Developer, city of Aspen and local housing authority partner to build 45 new apartments
December 19, 2018
In a somewhat anticlimactic meeting after a week of back-and-forth negotiating and name-calling by a city official, the Aspen-Pitkin County Housing Authority board on Wednesday agreed to a compromise on how much a developer should pay the organization for becoming a partner in three affordable-housing projects.
The housing board agreed to $207,500 to be paid to APCHA toward its operating costs for qualifying tenants and managing the deed restrictions in 45 apartments spread across three properties that the city of Aspen owns. The payment also covers APCHA's legal costs.
It's less than half of what had been negotiated between APCHA Executive Director Mike Kosdrosky and Aspen Housing Partners LLC, which has entered into a public-private partnership with the city to build the units.
There was risk that the original figure — $410,000 — would be coming out of the project's contingency fund, which effectively is city money.
Housing board members last week made it clear they didn't want any city money or dedicated housing funds being used.
A new deal was struck Tuesday and Wednesday that has Aspen Housing Partners paying straight out of its $2.7 million developer fee.
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They will develop properties at 488 Castle Creek, 802 W. Main St. and 517 Park Circle.
"I think it's a good compromise," said APCHA board member Chris Council, adding that he commended Kosdrosky for handling the deal as best he could under a stressful situation.
The developer and city officials came to the housing board last week asking for its blessing for APCHA to become a partner so the projects could receive roughly $1 million in tax benefits from the multi-jurisdictional authority's nonprofit status.
The request came at the eleventh hour — two days before Aspen Housing Partners was scheduled to close on construction loans and development agreements.
There is urgency with closing the deal because developers anticipate much higher construction costs as a result of tariff implications next year.
Housing board members tabled the request Dec. 11 not only because of the complicated decision that required more time, but also they felt the developer should pay for APCHA's increased administrative costs as a result of the projects.
That prompted Assistant City Manager Barry Crook to call housing board members "motherf—ing extortionists" after a public meeting about APCHA, which was heard by several elected officials.
Crook was placed on paid administrative leave on Tuesday; on Friday he resigned but had not worked out an end date with City Manager Steve Barwick.
Crook's behavior prompted members of Aspen City Council to apologize to the APCHA board and Kosdrosky on Wednesday.
Councilman Adam Frisch called it "incredibly unfortunate," "embarrassing" and an "outrage."
He also said the city should have come to APCHA earlier this year to ask for its partnership in the projects, and it's another example of the communication missteps happening with the community and the municipal government.
"It's a reoccurring theme in City Hall," he said.
Councilwoman Ann Mullins made a brief statement, apologizing for Crook's outburst.
"I don't condone it in anyway," she said.
Councilman Ward Hauenstein also said the city could have handled the entire situation better.
"It's inexcusable that this came to you at the last minute," he told the APCHA board, adding that Crook's behavior was regrettable, inappropriate and did harm to the board and the project.
The meeting was expected to be explosive, given the lead-up to it, but council said it mattered that elected officials acknowledged the city's mea culpa.
"The apology completely changes the tone of the conversation," he said.
The board voted unanimously to approve the operating agreements, deed restrictions, tax-exempt certificates and service subcontracts with the city and Aspen Housing Partners.
The deal is expected to close before the end of the year, with construction beginning in the spring.
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