4 million in the first six months of 2004.Last year, the city’s total RETT revenues were up about 40 percent from any previous year.”This year, we’re running 80 percent higher than that,” Menter said.Helping the increase along, of course, was the recent $33.5 million sale of the Hotel Jerome, which produced $496,000 in RETT proceeds. About two-thirds of it went to the housing fund; the other third went into the Wheeler fund.Voters first approved the Wheeler RETT in 1979. Its first year produced $323,345 in revenue. The 1 percent housing RETT has existed in its present form since 1990; it is not collected on the sale of deed-restricted employee housing or on the first $100,000 of any other residential property sale.In 2004, a record year for Pitkin County real estate sales, the Wheeler RETT produced $3.4 million in revenues, while the housing RETT generated $6.2 million in proceeds.Menter voiced doubt that either voters or the city anticipated how much the RETTs would produce when the taxes were first enacted. And both taxes are far outpacing the city’s budgeted estimates for this year.”We do have more than we thought we’d have, but we have reasonable plans to use it,” Menter added.Much of the housing revenue will go toward subsidizing Burlingame Ranch, a development of up to 236 units of employee housing that will be under construction before the year is out. The Wheeler RETT helps fund the operations and maintenance of the historic opera house, as well as an endowment that has been established for the facility.The unexpectedly high RETT revenues the city is currently enjoying probably won’t last, Menter added. The inventory of real estate on the market will shrink as properties are snapped up. And sales like the Jerome don’t happen every day.”Things like the Jerome make a big impact on a one-time basis,” Menter said.Janet Urquhart’s e-mail address is janet@aspentimes.com

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