Appraisal for Aspen’s newest real estate play comes in lower than original offer
The city of Aspen will pay $175,000 less to buy the Aspen Mini-Storage, because its $11 million offer is higher than a recent appraisal of the property’s value.
The 3-acre parcel, located in the Aspen Business Center, is worth $10.65 million, according to the appraisal.
City staff has renegotiated with the seller, resulting in the two parties agreeing to split the difference of the gap between the $11 million contract price and the $10.65 million appraisal price — in return for accelerating the closing date.
So instead of closing Feb. 20, the date is scheduled for Feb. 4.
“The seller’s agent said during the renegotiation process that the seller does have interest from at least one other able party at or above the $11 million price, but that they would be interested in lowering their price to make an expeditious closing more certain,” wrote Chris Everson, the city’s affordable housing manager, in a memo to Aspen City Council.
Council is expected to review amendments to the purchase contract during its regular meeting Tuesday.
The elected board in October agreed to enter into a purchase contract with contingencies, including that the deal was subject to a real estate appraisal of the property.
The city’s $550,000 earnest money payment will become non-refundable once council agrees to the amended contract.
The mini-storage parcel is seen as key to the city’s plans for an adjacent parcel known as the Aspen Lumberyard where hundreds of new housing units are being planned.
Everson said Monday that the mini-storage parcel could serve as the access point to the neighborhood, which would meet the Colorado Department of Transportation’s traffic plan for the area.
The mini-storage piece also could have housing on it, depending on the feedback Everson and the design team receive from the public in the coming months.
They are having an open house at Roxy’s Market in the ABC on Wednesday from 4 to 7 p.m. to show density maps for the site.
Two more open houses will happen Thursday from 11 a.m. to 1 p.m. and 3. to 6 p.m. in City Hall.
“The objective is to use that piece of property in a way that is guided by public feedback,” Everson said, adding that the project will be in front of council again in March and a preferred layout chosen by the end of the year.
“We need to have much more dialogue with council,” he said.
The city caught criticism when it bought the lumberyard property over a decade ago for $1.45 million more than what it was appraised at.
With the two parcels combined, the city will have 10.5 acres for just over $29 million.
Tens of millions more will be needed to build the housing units. The city could draw from its housing fund, fueled by real estate transfer and sales tax revenue, or borrow the money.
City staff plans to bring a separate contract to Council, which would place the mini-storage facility manager under contract for continued, uninterrupted operation of the facility.
According to Everson, the annual net income of the mini-storage operation is between $200,000 and $225,000, resulting in about a 2% capitalization rate during the time which the city would operate the facility prior to redevelopment.
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