City of Aspen’s deal with developer valued as much as $5M less than what’s offered
September 18, 2018
An appraisal on a building the city is under contract to buy puts a valuation $3 million to $5 million less than what a developer is proposing to sell it for.
He has offered to provide 21,442 square feet of turnkey, developed office space in a building yet to be developed at 517 E. Hopkins Ave.
The city went under contract with Hunt for the property in July and due diligence expires in December.
Gold concluded that the market value of that deal is worth between $18 million and $20 million.
Gold's Aug. 7 oral presentation to City Manager Steve Barwick, Assistant City Manager Barry Crook and Public Works Director Scott Miller included his scope of work, methodology and analysis of the proposed project.
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Barwick said Tuesday that he could not go into details about Gold's presentation, which was shared with Aspen City Council in executive session last month.
But Barwick noted that Gold did a "thorough and complete analysis, and not just the value of the land but how much this deal is worth to the city," Barwick said.
Part of that deal is Hunt paying as much as $100 a square foot for interior finishing; the city would pay the rest depending on its build-out specifications.
All of it will be contingent on Aspen voters this fall choosing to have city offices in that Hopkins Avenue space, along with 5,500 square feet on the top floor of 204 S. Galena St., which also is owned by Hunt.
Combined, the deal would cost the city $32.5 million.
Barwick said he is hoping to have appraisal on the Galena Street space within two weeks.
What won't be part of the appraisal is Hunt's other part of the deal, which is to remodel the current City Hall Armory building. Hunt proposes to do it for around $12 million.
The city estimated it can do it for $15.8 million, although Barwick said a lot of contingency is built into the city's figure because the Armory is an old building, is historically designated and the scope of work is not yet known.
Hunt's proposal will be known as "Option A" on the ballot.
"Option B" is the city building its own office space at 427 and 455 Rio Grande Place, which was approved by ordinance in 2017.
It's estimated to cost $26.1 million and could be as large as 40,000 square feet, according to the city's preliminary figures.
Both options involve remodeling the current City Hall.
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