Mark Hunt sues city of Aspen over restrictive zoning
January 25, 2019
Commercial landlord Mark Hunt is taking the Aspen government to court in both Pitkin County and Denver over zoning regulations that restrict development at two of his commercial buildings.
Hunt's North Mill Street LLC, which owns the two-building Mill Street Commercial Center across from Clark's Market, filed court documents Wednesday in Pitkin County District Court and the U.S. District Court of Colorado claiming the city's Ordinance 29 has hamstrung the owner's ability for future redevelopment because it is "economically unviable."
The complaints name the city and past and current members of the Aspen City Council — Mayor Steve Skadron and councilmembers Art Daily, Adam Frisch, Ann Mullins and Bert Myrin — who adopted Ordinance 29 in January 2017. Daily is the sole defendant who currently doesn't sit on council.
Ordinance 29 was one of six new ordinances that were part of sweeping changes made to the city's land-use code from 2016-17.
In Wednesday's court filings, Hunt's attorneys at the Aspen firm Garfield & Hecht PC claim Ordinance 29 unfairly targets the Mill Street Commercial Center by not allowing residential development there.
The plaza, located at 465 and 557 N. Mill St., is home to locally serving business that have been waiting to see their fate for more than a decade because of the changing ownership's plans to redevelop the property.
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Tenants include an athletics consignment store, Aspen's only coin-operated laundromat and an auto-service shop, among other businesses. Both buildings are zoned service-commercial-industrial, more commonly referred to as SCI.
The litigation is similar in nature to the lawsuit North Mill Street Investors filed against the same defendants in February 2017.
North Mill Street Investors, which included Aspen developers Andy and Nikos Hecht, bought the 20,000-square-foot commercial property for $20 million in 2007.
In July 2017, after the adoption of Ordinance 29, the then-owners filed a land-use application with the city to rezone the property to mixed-use. The application says that a mixed-use building — which would allow office, commercial, residential service, civic and public uses — would be consistent with the surrounding neighborhoods and include free-market and affordable housing.
However, the application has been pending because of their suit claiming the city's revised land-use code bans the development of free-market residential in SCI zones, whereas before the land-use code revisions, SCI properties were allowed free-market units as a conditional or ancillary use.
The suit has yet to be served on the city, however, because of ongoing settlement efforts, according to court documents.
Meanwhile, Hunt bought the two buildings in June 2018, paying $15 million for both the 465 N. Mill property, a 20,000-square-foot building that sits on 49,901 square feet of land, and the 557 N. Mill address, an 8,000-square-foot building on 6,301 square feet of land, according to property records. The amount Hunt paid was $5 million less than the sellers bought the property for 11 years earlier.
As part of the acquisition, Hunt also was entitled to the previous owners' rezoning application.
Hunt's action in Pitkin County District Court is called a "petition for inverse condemnation," similar to a takings proceeding, which means the city is accused of devaluing the property's values because of its redevelopment restrictions.
"(North Mill Street LLC) has been damaged by the regulatory taking of this property by defendants without just compensation, in an amount to be determined through these proceedings," the complaint says.
Hunt's 28-page federal suit in Denver seeks a declaratory judgment deeming Ordinance 29 invalid and unenforceable. Other civil claims include allegations that the city violated Hunt's right to due process and his equal protection by forbidding free-market housing while other SCI developments in Aspen have built free-market housing.
The current litigation claims the city is practicing double-standards because of its partnership in Obermeyer place, another SCI-zoned development that included 21 free-market residential units. The suits also reference the city-owned lumberyard parcel near the Pitkin County Airport, also in an SCI zone. The city has said that it intends to develop affordable housing on that property, but it "can circumvent the same restrictions (applied to Hunt's building) in order to construct an affordable housing construction complex through the city of Aspen's COWOP process previously used to develop Obermeyer Place," the federal suit contends.
Attorney Chris Bryan of Garfield & Hecht PC said, "The federal lawsuit and the inverse condemnation petition that was filed in state court are substantially similar to the claims that were included in the 2017 lawsuit against the city."
He said the two suits "were filed separately for procedural reasons."
City Attorney Jim True declined comment.
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