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ISSUE #124: DefiANT - Last Stand at the Old Power House  6/7/2016

"If you're going to make a desperate, hopeless act of defiance you should make it a good one." 

-- Ann Leckie


*** Apologies in advance for the technical layout of this issue.  I'm on the road and having challenges with a borrowed computer that is not cooperating!  ***

The issue of the day is whether Aspen's city council will allow a selected but non-compliant tenant to sign a lease for the city-owned Old Power House, formerly home to the Aspen Art Museum, on terms dictated by and wildly favorable to said tenant.

Formerly the city's power plant, the Old Power House (as it is known today) was long the home of the Aspen Art Museum until 2014 when the Museum moved to its new in-town digs.

In the fall of 2014, the city appointed a "citizens committee" to process and vet proposals from various local non-profits interested in leasing the 7200 sf space.  Finalists included the Aspen Science Center, the Red Brick Performing Arts Center, Grassroots TV and a John Denver museum. 

Ignoring the recommendations of the citizens committee, council booted the John Denver museum concept and added in Paul Kienast's Gathering Place and the proudly for-profit collaboration called "Aspen Power Plant" (APP), which promised to utilize the building with a brewery and biergarten, tv station, shared workspace and special event company.  In a March 2015 4-1 vote, council selected the APP for tenancy of the OPH.  HERE is the link to the APP's winning proposal.  In short, if you don't wish to read it, here are some telling tidbits:

"A full-service food and beverage operator committed to local craft and powering creative thought for workers, recreators  and revelers morning noon and night."

"A food and beverage operator with a showpiece brewing system, commercial kitchen and old world inspired biergarten"

The APP "will host countless community gatherings throughout the year" in "the atmosphere of a lively public house"

Operators will work to ensure that the "APP has a full calendar, year-round" that will be "an attraction for locals and tourists, morning noon and night."

You get the idea.  The OPH has been slated to become a party barn.

Meanwhile, the OPH was promised as temporary space to the Pitkin County Library in 2015 for use amidst its redevelopment.  The library expects to vacate this month and the OPH will soon be vacant.

Lease negotiations have been held for one year in secret between city officials and APP principals.  A draft lease was released last Friday by the city attorney and APP.  Read the preposterous document HERE.

A public work session will be held TODAY, June 7, at 6p in council chambers.  Read this issue and decide whether council ought to hear your opinion.  Believe me, they know mine!

I will spare you the legalese and minute detail, but in short, the Aspen land use code specifically states that the purpose of Public (PUB) zoning is "to provide for the development of governmental, quasi-governmental and non-profit facilities for cultural, educational, civic and other non-profit uses."  Aspen's land use code specifically defines a non-profit as "an entity which has received a favorable determination letter from the US Internal Revenue Service regarding their tax-exempt status."  In order to qualify as a tax exempt under 501(c)3, meaning it would pay no tax on its income, an organization must be dedicated to one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international sports competition, and preventing cruelty to children or animals. Yes, the OPH is zoned Public.  And no, none of those purposes involves the sale of beer.

And, according to the IRS, for an organization to be a 501(c)3, it must be "organized and operated exclusively for exempt purposes set forth in section 501(c)3 and none of its earnings may inure to any private shareholder or individual.  Organizations described in 501(c)3 are commonly referred to as charitable organizations."  APP is not a 501(c)3, nor are any of its member companies.

In the absence of a letter from the IRS confirming an entity's 501(c)3 status, council would have to pass an Ordinance for "non-conforming use" to enable a tenant such as the APP to sign a lease for the OPH.   

The Aspen City Charter enables citizens to overturn a council-approved Ordinance by way of a Referendum, which entails a petition and signature collecting (not difficult), and often results in a public vote to determine the will of the populace.  (The Hydro Plant and Base 2 Lodge were both sent to the voters via the Referendum process where both were rejected.)

Finally, after resisting for an entire year, the principals of the APP actually sat down to meet with neighbors of the Old Power House in early May, despite meeting with city council and city officials numerous times in secretive executive sessions to formulate potential lease terms over the course of the past year.  Executive sessions, designed for council to meet behind closed doors to discuss legal settlements and other things like property acquisitions of a competitive nature, were questionably held by council because lease terms for a city-owned property are well outside of competitive lanes.  And what was covered in these questionable sessions was far more than simply lease negotiations, but what was actually discussed will now never see the light of day.  Among other things, it appears that city staff discussed neighborhood opposition to their plans with the APP principals, although anything specific along these lines would only have been conjecture as the neighborhood (and the public at large) knew and still knows very little about the details of the proposed operation, not to mention its sketchy and very debatable financials.  

The APP expected to hit the neighbors with a few points (that they promoted as concessions) pertaining to parking, noise and the number of large special events to be held on the site, and were flabbergasted when the neighbors wanted merely to hear the detailed specifics of what it was they wanted to do at the OPH, as a starting point.  How dare we?!  In their naive exuberance over the 2015 selection, and despite direction from the city to meet with neighbors to establish and define terms that all could accept in a lease, the APP had effectively written the neighbors off.    

Specifics at the May meeting were few and far between, although it was clear that the APP did not realize that their quickie registration (see below) as a "non-profit association" so that they could effectively skirt the zoning rules would not pass the smell test.  When they stated that they were indeed four for-profit entities and none was a 501(c)3, it became obvious that the APP technically did not qualify for the space.  And, let's face it, the likelihood of getting such status from the IRS would be a long shot on the best day.   Sources close to The Red Ant confirm that in a subsequent executive session with council on May 23, the APP was summarily informed by city officials that their non-profit hoax would not fly and they would have to apply with the city for a PD overlay (non-conforming use in the public zone) as a full for-profit enterprise.  Obtaining a PD overlay would require the same process (and have the same effect) as a full rezoning.

One interesting and telling tidbit at the neighborhood meeting (that featured a quick appearance by city attorney Jim True/False) was the city's admission that "the city is not good at enforcement" when asked who would be enforcing the terms of a lease at the OPH.  How reassuring!?!

It increasingly appears that city staff has been a co-conspirator in an effort to expedite the APP's tenancy at the OPH, providing legal "work arounds" to inherent zoning challenges faced by the group.  For example, long thought to be located in a residential (R-30) zone, the OPH turns out to have been re-zoned Public in 1988.  In the process leading up to this discovery by the city earlier this year, our pal, aptly named assistant city manager Barry Crook all but promised the APP that the city would simply change the zoning to Public in order to accommodate their plans, stating that it was his belief that the property's zoning "should have been public all along."  This, with the stroke of a pen.  So much for public process.  The point later became moot, and this zoning issue (no longer residential but public) was celebrated by the APP as a hurdle overcome.  But they forgot to read the fine print of what Public zoning in the Aspen land use code requires.  When informed by the city that the occupying entity of a publicly zoned building would need to be "a non-profit," instead of doing their own due diligence and discovering exactly what this entails, the APP quickly registered with the Colorado Secretary of State as a "non-profit association," announced this to the world, and in so doing, altered their proposed business plan to be centered around a dubiously non-profit incubator/office space entity with the tv station, biergarten and event company on-site to enhance the millennial-pleasing workspace.  (My personal favorite is how the APP insists that it will be providing a "public benefit" a la a non-profit charitable organization by merely having a shared workspace component.  A benefit to their 65 friends who are given a desk in the joint, sure.  But the public?  Hardly.)

In the past month, the PR game has lit up the editorial columns and local debate.  The APP has attempted to create a "beer vs billionaires" fight scenario along the lines of David vs Goliath, stating to anyone who will listen that just a few neighbors in an arguably nice 'hood are the only ones opposed to their plans a la the rich neighbors with their pots of gold and slick legal teams who hate young people and will squash them and their entrepreneurial ideas in the name of peace and quiet.  Ha.  The problem with this ridiculousness is the mere fact that "the neighbors" are just one opposing faction of the community (see THE OPPOSITION below).  With the non-profit hoax perpetrated by the APP being widely reported and the now-publicly known need for a controversial zoning change, the "beer vs billionaires" concept has gained absolutely zero traction.  The APP, by its own doing, has made the issue into far more of a "rogues vs residents" showdown between whiny and entitled rowdies who seek and expect special favors and exceptions just because they think they deserve them, and private property owners desirous of quiet enjoyment of their homes in accordance with the law.   
The momentum has markedly shifted.  Advantage, opposition.  Local distaste for variances, zoning changes and other government-granted favors has reached levels not seen in Aspen in a generation.  Surely, the APP principals have begun to see the writing on the wall?

For one year, as the city requested that the neighbors be patient and allow "the process" to run its course, I agreed to comply, if for no other reason than to support my fellow neighbors in what we saw as a complicated and uphill political battle.  I reluctantly agreed that "feedback" from The Red Ant might be akin to throwing gasoline on the fire and would likely serve to shame and embarrass the tender souls on city council whose votes would ultimately determine the final outcome.  I was compelled, however, to fire off a quick letter that was published in the Aspen Daily News in April following APP's questionable announcement that "it won't be a beer joint, rather a collaborative workspace with a food and beverage component."  Read it HERE.  As time ticked on, and the level of millennial whining and misinformation ruled the letters to the editors and local debate, I could simply sit on my hands no longer.  Once the neighbors met with the APP and learned what we were up against, and even more telling, what they are up to, the PR war was on.  Letters to the editor on both sides of the issue were abundant.   Another letter was called for when Aspen Daily News columnist and pro-APP mouthpiece Beth Brandon weighed in with another of her insipid columns illustrating and disseminating a frightening  dearth of facts or even basic understanding of the issues surrounding the possibility of the APP at the OPH.  I submitted the following, addressed to the author, which was published in both newspapers on May 14 & 16, 2016:

"I wanted to provide you with the facts of the issues surrounding what you call 'the Incubator Power Plant' and how it came to be chosen by council for potential tenancy at the Old Power House.  You appear to be misinformed.

The Aspen Power Plant, or APP as it is known, applied through a formal RFP process in 2014.  Applications from numerous entities were received and indeed vetted, but not by council.  An appointed citizens committee evaluated the various proposals and submitted four finalists to council.  The APP was not one of those finalists.

Mayor Steve Sakdron, who, at the onset of the tenant search, stated that it would be 'inappropriate' to hand over the space to an organization 'that has the wherewithal to operate in a private space,' apparently became enamored of the annual 4th of July picnic held on the site by the Aspen Art Museum and 'inserted' the APP and its plans for riverside revelry into final consideration.  Yes, the APP had been vetted, but with said vetting, the APP didn't make the cut.  It was the mayor who put it back into consideration.

I'm sorry that your frequent owl-spotting trips to the area have not given you an appreciation for the surrounding neighborhood in this quiet little pocket of town.  You have every right not to like this neighborhood, just as you may choose not to live here.  But it is a neighborhood.  And it just so happens to be my neighborhood.  You're right, it's not a publicly subsidized neighborhood, but I found your implication that somehow that makes it less of a neighborhood patently offensive.  I, along with my neighbors, value the views of the mountain and close proximity to the core from this quiet bend in the river every day.

Whether the APP will 'ruin' the neighborhood is anyone's guess.  It is certainly not their intent.  Nor is it the focus of the neighborhood's objection at this point.  We are all just curious when the APP, admittedly and proudly comprised of four for-profit entities, will obtain their tax exempt status from the IRS.  We have been waiting for over a year.  And no, it's not that we demand it, this is a requirement of Aspen's land use code for areas zoned 'public,' such as the Old Power House.  The 501(c)3 tax exempt status is mandatory before a lease can legally be signed between the city and the APP.  Sure, the RFP process allowed for-profit entities to apply, but the land use code very clearly states the need for that very specific IRS status.  It's right there in black and white.  (Perhaps this is why no other for-profit businesses applied.)

The proposed lease that everyone keeps hearing about can be negotiated ad nauseum, but until the APP has its required status from the IRS, no lease can be signed.  If not a tax exempt orgnization, the APP's proposed and selected use for the Old Power House would be considered 'non-conforming' to the existing code.  Perhaps this is why the citizens committee weeded the APP out several years ago?  I don't know.

It will be interesting to see how council proceeds.  Do they continue to extend their wait period for the APP to obtain federal tax exempt status?  For how long?  Or do they pass an ordinance that would allow for non-conforming use of the Old Power House?  The selection of a potential tenant is just that, a selection.  Nothing is legally binding until a lease is signed.  But an ordinace is an entirely different matter, wrought with far-reaching and precedent-setting legal and political implications.

Next time, before you misrepresent a process or disparage a neighborhood, I encourage you to learn the facts."

And just when you thought that rational minds were beginning to prevail, city staff upped its role as co-conspirator with the APP.  Shirking communication with council (but not city staff) and going directly to the press, the APP has recently (June 3 - read it HERE) announced its newfound plans to seek the elusive 501(c)3 status from the feds, but only AFTER the city issues them a lease!!  And what city official would even think to draft yet alone disseminate such a non-complying lease of public property in a blatant effort to protect a proposed tenant from the rigors of a zoning change?  None other than duplicitous city attorney Jim True/False -- the very same scoundrel who asked the neighbors to hold off on pushback and litigation while allowing the process to play out, even going so far as to promise neighbors that we'd see the proposed lease in time to react before it ever went to council.  But late Friday, True/False and the APP released the draft lease to the public. 

The document is linked above, but here are just a few gems that the APP feels entitled to:
25 year lease; initial term of 10 years at $15/sf for the ground floor and $10/sf for the upstairs (for comparison, this proposed lease rate is LOWER than real non-profits pay at the Red Brick!!!)

City to pay $1.35 million for building improvements (A/C, sewer service, roof and window replacement, etc)

28 on-site special events per year ($$)

Hours of operation 7a - 10p daily; access to the shared workspace  24/7/365

A host of other favorable-to-the-tenant policies.  And don't forget the city's admission of poor enforcement....

The APP defines its opposition as "a dozen neighbors" in the subdivision of Oklahoma Flats, neighboring the OPH off Gibson Avenue.  How wrong they are.  As one of these neighbors, I know firsthand because I keep the list of nearly 100 families in the surrounding area who oppose the APP at the OPH.  Yes, most all of Oklahoma Flats is on that list, but also those in River Bluff Townhomes, on Miners Trail, along Gibson Avenue, in Fox Crossing, on Spruce Street and a surprising number in the Smuggler trailer park see the APP's impact on the neighborhood as something none of us want, need or ever asked for.  

Beyond just the neighbors, add in the aggrieved non-profits who prepared lengthy (and costly) proposals for the OPH in 2014.  These organizations and their supporters were aghast at the APP's come-from-behind selection in 2015 and have watched in horror as the process has been handled in secret to this point in time.  That the APP is now attempting to join the local 501(c)3 ranks is not at all welcomed by the REAL non-profits in our community.

Then consider the Science Center advocates.  This hot new non-profit (with an incredible mission and without a home has generated interest, funding and real metrics from a pop-up experiment this winter) lost out in the final round to the APP.  The Science Center has already come forth stating its continued interest in occupying the OPH, including its willingness to share the space with other conforming entities such as the Red Brick Performing Arts Center.  They've even said they'd figure out how to accommodate a shared workspace component upstairs as presented in the APP proposal if this is something the community deems necessary.  Neighborly indeed.

And, let's not forget one of my personal favorites:  the city hall watchers.  This group recognizes the ongoing and never-ending pattern of bad decisions emanating from our local government.  Starting with the stupid idea to give away 7200 sf of publicly-owned space amidst planning to build 50,000 sf of new office space because of "need," and going from there (see Issue #122), this vocal component of diverse viewpoints in our community has successfully quashed the Hydro Plant and the Base 2 Lodge in recent years.  When the city hall watchers are joined by other what I will call "informed citizens against the miscarriage of public policy," the numbers grow and grow.  I know, I hear from all of them.  

And don't for a minute forget about John Q. Public who has been watching from afar and reading bits and bobs in the local papers.  These citizens resent council's decision to house for-profit businesses in a public space.  They especially see the APP lease negotiations as the city's way of bending the rules for a pet project.  No one wants an extension of Aspen's commercial core north of the Roaring Fork River for the first time. 

The community-wide opposition to the APP in the OPH is vast.  An Ordinance-Referendum scenario would surely end up at the polls where the APP would go down in flames.  And they know it.  The IRS hoax is all they can hope for. 

The looming decision (to pass an ordinance enabling the APP or to kill the deal and move on) is a problem of council's own making.   Recall that the APP didn't even make the cut when vetted by the citizens committee.  Several on council all but admit that they were caught up in the romanticism of beers by the river, and it's abundantly clear that absolutely no one in city hall looked into the very serious zoning implications.  For regular grown-ups, today's decision is straightforward and obvious.  But we're talking about Aspen's city council here.  Word is, of the four council members who hold the cards (Bert Myrin has recused himself due to a real estate interest in the Oklahoma Flats neighborhood), none of the four have the stomach for what is shaping up to be an Ordinance that will inevitably be followed up by a Referendum to unwind it.  This is how The Red Ant best gauges the council sentiment for/against the APP in the OPH at this critical stage:

ADAM: vocally opposed (voted against APP in 2015); has always said "great idea, wrong place"
ART:  vocally supportive; said "this decision will be THIS council's legacy" upon APP's selection in 2015, and yes, Art, it will be indeed; dug in with his opinion and not entirely lucid on the community pushback and implications of the looming ordinance/referendum scenario 
BERT:  cannot vote but vocally opposed; believes the city should not be giving 7200 sf away when it will need to rent that same amount of space for the next 5 years at ~$18K/month while the Taj Mahal is being built
ANN:  publicly non-committal but rumored to have supported APP in 2015 because of the "public theater and dances" to be held there, despite these activities NOT EVER being part of the APP's written proposal nor mentioned in either of its two presentations to council; up for re-election in May 2017 
STEVE:  recall that the mayor brought the APP proposal back to life from the trash heap in 2015 but his patience is waning, especially given the shenanigans related to the group's non-profit status; known to be a "reed in the wind" when it comes to decision-making (he goes with whatever he hears last); up for re-election to a potential 3rd term in May 2017

Soooo, the question has really changed to, "What is this group's appetite for an Ordinance/Referendum if they triple down for the APP?"  The Red Ant says, none, save maybe Art.  The others are solely focused on their political capital with the millennial voting block that is represented by the APP principals.  Council is trying desperately to save face and no one wants to be the bad guy, but this jig is up and everyone knows it.  APP is equally ego-invested and won't simply walk away; they want council to send them packing. The draft lease release is surely their great Hail Mary as the clock runs out.  The fragile egos will meet in public tonight to hash through the proposed lease, assuming council won't have the cajones to simply JUST SAY NO up-front based on the abundantly clear zoning laws. This needs to be the APP's last call.  

Attend the meeting and speak out -- council knows how the neighbors feel, but for those others (see THE OPPOSITION above), THIS is YOUR chance to state your disapproval.

Write to council -- they do read your letters, although several do not have the manners to acknowledge it:


Forward this email to your friends and neighbors.


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