New owner alters plan for marketing Highlands base
August 19, 2008
ASPEN ” The new owner of the Aspen Highlands base area hopes a new marketing approach breathes new life into the village.
Jordan Sarick has tweaked the Hines development team’s effort to build the Highlands base into a bustling retail center, according to Mason and Morse Real Estate’s Ed Foran, leasing agent at Highlands. Instead, Sarick and Foran will try to fill the numerous vacant commercial spaces with offices.
“If you’re a retail business that relies on visibility and traffic, it’s not going to happen,” Foran said in a candid assessment of the village’s status after six years.
Gerald Hines, a Houston-based developer with a long list of successes around the globe, wasn’t able to complete his vision at the Highland base. The mix of retail shops, restaurants, offices and residences was completed in 2001, but the place was often lifeless. Hines and his team argued during the Pitkin County government review process in the mid-1990s that the project was getting whittled down too much to be successful. The concept, they insisted to no avail, depended on a high density of residences and hotel beds.
Winters bring some vibrancy to the village, simply because Highlands logs more than 200,000 skier visits. Hines tried various marketing schemes to make the base more lively during summers. (A plan was even floated for a miniature golf course, but it wasn’t built.)
Sarick bought 24,000 square feet of the base area from Hines, Hines Highlands Limited Partnership and Bell Mountain Partners last November. The $13 million deal involved ground-floor space only ” nothing on the upper two stories of the buildings that comprise the base. Also excluded were the Ritz-Carlton buildings and the Aspen Skiing Co. day lodge and administrative office complex.
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Foran said the foot traffic isn’t high enough to support most retail operations. Even during winters, some spaces that were formerly marketed for retail are too far off the beaten path to be successful. The corridor between the parking lot and the Exhibition lift scores heavy traffic; otherwise it is slim pickings.
“What’s here is really not enough to support traditional retail,” Foran said.
About one-quarter of the 24,000 square feet that Sarick acquired sits empty. One 3,000-square-foot space has never been leased since the village was completed, according to Foran.
Faced with that dilemma, the new team is dividing the area up and promoting the smaller spots as affordable office space. Foran said the Obermeyer Place project, behind the Pitkin County courthouse and jail, is the model. “They filled right up,” he said. Even so, affordable commercial space remains in short supply in Aspen.
Highlands Village is being marketed at $30 per square foot, with tenants responsible for the usual triple net expenses, including a portion of taxes, common utilities and association fees.
“We think it would be an attractive place to work because of the mountain,” Foran said.
An office comes with one free parking space per 750 square feet. Punch passes are available for employees. Parking presents challenges during ski season, but otherwise there is plenty available.
No one with a proposal for a retail store will be turned away. “I guess we’re casting a wider net,” Sarick said.
And the hope is that the addition of offices will generate more of the critical mass of people needed to make restaurants and local-oriented stores more successful.
The existing tenants include the Z.G. Grill and Crust restaurants, some art galleries and sporting goods stores. Foran said he sees a need for a small general store.
Foran said it should become clear within six to 12 months if the new vision for Highlands is successful. Sarick has already relocated his office to Highlands. He controls Eastwood Developments, a family-owned real estate-development and investment company. Its projects included development of the Thunderbowl Townhomes at Highlands.
Sarick said he feels the altered direction will work at Highlands, but nothing is certain. “Am I sure it’s going to work? No,” he said.
The goal is to establish the village to the point where the rents are high enough to make his investment pay off but reasonable enough for the tenants to be profitable, he said.