City of Aspen takes stock of its landlord role | AspenTimes.com

City of Aspen takes stock of its landlord role

The city of Aspen manages nearly 30 leases for its government-owned spaces, collecting well over $1 million a year in rent.

An inventory of the city's rental properties and lease details was presented to Aspen City Council last week during a work session on commercial vitality.

The city owns a handful of properties that are used for commercial purposes and are leased to various businesses at subsidized rates. The city embeds regulations into some of those leases in an attempt to provide an inventory of small, unique, locally serving businesses to the community.

"These leases contain language that include requirements for businesses to provide year-round, local service at affordable prices," according to a memo to council by Jessica Garrow, the city's Community Development director. "The city has experienced some success in leasing public commercial space to commercial tenants, and overall those spaces and the businesses they support have value to the commercial mix."

The city controls the leases on three restaurants in Aspen — Red Mountain Grill at the golf course, Aspen Public House in the Wheeler Opera House building and Taster's Pizza, in the old Aspen Youth Center across from Rio Grande Park.

Aspen Public House has a five-year lease on the 2,618-square-foot space it rents from the city. The restaurant pays $48 a square foot, plus 8 percent after a set breakpoint on gross sales.

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Red Mountain Grill recently renewed its five-year lease with the city, and will pay $25,000 a year for its 2,043-square-foot restaurant, plus 8 percent of gross sales over $300,000 but less than $600,000.

Taster's is on a month-to-month lease and pays $1,350 a month for roughly 1,200 square feet.

Its owner, Stacy Forster, has indicated he would like to remain in the space with a long-term lease, said Jack Wheeler, the city's capital asset director.

But because the restaurant is located in a building that may be remodeled into city office space, the future of Taster's has been in a holding pattern for almost two years.

It's up to voters to decide Nov. 6 if 455 Rio Grande Place, along with the building next to it, should be redeveloped as part of the city's Ballot Question 2D.

Regardless of the election outcome, council has voiced its support to keep a restaurant in that location.

When a firm plan is in place for redevelopment along Rio Grande Place, a request for proposals will be issued to draw competitive bids from would-be operators, Wheeler told council.

Aspen Mayor Steve Skadron said it's worthwhile to have city-owned spaces be filled with restaurants, since they serve as gathering places and contribute to the tax base.

"Using city space congruent with community goals make sense," he said.

The city has been criticized over the years for its 2007 purchase of the BMC West lumber yard for $18.25 million, which was at the time above what fair market value would have garnered, according to an appraisal done on the property.

The city bought the 4.74-acre parcel, located near the Airport Business Center, for affordable housing but has no current plans to build any there.

It has been renting the property to ProBuild LLC. The city collects roughly $450,000 a year in rent for the property, and since its acquisition, about $5 million in total has been received in rent revenue.

The other commercial property the city rents out is the space where Valley Fine Arts is located in the Wheeler Opera House building. Owner Mia Valley has had a lease since 2011 for the Mill Street space and pays $80 a square foot, according to the inventory list. Valley's lease expires in 2021 for the 497-square-foot gallery space.

The Red Brick Center for the Arts controls 24 leases for local nonprofits and entities using the gymnasium in the city-owned building. Tenants pay about $22 a square foot, which amounts to nearly $247,000 in revenue that goes back into the building's operations.

During its review of city-owned spaces last week, council was asked if it supported expanding the program of acquiring and leasing more properties to attract and retain a wide range of businesses.

Ann Mullins was the only council member who voiced support for the city buying more properties and potentially creating a subsidized program similar to the local affordable-housing system but for commercial businesses.

"I think it's something we should pursue," she said. "I don't think leaving it up to the free market is going to give us the mix we want downtown."

csackariason@aspentimes.com

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