Elizabeth Milias: The City’s disturbing pattern of feathering its own nest
The Red Ant
In addition to its proprietary employee housing program, the city of Aspen has a long history of slippery housing deals.
In 2007, in a special exception to its own housing policy, the city gave former public works director Phil Overeynder and his wife housing in Aspen for life. Overeynder had attempted to resign to take a better paying job elsewhere, but disgraced former city manager Steve Barwick made “a simple business decision” and offered up the city-owned house on the Marolt Open Space until the latter of the Overeynders passes away, in exchange for five years of Phil’s full-time work and five more on a part-time basis.
According to Barwick at the time, “The upside of having Phil for 10 years far outweighs the cost of dedicating housing to him.”
Today, the Overeynders enjoy their retirement in the 1,900-square0foot ranchette for $1,850 a month, which includes plowing the long driveway at city expense. This property is part of the city’s vast proprietary housing portfolio for its own employees known as the 505 Fund, which receives its funding from city departments as well as “additional funding from other city income sources,” widely believed to be excess revenue from exorbitantly high building department fees and other overages.
The same year, in an effort to avoid costly litigation following a protracted battle over the likely “involuntary historic designation” of an unhistoric property, the city purchased a 1954-era, pre-fabricated Swiss chalet-style kit house at 312 W. Hyman from its owner for $3.5 million, the same amount the owner had a contract to sell it for before the city intimidated the buyer. The city’s “detrimental interference” destroyed the private and valuable deal, and in so doing, devalued the property. To make good, city council agreed to purchase the 1,536-square-foot house on a 6,000-square-foot lot, designate it historic, and redevelop it into subsidized housing.
This time using money from the city’s 150 Fund (funded by the 1% RETT, a portion of a 0.45% sales tax and development fees that are dedicated to providing subsidized housing for the community as a whole), the plan had been to redevelop the house and add two carriage houses on the large lot to create four housing units. But no due diligence was done on the property prior to the sale and, in the end, the lot could not be practically configured to the city’s plans, and the massive expense of bringing the existing house up to code exceeded the city’s appetite. Instead, they rented it back to the seller while the property value plummeted amid the economic downturn. For years now, this historically designated, city-owned faux chalet has remained a rental while its value today is over $3.9 million.
Uniquely, 312 W. Hyman was purchased with 150 Fund dollars, dedicated to developing housing for the community, and not the city’s special 505 Fund. So why is it that the new assistant city manager gets to live there and not an APCHA-qualified employee who wins it in the housing lottery? Money from the 150 Fund is also currently being spent to extensively remodel this aging property. As recently as last month, a bill for $120,000 was paid to replace its failing water and waste lines. Regardless of the legalities, the optics are very, very bad at a time when council is lamenting the “finite” amount of money in the 150 Fund as it plans to develop Burlingame 3 and the Lumberyard. To threaten a vacancy tax to pad the 150 Fund coffers while buying and maintaining this nearly $4 million house at a financial loss demonstrates extremely poor stewardship of community housing dollars.
But worst of all is the city’s answer to housing mitigation for its own development projects. Ask any developer and you’ll learn that the city’s strict growth management policies ensure that all development and redevelopment projects provide housing mitigation for the impacts created. But not the city of Aspen. Instead, the city, using its 505 Fund, has been building housing for its own employees for many years, including units at the ABC, Burlingame 2, Cemetery Lane, Truscott Place, Water Place and the new Police Station. When massive new city development occurs, such as the 37,000-square-foot Taj Mahal City Hall, the city provides zero new subsidized housing units in mitigation, despite being required to do so at the same rate as private developers. Instead, the city points to the housing it has already built in the past and counts this!
While the city continually collects taxes for subsidized housing, it should use those monies to create actual housing, not credit. Furthermore, the Taj Mahal City Hall is being built with public tax dollars and should mitigate with new physical units that are available to all, not just city employees. Using credit from past housing construction is effectively “double dipping,” and it directly shorts the community’s housing program.
The city should set the best example. But no; on one hand, it oversees our local housing program, yet on the other, it grants itself special exemptions that exacerbate rather than address our housing challenges.
When the city is the worst offender, how can we expect yet alone require private developers to properly mitigate? Contact TheRedAntEM@comcast.net
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