Wheeler Opera House’s largest revenue source in voters’ hands | AspenTimes.com

Wheeler Opera House’s largest revenue source in voters’ hands

Aspen voters will decide in November whether to renew the Real Estate Transfer Tax that supports the historic Wheeler Opera House. The tax expires Dec. 31, 2019, and voters are being asked to renew it for another 20 years.
Anna Stonehouse/The Aspen Times |

When the real estate transfer tax that helps support the Wheeler Opera House debuted, it was the result of a resolution passed by the Aspen City Council in March 1979 — 90 years after the landmark structure was built in 1889.

The 0.5 percent tax now is decided by Aspen’s electorate, thanks to the Taxpayer Bill of Rights state voters passed in 1992. Better known as TABOR, the law stipulates that voters — not elected officials on government boards — renew existing real estate transfer taxes.

Aspen voters renewed the Wheeler real estate transfer tax in May 1997, and they’re being asked to do it again in November. The tax expires Dec. 31, 2019, and voter approval would extend it through Dec. 31, 2039.

City officials have said the vote is being held three years before its expiration because if it fails they can ask voters again. Should voters reject the Wheeler transfer tax — whether it’s this November or in November 2019 — it could not be brought back, per TABOR rules.

The math is pretty simple when it comes to how much transfer taxes the city collects for its opera house. When the real estate market thrives, so do the Wheeler’s transfer-tax coffers.

The gold-standard year was in 2006, when more than $6 million was rung up in transfer taxes for the Wheeler. Then, as the market plunged with the Great Recession, collections plunged too, dipping below the $3 million mark in 2011.

Last year, which saw $2 billion in real estate sales in Pitkin County, Aspen prospered as well, accounting for $5.4 million collected by the Wheeler. Property transactions this year have fallen well short of last year’s mark; through August, the Wheeler had reaped $1.8 million in transfer taxes.

So in what ways does the real estate transfer tax benefit the Wheeler?

When voters last approved its extension, the real estate transfer tax revenues were to “be used only for the purpose of renovation, reconstruction and maintenance of the Wheeler Opera House and for the purpose of supporting the visual and performing arts.” This year’s ballot question says the money would be “earmarked for the maintenance of the Wheeler Opera House and the support of the visual and performing arts.”

The opera house has gone through a series or renovations and remodels since the RETT took effect, including an overhaul of its basement and ground-level retail spaces in 2011 and an upgrade of its balcony space in 2013.

The Wheeler’s operating fund balance relies on proceeds from the transfer tax. As of Jan. 1, that balance stood at about $29.17 million, according to Pete Strecker, the city’s assistant finance director.

The Wheeler is not solely tax dependent. This year it is projected to generate $744,000 in revenue from event productions, $212,000 in rental income, $290,000 in investment income and $88,500 in loan repayments, Strecker said.

In August, the City Council also approved Wheeler Executive Director Gena Buhler’s supplemental budget request of $265,000 for the Wheeler fund to draw bigger acts to the historic venue.

“The total of the non-(real estate transfer tax) revenue is roughly $1,340,000,” Strecker said in an email to The Aspen Times. “These non-(transfer tax)funds are used to support event productions, facility operations, and art grants. Whatever cannot be covered by these sources is afforded by 0.5 percent (real estate transfer tax) revenues.”

Some Aspen residents offered pro and con views about the upcoming ballot question, including Mike Maple, who is often a stickler over government spending.

Maple noted that the Wheeler’s reserve fund is the city’s largest balance, and also argued that the real estate transfer tax average revenue of $4 million annually doubles its annual operating subsidy.

“Rather than renew the Wheeler (transfer tax) now, three years ahead of the current 2019 expiration and lock in another 20 years of large taxpayer operating subsidies and growing excess fund balances, elected officials should re-evaluate Wheeler operating and other needs and request taxpayer re-authorization of the Wheeler (transfer tax) that is appropriate,” Maple wrote in a Sept. 23 email to city and county election officials.

Those who pay the Wheeler transfer tax are the ones buying real estate in Aspen, whether it’s Mark Hunt gobbling up commercial properties or a monied hedgefunder buying a Victorian-style house in the West End.

“Supporters of the Aspen real estate transfer tax point to the significant support provided to small arts groups and the renovation and maintenance of the historically significant Wheeler Opera House,” wrote economic and tax specialists Amanda Rafool and Scott Mackey in a report for the publication Americans for the Arts. “Furthermore, the burden of the tax is borne by wealthy property owners moving into the city. Finally, the tax helps boost all property values in Aspen by improving the quality of life and making Aspen a more desirable place to live.”

That report was issued in 1998, but still rings true for some Aspenites today.

Steve Tullar, who has lived in Aspen for 22 years, wrote in a pro statement for the transfer tax extension that “I’ve experienced some great moments at the Wheeler Opera House, from concerts to movies to speakers. This year the real estate transfer tax that made it all possible is up for renewal. I’ve seen how money collected has been used to keep the old building in beautiful condition. I’ve also noticed that ticket prices are reasonable compared to other places in Aspen, due to the tax subsidy. I support this tax because it benefits everyone who lives here and enjoys the arts.”

Another advocate of the extension, Aspen resident Thomas Engelman, also touched on the point made by Rafool and Mackey.

“If you live in Aspen, you don’t pay the (Wheeler real estate transfer tax),” he wrote on Sept. 22 to City Clerk Linda Manning. “If you live in an (Aspen-Pitkin County Housing Authority) home, you don’t pay the (transfer tax). It’s also not a recurring tax, it only happens when someone initially buys property.”

rcarroll@aspentimes.com


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