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ISSUE # 104: With Minimal Oversight, City Hall GallivANTs Along

"Politicians are the same all over. They promise to build a bridge even where there is no river."                -- Nikita Khrushchev



Always with an eye on squeezing the free market homeowner, the latest shot over the bow is whether or not to charge non-resident homeowners more for development. As the city embarks on a (highly biased) $33,000 study designed to give the city a hard number that defines how much employee generation there is per square foot of development, Mayor Skadron recently pointed out that "all single family homes are not necessarily created equal." His point is that one must take into account the actual occupants of each household. In some cases, for example, the (presumably local) resident is the gardener, the housekeeper and takes out his own trash. In this instance, he and several locals argue, there are zero employees generated. Similarly, if a homeowner builds a house for his children so that they can stay in Aspen to live and work, the children should not be counted as employees generated because they're already employees here. Good points. But the bigger picture is being entirely ignored.

The housing mitigation fee is actually the double taxation of private property owners. Each real estate transaction in Pitkin County comes with a 1.5% Real Estate Transfer Tax (the RETT). Two-thirds of these funds (1%) collected by the RETT already go directly toward subsidized housing. Upon purchasing private property, owners have already "mitigated" for subsidized housing! Furthermore, at the current rate, Aspen's subsidized housing fund brings in over $1.2 million per year from sales tax, $5 million per year from the RETT, and hundreds of thousands of dollars from cash-in-lieu fees and investment earnings. According to the 2013 city budget, after completing Burlingame 2 and 3, and paying for APCHA operations, the subsidized housing fund will have over $41 million in fund balance at the end of 2022. Really. How much is enough?!

Why is it that raising money for more subsidized housing mitigation at every turn is the government's never-ending priority? The truth is, our elected leadership refuses to ask itself this exact question. While they commission ridiculous studies on the public dime, they ignore the greater issue at hand: With 2800 (and growing) subsidized housing units in our portfolio, who on earth are we building all these new units for? Where are all these new jobs coming from?

It is my belief that ALL members of this community create "impacts" and should share in the costs equitably. (Did you know that the sale of subsidized housing is not subject to the RETT? These folks get the benefit of the RETT but don't pay their fair share into it.) Subsidized housing mitigation fees for development are simply punitive, designed to "punish" those in our community who are not on the public dole. Until proven otherwise, I am convinced that we have more than enough subsidized housing and what we really need to work on is creating jobs for those we already house. We should be GRATEFUL for job generation, however I seriously doubt that development and redevelopment is the source of job growth! In fact, it's very hard to imagine dramatic job growth in our community in the foreseeable future.

There are several steps that the city should take in the immediate term while this issue is being reviewed:

  • The obvious one: conduct a THOROUGH AND DETAILED subsidized housing audit that outlines every single unit in our inventory, its ownership, its tenancy, and confirm ownership qualification and compliance. Let's find out who our subsidized housing residents are and where they're working. It's public housing -- this should be public information. A mandatory audit alone will surely shake out some chaff and free up some inventory.
  • Design an incentive program for subsidized housing residents to sell their units. There are many residents who are "stuck" here, realizing that their subsidized housing purchase many years ago was not exactly the best retirement savings plan after all. Imagine a $25,000 "bonus" for selling one's unit. For $1 million in incentive dollars, we could quickly "recoup" 40 units into inventory to rent or sell. We sure as heck can't build 40 units for that!
  • Provide the public with a detailed report on the city's presumption of job growth, in what industries and by which employers. I question the presumption of a never-ending demand for subsidized housing by qualified individuals. Furthermore, should we be on the hook to build subsidized housing for anyone and everyone who wants it just because they pass through the pearly gates on Hwy 82?
  • Suspend subsidized housing mitigation fees until a determination is made whether or not subsidized housing mitigation is double-taxation. This is a critical issue to resolve - and one that will continue to be divisive for the community until it is. 

The Red Ant does NOT advocate different rules for local private property owners vs second homeowners. More divisiveness is never the answer. I have enormous empathy for the working locals whose free market property purchases are turning out to be resale nightmares because of the punitive mitigation fees for new buyers anxious to redevelop. There are many examples that have been made public, however, the answer lies with a greater solution, not carve-outs for locals. And once again, it comes back to the unintended consequences of a subsidized housing program run amok. It's true, some locals in our subsidized housing program have amassed savings, drive luxury cars and own private property elsewhere, while their free-market property owning colleagues have built equity in their investments but are hamstrung in their efforts to sell based on the city's mitigation fees. This is not right.

At a certain point, enough is enough. We DO NOT NEED more subsidized housing. We need to manage and maintain what we have.


Residents of the beleaguered homeowners association have formally asked for help to repair their very damaged structures - to the tune of $3.24 million. Thankfully, in a joint meeting between council and the county commissioners, it was agreed that no public dollars should be spent on the fix. At issue is the HOA's claim that their buildings were defective from the start, and the water damage, structural issues, siding problems, etc. are not the owner's fault therefore not their financial responsibility. The Red Ant has written about this over the years, and I wholeheartedly agree that not one red cent of public funds should be expended. This is a proven issue of subsidized housing gone wild. When residents do not understand the responsibilities of home ownership, specifically "preventative maintenance," buildings do not take care of themselves. While the local governments consider a low-interest loan and other solutions for Centennial, the precedent-setting final determination on how to fund the huge costs of massive repairs will serve as either a huge warning or big relief to other subsidized housing owners.

A recent letter to the editor from Sam Brown who developed Centennial over 30 years ago spells the issue out better than I ever could. It's entitled "Centennial homeowners made their own beds":

"I want to point out for about the ten-thousandth time that the Centennial rental buildings were built approximately 30 years ago at the same time as the homeowners' buildings, using the same drawings from the same world-class Canadian architect, the same first-class engineer, the same standing-seam metal roofs and the same highest quality redwood siding.
The rental buildings have exactly none of the problems the homeowners have. This is not an accident. Any homeowner who spends nothing on external maintenance for 30 years will have serious problems. 
Any homeowner who, moreover, adds on porches where none were intended and violates the basic structure of the building will have even more problems.
In order to solve a problem it must be accurately understood. And the debate at council suggests that no one does.
At the Centennial rental apartments, we pride ourselves on providing the highest quality housing at affordable prices without seeking public subsidy."

Taking care of our subsidized housing inventory is something that seems to escape the city bureaucrats who clamor for each and every opportunity to simply build more new units. The "resolution" of the Centennial issue will set a course; whether it's one of responsible home ownership or a glorified rental/ dorm/frat house scenario is yet to be seen.


As council deliberates how to encourage existing condo and lodge properties to renovate in an effort to increase and improve the local tourist bed base, some tweaks to existing rules are being revisited. One "tweak" should be the abolition of the rule that requires the owners of any condo property that has ever housed working residents to provide replacement affordable housing if it is torn down or removed from the rental pool. Again, this punitive rule was designed to prevent private property owners from fixing up a rental unit and keeping it for themselves as a second residence or combining adjacent condo units, because it is believed that such projects would displace local workers. Staff currently has two proposed options for owners in this predicament: an exemption for the unit if the owner agrees to keep the condo in the short-term rental pool, or require mitigation only for units rented to a local worker in the past 10 years. Despite 2800+ units in our subsidized housing inventory, the city simply cannot let this one go!

If you rent to a local worker, your condo is marked. But now you know.


I hate nothing more than having to say, I told ya so. But I did. The hydro plant is not going away. Lazy and incompetent city manager Steve Barwick's water weasels came before council last month and told a bald-faced lie. They said that if the federal permit was not renewed, the project would be killed, and the city would open itself up to outside competition for the completion of the project. (As if any fool would take on such an outright financial and environmental disaster!?) They said they needed $8K to maintain a federal preliminary permit that would allow hydropower to remain an energy option for Castle and Maroon Creeks. LIE. The March 1 submission is really not a "keep our options open" move as council was led to believe. It is actually a very clear statement of intent to build the hydro plant, including a report on the last 6 months' of activity and a submission of a "completion of administrative record." No future options would have been off the table without this renewal, however four council members bit, fully believing staff that this was not a go-ahead for the project, rather a place-holder for future consideration. Adam Frisch listened to the outside experts and saw through the BS, however his lone "nay" was not enough to sway the outcome.

The next issue in the hydro plant saga will be the receipt of a $90K study by the National Renewable Energy Laboratory (NREL) that will give the city a list of green power options that could possibly supplant a hydro facility. (Recall that the city of Aspen has a goal of 100% renewable energy by 2015, despite this never having been approved by the voters. Green at any cost, folks!) It is widely expected, however, that the NREL report will include hydro as an option. The city will likely see this as the "green" light they need to proceed.

The hydro fight looks to be heating up yet again. Remember the petition effort in early 2012? And the "No" vote? In defiance of the voters, council appears to be poised to move ahead regardless. And how ironic: the hydro plant is an anathema to the city's own "Canary Initiative" because all studies show declining stream flows as a result of climate change. Why then take MORE water out of our streams? Last time, it was only an advisory vote. If we have to fight them again, we will. Stand by. I will let you know how you can help!


The development controversy du jour is over the proposed remodel of Hotel Aspen on Main Street. "Incentives for updating Aspen's affordable small lodges" to maintain and enhance our shrinking bed base is a top priority for city council. But sadly, this group doesn't entirely understand that incentives will mean giving something to get something else. Hotel Aspen's owners are looking to redevelop most of the hotel's site, increasing the hotel's rooms from 45 to 54. But they want to develop three free market townhouses on the property as the economic engine for financing the project. On one hand, the townhomes exceed the city's residential zoning limits and would require several variances. On the other hand, the request is in line with the city's program to encourage hotel redevelopment through offering greater residential development allowances. Council is evenly split on the approval - Romero and Frisch for, Daily and Skadron against. (Ann Mullins has recused herself because of her prior role on the Historic Preservation Commission where she reviewed the application.) Thus far, the owners are still working to tweak their plans to make the proposal work, but Daily and Skadron (not to mention the historic hysterics who never want a single thing to change) vehemently oppose the townhomes due to their 3-story size. How much longer will the owners play ball? No one knows. But should the deal go away and another office building be built on the site, we'll know who to blame.

(Notably, and illustrative of the pickle they find themselves in, council is concurrently working to write Aspen's lodging ordinance. One of the issues that they cautiously support on a case-by-case basis is allowing for 4-story lodges within city limits.)


Mayor Mick has a column in the Aspen Daily News. Yep, every other Monday. I've read his first few installments and can't really tell you what his points are, other than he's still angry, he's obsessed with providing subsidized housing to anyone who breathes, and he's doing his part to incite the already-terrible class warfare issues in this community. Swell. Spare yourselves....


Time is running out. Print THIS form and get your $50 food tax refund today. Deadline is April 15.  Questions?  Call the city finance department 970-920-5040.



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