Limelight request sheds light on Snowmass Base Village fee structure
The Aspen Times
Oz Architecture/Courtesy image |
Condo owners are balking at a request for the Base Village Master Association to designate the proposed Limelight Snowmass hotel as commercial property rather than residential, which they say will significantly reduce its share in Base Village assessments.
An amendment to Base Village declarations clarifying that a hotel is considered commercial space was proposed at a meeting of the Base Village Master Association on Wednesday. A vote on the amendment was continued to the organization’s June 3 meeting so that more information could be provided to voting members.
“A hotel is more akin to a commercial operation, therefore the hotel should be classified as commercial,” said Craig Monzio, vice president of development at Related Colorado, on Thursday.
In fact, Pitkin County Deputy Assessor Larry Fite said that is generally how hotels are classified in the county for tax purposes, using the Hotel Jerome and The Little Nell in Aspen as examples.
“My guess is that if the Limelight were to be built and operated in a similar manner as either of those, then they would also be classified as commercial as well,” Fite said.
The Viceroy Snowmass is treated by the master association as residential, condo owners point out, but Monzio said that’s because while it operates as a hotel, the Viceroy is condominiumized and it’s units are sold to individual owners.
Complex taxing structure
Property owners in Base Village pay taxes and assessments to a few different entities that other owners in the county don’t. One is the Base Village Master Association, designed to maintain public areas in the development. The Base Village Master Association assesses fees of $3 per square foot of residential property and 75 cents per square foot of commercial property.
Base Village owners are concerned that those expenses will increase dramatically when new amenities come online. And they now believe that if the Limelight and additionally Building 6, which will be bequeathed to the town as a community benefit, aren’t contributing as much as anticipated, condo owners’ share of the master association expenses will increase significantly.
However, a fee of 1.5 percent is assessed on any rental income in Base Village by the master association. Monzio said because the Limelight will be a hotel rather than a condo as originally envisioned for that building, it will have a higher turnover of paying guests, resulting in an increase in rental assessment revenue.
“One of the important components that needs to be understood is even if they are paying the commercial rate … they will also be paying the rental assessment,” Monzio said.
Metro district impact
Property owners in Base Village also pay taxes to the Base Village Metro District in addition to other property taxes. All commercial property is assessed at a higher tax rate than residential, according to state law, Fite said: commercial property at 29 percent, and residential at 7.96 percent.
However, in the case of Base Village, that currently doesn’t mean the taxes paid on the commercial property outweigh that paid by owners of residential condos.
“The value of commercial property in Base Village relative to elsewhere in the county is probably not as high because it’s a difficult commercial environment to be in,” Fite said. “They have a hard time renting spaces, and the rent they get is much less than you would get in even Aspen Highlands.”
“The values are assigned based on what the things have sold for,” he added.
Why now?
Aspen Skiing Co. is expected to purchase Lot 2 and develop the Limelight Snowmass hotel there, but negotiations are still ongoing despite three years of talks. In December, while Skico named some parts of the town’s review process as important to the deal going through, representatives also said there were other factors to consider.
“This is one of the things we wanted to make sure happened,” said Don Schuster, vice president of hospitality development, about the amendment to the declarations.
Schuster added that Skico volunteered to pay the rental assessment to make up for the drop in other master association fees. And, eventually the Limelight will pay more in property taxes than condo owners — at least, the company hopes its investment’s value will increase with time.
up for vote
Despite campaigning to get other condo owners to vote in person or by proxy, Keefer feels it’s unlikely their side will win.
That’s because while residential property gets one vote per unit, commercial gets votes assigned by the amount of square feet owned.
“As owners, it’s stunning to think we are paying 80 percent of the income … but we do not have comparable representation or comparable votes,” Keefer said.
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