City of Aspen, developers squabble over who should pay for new mountain base development
December 4, 2018
Negotiations between the city of Aspen and developers wanting to build lodges and a new ski lift at the base of Aspen Mountain have gotten tense over how much public money should go toward the project.
Aspen Mayor Steve Skadron made it clear Monday night during City Council's review of the Lift One corridor that upward of $5 million in asks by developers won't work for him.
"I believe the city has already contributed above and beyond its responsibility," Skadron added, referring to zoning changes and increases to building sizes and amendments to developer entitlements worth millions of dollars, to name a few concessions.
"I'm not one bit persuaded that a $350 million development gets derailed because it lacks a few million dollars in public cost-sharing," he continued.
However, Skadron was in the minority on council when it comes to a public-private partnership.
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While they have different ideas and methods to get there, council members agreed that some cost-sharing is appropriate for an improved Dean Street where a new Telemix lift would be accessed and the development of a new park for return skiing.
A debate of historic proportions
What's at issue is Lift One Lodge's request that the city put $3.6 million in development fees toward the project's relocation and rehabilitation of the historic Skiers Chalet Lodge, where a new ski museum operated by the Aspen Historical Society would be located. The building also would house skier services and ski patrol operations.
Who pays for that building incited some tense conversations toward the end of the six-hour-long meeting.
Michael Brown responded by saying that the economic uncertainties may be too great to carry that kind of expense and their plan might have to change.
"If the city isn't willing to participate in cost-sharing agreements, we are going to have to get creative," he said, adding maybe the lodge becomes affordable housing, along with the Skier's Steakhouse building, which is now planned to be a bar and restaurant. "The burden would shift back to us and we may have to look at alternative solutions, which have consequences."
He noted that there are many examples of lodge proposals and developments that have not played out successfully in recent years.
"We aren't going to put ourselves in a financial (loss) like the dozens of lodges that have come before us," Brown said, noting that many of the amenities his team are asking the city to pay for are for community benefit.
The development package also includes a 60-foot-wide "skiway," an underground parking garage with public spaces, public park space and other amenities.
Because it involves zoning changes, variances to the land-use code and the use of city-owned land, the corridor plan — including both lodges — will go to Aspen voters March 5.
Lift One Lodge had originally proposed to deliver the lodge building as a "white box" for the historical society's 3,000-square-foot museum when it received an amended approval in 2016.
But they were asked to change the programming and configuration of their buildings, which includes 107,000 square feet of timeshares and a handful of free-market condos, in order to accommodate a new chairlift to Dean Street.
Meanwhile, Gorsuch Haus is a proposed 64,000-square-foot hotel with 81 keys and some free-market condos just up the hill on the Lift 1A side of Aspen Mountain.
Councilwoman Ann Mullins said she fears that the entire project, which she has heard overwhelming support for, won't pass at the polls if council doesn't enter a public-private partnership.
"To reiterate, what's been put together is a really good project, and 20 years from now people will look at this and appreciate what council did, if we approve it," she said, adding that she supports having a ski museum to maintain Aspen's rich history of skiing. "At this point we need to partner with these guys.
"It's not in our best interest to be picking it apart."
Frisch said it's inappropriate for developers to ask for city financial assistance in light of the significant increases that their property values will enjoy when their developments are centered around a chairlift, making it ski-in, ski-out access.
He also said it was believed during the past 18 months of planning for a relocated chairlift that the ski museum was always part of the plan.
Brown responded by saying, "If you start pulling the tapestry, it could unwind."
Councilman Ward Hauenstein said he supports a public-private partnership — but not by setting a precedent in taking development fees that would be used for some other taxpayer use.
Councilman Bert Myrin has suggested that a special taxing district or a metro district could pay for it all.
Developers, their representatives and other city officials said there isn't enough time to get that set up because of calendar restraints and the complexity in doing so.
Upcoming debate centers around sharing, carrying the burden
Council's review Monday was the project's third public review, with the final one scheduled Dec. 10. That's when elected officials are expected to vote on an ordinance that could go to voters in the March election.
However, there will be a month before council's deadline to get a question on the ballot, which is Jan. 14, so more meetings could occur if elected officials need more time to consider the two land-use applications.
Cost-sharing is the largest piece to fill in the puzzle before it all goes into an ordinance to be approved by council and ultimately the voters.
Besides the $3.6 million in development fees for the museum, developers also want their estimated $359,000 in tree mitigation fees to go toward a new park.
Developers also are proposing the city pay $760,000 for Dean Street improvements.
Who pays for the park, which is part of the ski corridor and estimated to cost between $1 million and $1.5 million, also must be discussed, said Community Development Director Jessica Garrow.
The majority of council did agree, however, that developers should get breaks on a certain amount of affordable-housing requirements based on incentives written into the land-use code to foster lodge development and associated public amenities.
For Gorsuch Haus, instead of just over 55 full-time employees, developers will have to create housing for just under 22 full-time employees.
And for Lift One Lodge, it's almost 14 employees who they don't have to mitigate for.
Combined, it's a savings of over $11 million between both developments.
However, developers said if a mandated audit two years after their lodges are built finds that they need more employees than what they mitigated for, they'd provide housing for them.
Council also agreed on the phasing schedule of the construction projects, with both lodges going at the same time and the hope that the chairlift is only out of commission for one year, possibly two.
Frisch has been the most vocal about the threat of the chairlift being held hostage by stalled development or litigation.
Garrow said Tuesday there are standards for financing that must be met in the city code before development can begin, including proof of financing.
The final component that council deliberated on and agreed to was to leave South Aspen Street alone, for now.
There was discussion about whether to improve safety on the steep grade during the winter months.
The majority of council did not support a possible snowmelt system, but agreed that the possibility of it could be included in the ordinance for future officials to decide if it's necessary and who would pay for it.
In the meantime, developer applicants said they would evaluate the efficacy of city plowing, snow storage and removal, and do a detailed traffic study to understand the impacts of new development to South Aspen Street.
During the public portion of Monday's meeting, resident Charlie Bantis said the proposal is a once-in-a-lifetime opportunity that shouldn't be lost because of nuance.
"The list of public benefits is astounding," he said. "Ten or 15 years from now I will predict that we're going to look at this project and think of the Limelight today — 'it's a great community amenity, wow, really glad it happened' — and no one is going to remember or care however the pot of money was split up to make all of the public amenities happen, and they are not going to care that housing mitigation took place within the rules set out in the land code. Ten or 15 years from now no one is really going to remember that."
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