Officials grapple with locals being priced out of Aspen |

Officials grapple with locals being priced out of Aspen

Locally serving businesses and affordable restaurants are few and far between; council members concerned

Aspen’s elected officials last week decided to not make the preservation of locally serving businesses a critical goal due to the complexity of the issue, but they lamented that the town has changed significantly and local residents are being priced out.

“What I mean are places for locals to still enjoy this community, and we’ve seen such a deterioration of it,” Mayor Torre said during last week’s council goal-setting retreat. “Currently, we have several locally priced affordable restaurants that are not in operation because of redevelopment, and it’s impacting us community wide.”

Recognizing that controlling the market is nearly impossible, council members agreed to continue working on the issue with willing partners, like the chamber of commerce and the business community.

Councilwoman Rachel Richards said she wonders if the people who market the resort or existing business owners feel there is a problem.

“Does the business community feel any of the concerns that we’ve talked about at the table?” she asked. “Do they feel the hollowing out of the Aspen guest experience, that it’s just becoming this high-ended, glitzy, none of the cool little shops that had local stuff are left anymore?”

She also suggested working with a partner organization to offer small business loans for certain types of businesses, “to offer incentives to influence the market while not controlling it.”

Councilman Skippy Mesirow said it may be up to the municipal government to offer some spaces it owns to control the rent.

“As long as rents for restaurants are $50,000 and $60,000 a month you are not getting more affordable food in those spaces,” he said. “Trying to control the free market I think it’s a losing strategy in so many ways, but if we are going to be serious then we need to create a secondary market effectively, and we have community spaces available.”

A man utilizes the pedestrian access while the Wheeler Opera House is under construction in downtown Aspen in May 2021. The Public House is one of three spaces the city of Aspen rents to restaurants. (Kelsey Brunner/The Aspen Times)

The city serves as a commercial landlord for three restaurant spaces it owns at the Wheeler Opera House, the municipal golf course and the Rio Grande building, the latter of which is vacant because of construction of city offices.

The terms of the leases for restaurant operators in the city’s spaces have certain expectations written into them, like operating hours, and in turn, they do not pay market rents.

The armory where City Hall is currently located will be mostly vacant when the new city office building on Rio Grande Place opens this fall, and the armory could be a possible location for locally serving businesses that the municipal government can control through low rents.

Councilman Ward Hauenstein said he’s been researching the issue and said government’s role is not to try to control the private sector.

“I can’t find anywhere in the country that has rent-controlled commercial,” he said.

Effectiveness of deed restrictions in question

The city has tried in the past to limit menu prices in some of its locations, but it proved too difficult to control.

Aspen City Council also has negotiated with developers and put deed restrictions on menus with different margins of success.

The city has failed to get an affordable restaurant in the basement space of at 508 E. Cooper Ave. (near the Paradise Bakery corner), despite trying for a decade.

That’s because the council that negotiated with the building’s owners in 2008 failed to anticipate the estimated $1 million needed to finish the space, which has kept potential tenants away from turning it into a restaurant.

Monthly rent of the basement space is capped at $50 per square foot with standard annual increases, and there are price restrictions on any future menus, according to a settlement agreement between the city and the building’s owners.

Developers sued the city in 2007 after council denied their request to subdivide the property into separate condominium interests.

The two sides came to a settlement in 2008, allowing for redevelopment based on the condition that a deed restriction keep the basement affordable.

City officials have said they recognize the deal — negotiated by then-council members J.E. DeVilbiss, Jackie Kasabach, Jack Johnson, Dwayne Romero and Steve Skadron — was bad for the city. The developers got a penthouse that sold for $13.2 million in 2015 and the community got an empty basement.

The current council has met in executive session in recent months regarding the space but nothing has changed.

“Council would like to activate that space,” said City Attorney Jim True.

Little Annie’s building sits vacant in September 2017 before the owners of Clark’s Oyster bar moved in and agreed to abide by a the city’s affordable menu stipulation. (Anna Stonehouse / Aspen Times file photo)

Another negotiation with building owners, Andy Hecht and his son Nikos, who also were part of the Cooper Avenue deal, has seen better success in holding prices on the menu at what is now Clark’s Oyster Bar.

A deed restriction was placed on the property in 2015 as a result of a deal struck between City Council and the Hechts.

The Hechts announced in 2011 that they planned to tear down the Hyman Avenue structure where Little Annie’s was. Panic set in throughout the community — and at the council table — that one of Aspen’s oldest bars and restaurants could forever be gone.

City Council gave the Hechts millions of dollars’ worth of breaks on the multi-use building next door in exchange for requiring that the restaurant forever be moderately priced.

The deed restriction reads in part: “Low-priced restaurant means a restaurant offering menu items priced not more expensively, on a relative basis, when compared to other sit-down restaurants in Aspen, Colorado, than the current menu prices. Current menu prices are deemed those prices in the menu in effect at the Little Annie’s Restaurant on September 23, 2015.

“It shall be presumed that the restaurant is not being operated as a low-priced restaurant unless the regular dinner menu submitted to customers on a daily basis contains four entree items of reasonable choices and proportions, including at least one poultry dish and one fish or hamburger dish, whose average price of the four items is not greater than $19 and the regular lunch menu submitted to customers on a daily basis contains four main items of reasonable choices and proportions, including a hamburger meal, whose average price of the four items is not greater than $14.”

Clark’s Oyster Bar, considered an upscale seafood restaurant, has sandwiches on the lunch menu priced at $13 and $15, as well as a happy hour burger for $12 and $9 martinis, along with a shot and beer special for $8. The dinner menu has salads priced at $13 and $15, and a la carte items from $9 to $15.

Been there, not done that

City officials have grappled with preserving or creating a space for locally serving businesses and mom-and-pop shops for well over a decade.

They’ve hired consultants in the past and had dedicated city staff members whose main job was to figure out how to have moderately priced retail and restaurants in town.

But none of the work came to fruition.

A woman walks by the now closed Red Onion in downtown Aspen on Friday, Dec. 18, 2020. (Kelsey Brunner/The Aspen Times)

In 2007, the city had a community-wide wireless keypad voting session to gain public feedback regarding the mix of commercial uses in Aspen.

Also that year city officials contemplated banning developers from converting or remodeling downtown buildings so officials could draft new laws to protect locally serving businesses.

City staff proposed prohibiting certain uses on pedestrian malls, urging elected officials to a make public policy statement that specific stores don’t belong there. Those included exclusive designer and luxury-brand merchandise shops and jewelry stores.

Another concept that was pursued in 2008 but never got any legs was community-owned stores, where residents invest and have ownership in them.

It would have required reaching out to store and building owners to find out their plans for the future so city officials could map out a succession plan for the business and property.

The space would have needed to be secured either through a direct purchase or a land trust model, which involves a private nonprofit corporation that holds the land and provides secured affordable access.

The city government would then purchase the property and offer a reduced rate to a potential business owner as long as he or she agrees to a specific use, like a drug store or another essential need of the community.

But that idea never gained any momentum, either.

Elected officials acknowledged during last week’s retreat that the lack of affordable restaurants creates a void for the community to gather, and retail shopping is out of reach for most worker bees.

“I recognize there are not a whole bunch of tools in the toolbox,” Torre said, “but I think this is an important milestone for our community and how they measure their worth of their community and being in a lived-in community and that’s definitely not going to Cache Cache once a year.”