Milias: The case for pausing the Lumberyard
The Red Ant
The Aspen City Council will meet on Tuesday to memorialize the development entitlements for the Lumberyard — a 277-unit, 467-bedroom subsidized-housing project on 10 acres just east of the ABC. These entitlements, if approved, will effectively green-light the project.
As the new council differentiates itself from the prior 5-0 echo-chamber, the first reading of an ordinance presents a great opportunity to probe staff while leaving room for changes. In the past, first readings were simply a formality, followed by a later second reading in which each member made a gratuitous comment about staff’s proposed legislation before voting to approve it.
The Lumberyard, despite its slick drawings, is not at all ready for prime time and should not advance to second reading. More work needs to be done.
Here are six reasons for council to push the pause button:
There is no goal other than “more,” and this will not take pressure off the system. “More” is not a “release valve” that addresses the community’s actual workforce needs. The city prioritizes “essential workers” in its proprietary housing. Will we prioritize teachers, nurses, first responders, bus drivers, snow-plow drivers, bartenders, and housekeepers? What about retirees willing to downsize? Where is that policy? Will there be options for the Latino community, and can employers purchase units?
Adding more units to a broken system won’t change a thing. Building more and “figuring it out later” has gotten us exactly where we are today.
There is no funding mechanism in place. Land for the project was purchased with nearly $30 million in RETT money. However, there is no financial plan for construction despite cost estimates approaching $500 million. A general obligation bond won’t pass muster with Aspen voters. More costly Certificates of Participation would bypass them, but this precludes ownership units.
Declining RETT ($21 million in 2022, down 19% from 2021, and already down 40% YTD in 2023) and STR tax collections (projected $6 million a year) aren’t but drops in the bucket.
Only unqualified bureaucrats with bags of Monopoly money could advance this project past the idea stage without a defined goal and sound financial pro forma.
A Public Private Partnership (PPP) sounds nice, but the numbers don’t work. PPP has become the latest funding idea, and city staff hopes council likes the sound of it. (Most don’t understand the business of development.) APCHA sales prices wouldn’t put a dent in the construction costs or deliver a profit to the developer, so the project would have to be all rental. Simple math: 277 rental units at $2,500/month average (which is high) yields $8.3 million a year. A development cost of $500 million at 5% return is $25 million to cover the interest cost on the debt. (It’s probably closer now to 10% and $50 million.) The city would have an ongoing subsidy of $16.7 (or $41.5) million simply to cover the annual debt service. It just doesn’t pencil.
277 units doesn’t even offset expiring deed restrictions. In coming years, 79 ownership and 244 rental units would revert to the free market unless the city intervenes. Oughtn’t we save what we already have instead of building fewer new units? This certainly won’t cost half a billion dollars.
“Build now or costs will only go up” is not a reason to move forward. Look what happened with the Snowmass Village transit center. They spent a lot of money but stopped when the community pushed back. It’s OK to pause in order to get it right. The Taj Mahal City Hall was similarly rushed, and look at that travesty. (We’ll never know its true costs.) What’s best for the community is the only thing that matters, and that starts with a viable and responsible financial plan.
The Lumberyard must be part of a larger Entrance to Aspen master plan. The Highway 82 corridor in the upper valley links multiple major upcoming civic projects. We are expanding the park-and-ride intercept lot at Brush Creek Road. The airport is facing a major overhaul and terminal expansion. The ABC has become an Aspen suburb yet lacks proper infrastructure like sidewalks,
The Lumberyard necessitates a new traffic light, and the Castle Creek Bridge is nearing the end of its lifespan. These projects must be considered together as part of a formal, integrated master plan rather than developed individually.
In the absence of hearing “no,” city staff hears “yes.” Their goal is to politically neutralize the City Council by pushing them to go along with existing plans because of how much has gone into these so far. When things go sideways, the co-opted electeds then can’t distance themselves from the project or their ill-informed predecessors who started us down this path.
To entitle the Lumberyard now only ensures that this incomplete, ill-conceived, and fiscally-irresponsible project moves forward at enormous uncertain cost to the community. We all know the city loves to play developer, as opposed to fixing what it already has, and there’s no going back once they demolish the revenue-generating lumberyard and mini storage and install the horizontal infrastructure.
Just because the drawings are done, the Lumberyard project is far from ready. Hit the pause button.
Pretty construction drawings are not development plans. Contact TheRedAntEM@comcast.net.