"Hence as a private man has a right to say what wages he will give in his private affairs, so has a community to determine what they will give and grant of their substance for the administration of public affairs." -- Samuel Adams, 1772
THE TAJ MAHAL CITY HALL - DID YA KNOW?
The City of Aspen is well on its way to building a new city hall. Yep, council approved the massive capital project last August. Four of five councilmen prefer a new 52,000 SF building to house municipal employees and government services under one roof as opposed to remodeling and using what we currently have. And yes, they are all set and ready to spend $50 million for the project! Think I'm kidding? I wish. I'm not.
HOW DID WE GET HERE?
Beginning in 2000, city bureaucrats began scheming to build a temple to their own governmental greatness, under the dubious auspices of selling the unwitting (pre-Red Ant) public on the notion that somehow a town of 6,000 would be far better served by a municipal staff that was conveniently housed in-town and under one ginormous 52,000 SF roof. As part of this grand plan, and to put a heavy coat of lipstick on the pig to fool the predominantly anti-development minded citizenry, the manufactured rationale for the Aspen Civic Relocation Project (ACRP, as they call it - I personally prefer "Taj Mahal City Hall" - you decide) included:
- All city services in one location, on city-owned land
- No more leasing office space to house city functions
- Armory (current city hall) returned to its historic configuration and re-purposed for "community use"
- While admitting that the Armory currently DOES comply with life safety and accessibility code provisions, the bureaucrats simply don't think the historic structure "exemplifies" the most current and cutting edge codes, and, you know, everyone around the world is watching Aspen so that they can emulate us!
- Revitalization of Galena Plaza and the creation of a "civic campus"
- More public meeting rooms
- A sustainable, energy efficient building (We should be leaders!!)
- Sounds cool, sexy and green, right? The 52,000 SF "one roof" solution would be located on Galena Plaza (think between the Library and the Courthouse where the ACRA offices are and including the Rio Grande Building)
From about 2006-2014, things related to this aggressive endeavor were relatively quiet - in public. But the wheels were certainly turning! In 2014, council held some outreach sessions and pushed forward with a master plan. By summer 2015, at city staff's direction and as part of its Top 10 Goals for the year, council was quickly down to two choices: 1) remodel and expand the Armory, and re-purpose the ACRA offices and Rio Grande building, OR 2) the Taj Mahal City Hall at Galena Plaza. And how crazy is this: the two choices had the same square footage and very similar costs! How convenient - why re-purpose and re-use when you can build something shiny and new for essentially the same price!?!? How green. Not.
For those of us who have been watching, it's obvious what's gone down. And it's nothing new. With this council in particular, they just can't grasp the concept that the city manager (and thereby, his staff) works for them, not the other way around. As a result, and in possibly the most egregious example of staff making a policy decision and directing council, city manager Steve Barwick and his minions simply put two choices before council and drove the entire agenda.
In late 2015, the city placed a vague "advisory" (non-binding) measure on the ballot. Aspen 2B asked the electorate, "Which use for the Aspen Armory Site (City Hall) do you prefer for a long-range, 50-year plan? Community Use or City Offices (choose one)." To sweeten the deal, the city even told voters, "It's free. There won't be a property tax increase (for a bond to finance the new building)." Of course, in a community that feels undeniably entitled to "free stuff" whenever and wherever it becomes available, "Community Use" prevailed, narrowly, 1044-1021, even when the details of such use were vague at best, especially pertaining to finances. It was hardly a mandate, but the city took the outcome as a big win and a green light from the community for its grandiose plans.
And here is perhaps the most preposterous rationale I've heard from the city in a long, long time. They figured out how to attribute $27 million (yes, 27 MILLION DOLLARS) in "staff efficiency savings" (productivity??) to justify the Taj Mahal City Hall's one-roof concept. Here it is, and I quote: "A 1% in inefficiency for City Staff is $300,000 per year and $9 million over 30 years. 3% is $900,000 per year and $27 million over 30 years. 3% of a 7.5 hour nominal workday is 13.5 minutes. Staff spends a lot of time walking between departments, grabbing a coffee off site, going off-site for meetings and anecdotal discussion, and much more than 15 minutes per day is spent due to departmental distances, finding meeting spaces and grabbing a coffee." (They wrote it, I didn't.) They actually believe that their own staff will be nearly $1 million per year more efficient if they are safely under one roof!?!? All of the anecdotal evidence of the 21st century workplace seems to be marshaled strongly against that. Remember, this is the age of "the Cloud," "GoToMeeting" and Skype! Somehow the city's justification for building a single-building city hall is the argument that staff wanders around too much (while drinking coffee) if they're not all together in the same playpen. Simply indefensible.
This was also perhaps the first time that Aspen citizens who do not regularly concern themselves with civic affairs learned the possibility that Aspen's 22,000 SF city hall was on the table as a potential giveaway. (The issue was also buried amid the furor over the development of a small lodge on Main Street.) And recall, earlier in 2015, council had brazenly "promised" the 7200 SF Old Power House to the Aspen Brewing Company and its rabble-rousing millennial compatriots. As you can imagine, the bureaucrats were ecstatic; this victory at the polls fit perfectly into their rhetoric - when you give away nearly 30,000 SF of public space, surely you "need" more office space -- so why not a new building!!?
The timing of all this excitement came additionally on the heels of the Aspen Art Museum's 2014 move from the city-owned 7200 SF Old Power House, the need for the Aspen Police Department to move out of the Pitkin County Courthouse and in to a proprietary space (another issue entirely, but one - even at 15,000 SF - I wholeheartedly support), the Building & Engineering Departments' need to vacate their (5400 SF) leased space in the former Aspen Daily News building on Hopkins due to the building's sale and impending redevelopment, Mountain Rescue's move from the small city-owned cabin (1000 SF) on Main Street, and the "children's safety" concerns of housing the Special Events and Transportation Departments in the (4400 SF) basement of the city-owned Yellow Brick building in the West End which leases some of its space to a daycare center.
Factor in notable impacts to the commercial real estate landscape in Aspen in recent years brought on by developers such as Mark Hunt and the redevelopment of significant amounts of older commercial real estate, and see just how dramatically the "space" game has changed. Sure, it's always good to study the economics of long-term leases, something the city has never before given a whit about, but nobody could anticipate the amount of city-owned space that would be returned - vacant - to the city in this timeframe.
In this issue, The Red Ant will illustrate how much space the city actually has available and, in so doing, prove just how little more (if any) they need. The lengths they have gone, the exaggerations and misrepresentations put forth, the preposterous and secretive accumulation and use of public funds, the hypocrisy (given the recent "emergency" halting of all land use applications in Aspen's commercial, service/commercial/industrial zones, neighborhood commercial and mixed zone districts), and the ignorance and complicity of 4 of 5 sitting members of city council will simply astound you. (Data point: Bert Myrin is the only one on council who objected to this ridiculous folly. The other four, with their votes in favor, said, "Yes, please.") Of course, I have my opinions on which city departments/services could and should go where, and other respected members of the community have different but equally compelling ideas, but the point of this missive is to inform you of just how badly we've been hoodwinked.
Yes, there is still time to slam the brakes on this thing, but it won't be easy. Time is not on our side. Nor is council. And you can safely bet that the bureaucrats are salivating at the prospect of a new municipal HQ!! Buckle up! Here are the cold, hard facts.
THE 52,000 SF NUMBER
City propaganda cites an unusual (for them) statistic: the square footage for the Taj Mahal City Hall does NOT include increased office sizes for employees!! It claims to reduce work space by 1100 SF. The overall monolith will offer more public amenities (Aspen code word for "free stuff," I suppose) such as public meeting rooms and "shared program spaces" (whatever these are). The plus-up of square footage is a mere 3300 SF. Amazing what you can get for $50 million in Aspen these days!
How big is 52,000 SF, you ask? To get your head around the Taj Mahal City Hall, the space approximates that of the following:
- The White House (54,000 SF)
- The playing portion - without end zones - of an NFL football field (360' x 160' = 57,000 SF)
- More than one acre of land (43,000 SF)
- 2x The Wheeler Opera House (30,000 SF)
- 2x Whole Foods in Basalt (30,000 SF)
- Half the size of the Hotel Jerome (113,000 SF)
THESE PROPERTIES HOUSE THESE CITY OFFICES TODAY: A TOTAL OF 47,000SF
- City Hall at The Armory - (city owned) 22,000 SF
- Rio Grande Building levels 2 & 3 (city owned) 5400 SF
- Canary Initiative and Asset Management Depts at the former Mountain Rescue Cabin (city owned) 1000 SF
- Parking Dept in the TBD SF orange house at 540 E. Main St (city owned)
- Special Events & Transportation Departments at Yellow Brick basement (city owned) 4400 SF
- Building & Engineering Depts at former Aspen Daily News Building basement (leased) 5400 SF
- APCHA (housing) offices at Park Central West (leased) 1800 SF
- Police Dept in Pitkin County Courthouse basement (shared with PitCo Sheriff) ~TBD SF
- ACRA Building (shared with Stay Aspen Snowmass) 4500 SF
THESE CITY OFFICES ARE SOON TO RELOCATE, REGARDLESS
- APCHA (housing) office: vacating a 1800 SF lease
- Parking Dept: TBD SF orange house at 540 E. Main St being redeveloped for new Aspen Police Dept
- Building & Engineering Dept: vacating 5400 SF lease in ADN building due to redevelopment
- Special Events Dept: vacating 2900 SF in Yellow Brick basement due to "children's safety concerns"
- Transportation Dept: vacating 1500 SF in Yellow Brick basement due to "children's safety concerns"
- Aspen Police Department must vacate County Courthouse basement TBD SF
TOTAL city office space "relocating" due to displacement or safety: ~12,000++ SF
Ugly note: The parking department's office space "needs" are cited as 5200 SF. As part of their "space accounting," they, like most other departments, made sure to include all of the storage space they need. And, they notably included the square footage of the toll booth at the parking garage!! Yep, even though this tiny (~30 SF) space won't be affected in the least by any of the potential development, the parking department threw in the nominal square footage just to make sure they get "what's theirs"!!! Imagine what the other city departments did!!
CITY-OWNED SPACE NOT BEING CONSIDERED FOR OFFICE USE
- Historic Victorian on 540 E. Main Street parcel: being "preserved" for "interpretive use" 1600 SF
- Rio Grande Building level 1: leased to Taster's Pizza 1000 SF
- Old Power House: currently "promised" to Aspen Brewing Company and other entities 7200 SF
- Mountain Rescue Cabin: it is more than a 2 min walk of parking garage 1000 SF
- Basement at the Yellow Brick due to "children's safety" concerns 4400 SF
TOTAL city-owned space not being considered when space is so desperately needed: ~15,000 SF
CITY-OWNED SPACES WITHIN A 2 MIN WALK OF PARKING GARAGE (THINK: CAMPUS)
- Rio Grande Building levels 2 & 3: 5400 SF includes Rio Grande Room (public meeting space), currently being used by Library construction crew until June 2016
- Armory: who knew that 1900 SF of this valuable and crowded space was being used by COUNTY community development personnel? They're leaving. 22,000 SF
- ACRA offices: currently shared with Stay Aspen Snowmass 4500 SF
TOTAL "no build" city-owned space within a 2 minute walk of the parking garage: ~31,000 SF
CITY SPACE EXPANSION OPPORTUNITIES WITHIN A 2 MIN WALK OF PARKING GARAGE
- 9800 SF building earmarked for subsidized housing on the 540 E. Main Street parcel could easily become office space
- Armory expansion (10,800 SF) into space east of the building
TOTAL expansion opportunities within a 2 minute walk of the parking garage: ~20,000 SF
Add it all up? We're talking ~66,000 SF. You could even eliminate the unpopular 10,800 SF expansion of the Armory and you still have ~55,000 SF. See what I'm talking about!?
*For ease of reading, (not that it is particularly easy), I took the artistic liberty of rounding the numbers. You can just imagine how forthcoming the city was with details such as these, and several of us have been tracking down these figures for months. For matters of this issue, the rounded numbers and conservative estimates in no way materially affect my argument. They just make it easier to read. A little.
WHAT COULD BE PURCHASED WITHIN A 2 MIN WALK OF PARKING GARAGE?
Given what's available (see above), it's hard to imagine that we'd need to purchase much, if anything. However, if we did need some more space, it would make sense to buy it (and buy in close proximity to the other city office spaces) if the premise of this whole exercise is to eliminate leases and create a campus of sorts. But, given the city's abysmal track record with property purchases (think: BMC lumberyard), each potential purchase scenario should be thoroughly and publicly vetted and analyzed by a real estate professional, or six. Here is what is being kicked around:
- 4800 SF for Building & Engineering Departments at The Mill (behind Hotel Jerome): $5 million
- TBD space at the corner of Galena & Main to free up the city-owned 4500 SF ACRA space and place the chamber in a far more visible/useful/accessible location: $5.25 million
TOTAL useful space the city could purchase within a 2 minute walk of the parking garage: ~7000+ SF
And note: With a value-based real estate purchase, long term options obviously include resale and leasing opportunities. Besides, when purchasing, tenant finish expenditures are not inherently thrown away.
WHY IS THE CITY SOON TO LEASE A SPACE FOR BUILDING & ENGINEERING?
Interesting that I'd include potential "purchase" options in this analysis, huh? Well, what no one else will tell you is that even with the 52,000 SF, $50 million Taj Mahal City Hall moving forward, the city still needs more space! In fact, they're thiiiiiiiiis close to signing a lease (yes, a dreaded lease!!) for at least $55/SF plus $300/SF in tenant improvements on a 4800 SF space in The Mill, the redeveloped office building behind the Hotel Jerome. Yes, that math works out to be (and again, I'm conservatively rounding) $264,000/yr of taxpayer money in rent PLUS over $1.4 million in tenant finishes that the city will never recoup. Did someone just flush a toilet??
Without burying you in elaborate financial detail, here is a quick and dirty lease vs own analysis (no net present value, nothing sophisticated, just a forward-looking comparison of costs and asset values):
- Leasing 4800 SF at $55/SF is $264,000 a year. Purchasing same 4800 SF at $5 million (with debt service at 3.5% for 20 years, 100% financed, 6% closing costs) is $373,000.
- Five year lease cost is $1.32 million. Five year debt service cost is $1.865 million.
- Tenant improvements are $1.4 million in either case.
- Estimated net asset value of the leased space at the end of 5 years is $0. Estimated net asset value of the purchased space after 5 years is $5.2 million (assuming 1% growth in value over the first 5-year ownership period).
- Here's the net impact: 5 year financial cost of leasing the space is $2.7 million down the drain. Five year financial benefit of purchasing is $1.9 million. (If the city purchases the space, even after debt service on a 20-year mortgage and the same $1.4 million tenant improvement costs, the city has a net financial gain of at least $1.9 million after 5 years because it owns an asset worth $5 million.)
So, that's about a $4.5 million swing in value to the city between leasing and purchasing. And they're leasing ... Go figure.
A SOLUTION: ONE 9800 SF RE-PURPOSED NEW BUILDING SOLVES IT
Yes, there is a straightforward solution to this. Take the Armory (22,000SF) + ACRA offices (4500 SF) + Rio Grande Building levels 2 & 3 (5400 SF) + the Old Power House (7200SF) + the Yellow Brick basement for in-town storage needs (4400 SF), and develop the planned 9800 SF building on the 540 E. Main St parcel into an office building, not housing. Do the math. See, you're right there at ~$53,000. No Taj Mahal needed. And maybe no "purchase option," either.
Sad about converting the 9800 SF building behind the new police station earmarked for subsidized housing to much-needed office space? Get over it. Remember the 1000 SF cabin on W. Main Street vacated by Mountain Rescue? Bingo. Build subsidized housing there on that lot, if you must. Ten or twelve in-town units a few blocks away are still 10 or 12 units.
HOW ABOUT THE $50 MILLION UNDER BARWICK'S MATTRESS?
The Red Ant always says, "Follow the money." Well, brace yourselves for what I've found. (I know, sometimes the numbers get "boring".... But that's what city staff counts on council to think too. C'mon, you're better than that. I've tried to make it easy. Besides, it's YOUR money!!)
The city tracks capital projects by project number. If you ever want to know the total amount spent on a capital project in the city, no matter how many years it has been in progress, this number is your key.
For this analysis, three project numbers are critical:
- 91-955144: (Master Planning/Facility Development) According to the city's February 2016 capital project report, the city has spent about $400K on this project since 2014, and plans to spend the remaining $38K of its $438K total project budget, ostensibly to develop the implementation plan for the now-proposed Taj Mahal City Hall and the new police station.
- 91-95325: (Building Replacement /new Aspen Police Dept) The new cop shop has a total project cost of $13,172,000 of which the city has spent a little over $1 million so far.
- 91-95145: (Aspen Building Replacement Project - City): This is the Taj Mahal. Through February of this year, the city has already spent over $2.5 million on this project -- $1.054 million in 2015 and a whopping $1.57 million so far in 2016, according to the city's detailed financial reports available on its website.
So to take stock, between these three projects, through February of 2016, the city has already spent almost $4 million on its new APD and the Taj Mahal City Hall, and that's just the beginning.
NO BUDGET FOR THE TAJ: While the city's capital projects report, a 40-page description of every capital project under way in the city from the Wheeler Opera House to the water utility, includes $3.898 million for, I assume, pre-construction costs of the Taj Mahal City Hall -- all of that money was included in 2015's budget resolution which has now lapsed. The 2016 budget resolution approved by Council last fall includes exactly $0 (ZERO DOLLARS) in budget authority for the Taj Mahal City Hall.
Why is this important? Because cities must budget annually for their capital improvement costs! If you don't budget for a project, you don't have to explain where the money is coming from to pay for it.
This "no budget authority" clearly did not stop Barwick and his minions from spending almost $1.6 million on the project in the first two months of the year. How does city council permit staff to spend this kind of money on a project that it did not even budget for, and one that is still at least a year away from breaking ground? (The city has yet to even file a land use application for the project!!!)
Legally, the city IS in compliance with state law because it budgets at the fund rather than the project level, and the city's capital project fund contains sufficient unused budget authority from other projects to absorb the year-to-date costs of on the unbudgeted Taj Mahal City Hall project. But it is emblematic of a lack of spending control endemic to city capital projects over the years. Does anybody remember the Burlingame subsidized housing project fiasco???? (While technically "legal," this is VERY POOR budgeting. The city's capital projects report treats the project as if it has budget authority even though it does not. In Colorado, you cannot adopt multi-year budgets for capital projects, therefore you must re-authorize funding annually. What Aspen is doing provides an opportunity for the city to piecemeal big projects and, in so doing, never show the public what the entire budget is in the annual budget resolutions.)
Where DOES all that money come from anyway? The financing plan for the Taj Mahal City Hall remains undisclosed. You see, when you don't budget for your single largest capital project, you don't have to disclose how you are going to pay for it!!
And because there is no 2016 budget for the Taj Mahal City Hall, there is no funding plan. But you can bet that paying for this monstrosity will involve massive transfers from the city's water, electric, parks and recreation, and other operating funds, and yes, maybe even that cash cow, the Wheeler Opera House fund. Each of these funds operates as a separate enterprise or special purpose operation of the city. That is, until the city needs its money!!
A lot of cash is about to change hands within city hall so the bureaucrats can have their Taj Mahal and not be subject to a TABOR-required public vote. How much and where from remain a mystery. But through the mystique of inter-fund transfers, voila! The money will magically appear as if from under city manager Steve Barwick's multi-million dollar mattress.
Overall, at the end of February 2016, according to its month-end financial report, the city of Aspen had over $130 million in cash and invested assets under management. These assets make up the combined fund balances of all the city's different funds. A great portion of that money is about to be re-allocated to the Taj Mahal.
Dontcha think, even for a minute, that maybe, just maybe, the right thing might be to hold a public vote to approve this massive expenditure of taxpayer dollars, especially in an environment where money is desperately needed elsewhere in our community: schools, mental health -- just to name two??? No, it's not required. But council sure could make it happen. Just sayin'.
WHY THE NEW COP SHOP IS OK
After years of sharing tiny basement space in the Pitkin County Courthouse with the sheriff's department, the Aspen Police Department desperately needs its own space. The cramped quarters and obscene lack of privacy is outdated and unacceptable given modern law enforcement standards. This has been a long time coming and should be viewed as completely separate from the Taj Mahal City Hall debacle, despite both its proximity and its timing.
Council approved the new cop shop in August 2015 and the city has already submitted a land use application for the 15,000 SF facility. Recall, the parcel at 540 E. Main Street was originally acquired for the purpose of essential municipal use. (Initially, the fire department looked into it but opted to redevelop their Hopkins Avenue location.) With the new 15,000 SF, the community gains a multi-purpose room for community meetings, trainings and emergency/special incident management. And yes, unfortunately, we occasionally have incidents that warrant such use. The proprietary space for the Aspen Police Department will additionally be a huge improvement in maintaining the dignity and privacy of those who "visit" the APD.
This $13 million train has already left the station. It was going to happen regardless of the Armory or Galena decision. Embrace it.
WHAT YOU CAN DO
Knowledge is power, folks. And too few people know about this.
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