‘Secret’ agreement is key to Aspen hotel trial
The future of a local Aspen boutique hotel hinges on an alleged agreement between the hotel’s owner and the building’s owner in 2006.
That’s according to opening arguments Tuesday in the eviction trial of The Residence Hotel owner Terry Butler, who also lives in the hotel. A trust that owns the building is trying to kick her out because she allegedly didn’t pay enough in rent, property taxes and insurance during the nearly 20 years she has run the downtown hotel.
John Case, attorney for the James E. Cox Living Trust, told the jury of five women and two men that Butler made up the 2006 “secret 30-year agreement” with the elderly owner of the building, James Cox. As proof, Case said that during repeated negotiations in 2014, Butler never brought up the agreement, in which she claims Cox capped her rent at $11,658 a month and told her she didn’t have to pay taxes and insurance.
Case said Butler didn’t bring up the deal in any form until two months ago during her deposition for the eviction trial.
“Such a deal would be worth millions of dollars,” Case said. “There’s ample evidence that she made it up.”
Lucas Van Arsdale, Butler’s lawyer, called the 2006 agreement “the key to the case.” He said the agreement came about after Butler received an offer in 2006 to sell the hotel for $6.2 million.
Butler was at retirement age and wanted to take the offer and never have to work again, Van Arsdale said. Cox, however, liked and trusted Butler and didn’t want her to sell, he said.
“He told her, ‘I’ll stabilize your rent if you don’t sell,’” Van Arsdale told the jury. “She walked away from the offer.”
After that, Butler’s rent never went up, and Cox repeatedly told the property manager “to leave Terry alone,” he said. However, she never got the agreement in writing.
Butler first moved into an apartment in the Aspen Block Building on South Galena Street in 1986, when the eight apartments on the second floor were occupied by drug dealers and other shady residents, Van Arsdale said.
“The building was kind of a dump,” he said.
Butler acquired the leases to all the apartments in 1996 and poured money into fixing up the building. She renovated one room at a time until it became “a Victorian palace,” Van Arsdale said.
Cox agreed to give Butler a 30-year lease on the property, which would renew every five years, so that she could recoup her investment. The lease agreement was later extended another 10 years.
Cox died July 29, 2014. Trustees who took over the trust then sent Butler a letter saying she owed them $536,000 in back rent, which was eventually lowered to $237,000 when the statute of limitations was applied, Case said. They also wanted to raise her rent to $16,858 a month, he said.
Butler did not like that and later filed suit, alleging that the trust was trying to push her out. That lawsuit is still pending.
The trust counter-sued with the eviction suit, which jurors will decide this week. The trial is expected to last until Friday.
The Aspen Block Building was built in 1886 and served as a brothel for miners during Aspen’s silver mining boom.
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