ISSUE #130: How ArrogANT! (1/19/2017)

"You're trying to regulate something you know nothing about."   

-- Charif Souki

It turns out that the recent "controversy" over the future of chain stores in Aspen isn't about chain stores at all. 

The current brou-ha-ha about chain stores, the assumed and therefore rumored unchecked growth thereof, and the potential for banning, capping, limiting, and/or restricting them came to a fore today during a 7-hour meeting in an Aspen Institute conference room.  Organized by former Aspen mayors John Bennett and Bill Stirling, along with high tech entrepreneur Jerry Murdoch, about 25 of Aspen's "thought leaders" (as they were called) gathered to discuss Murdoch's proposed city ordinance that would "restrict" chain stores in Aspen's commercial core. (I wrote about it recently HERE.)

Today's meeting was a complete fraud. It took a couple of hours of sitting there listening and trying to figure out what was really going on before it became abundantly clear.  Like I said, the ordinance and this entire charade is not about chain stores at all. Chain stores are just a red herring.  It's about development.  Specifically, ending development (new buildings and redevelopment of existing ones) in Aspen's commercial core.  Here's how I know:

We were told at the onset that there were three possible outcomes to today's discussion:

• Accept Jerry's proposed ordinance as a group and present it to city council.
• Don't accept it and Jerry will circulate a citizen's petition to get the issue on the ballot for a public vote, likely in May.
• Continue the discussion.

Glaringly absent was the option for the group to shoot the proposal down.  This assumption of moving the ordinance forward regardless of information, feedback and lessons learned throughout the day was disconcerting if not foretelling.

Next, we were informed that the object of today's discussion was to address the growth of "formula retail" (the fancy name for chain stores) with Jerry's ordinance inherently being the solution.  And so it began.  It's Aspen, so of course there was A LOT of vague, flowery discussion about "community character," "balance" and "diversity" as these relate to retail offerings here, and many truly valuable discussions on the local retail environment from hand-picked yet arguably credible local retailers, landlords, bureaucrats, realtors, business people and regular local folk.  But there was one major thing missing at the professionally moderated meeting that had lofty ambitions to agree to take Murdoch's ordinance to city council in the immediate term for adoption: consensus.

Most glaring was the lack of agreement among the group on the mere fact of what Murdoch's ordinance would actually solve or even merely address.  As the day went on and the ordinance itself was clarified, the waters only became muddier.  A participant from Australia who owns and operates a successful retail district in Brisbane called James Street was invited to share his experiences.  Patrick George thoughtfully listened to other participants and pointed out to the group that chain stores pay their bills, it's very hard to find non-chains that can compete in the long term in an expensive and seasonal environment, and the (small) size of our population effectively prevents the success of what he called "everyday retail."  Not exactly music to chain store detractors' ears, but real world experience from someone who would know.  Notably and quite ironically, he asked THE question of the day: "What is the real problem?"

This was because so many disparate and unrelated problems were brought up.  In fact, it seemed as though nearly every participant (predominantly from the bureaucratic, local retailer and "local folk" side of the house) had his or her own problem that they wish city council would address, presumably with Jerry's ordinance.  Problems, ostensibly because of chain stores in Aspen, included:

• Erosion of the Aspen brand
• Fear of chain stores taking over 100% of the ground floor retail space in Aspen
• We're putting all our eggs in one basket by counting on chain stores to pay the bills
• The city's regulations / taxes / fees make starting a business here prohibitive
• Loss of vitality / funkiness / character  -- we're getting too homogenized
• Locals being unable to start / own businesses in Aspen
• Locals not being able to shop in Aspen 

But when the facts on chain stores in Aspen were revealed, the tone changed.  It turns out that "the chain store problem" isn't actually much of a problem at all.  Several participants had walked the commercial core (the 18 blocks north of Durant Street, south of Bleeker, west of Spring and east of Monarch) and identified 152 ground floor retail locations.  Of these, 46 were deemed "chain stores" because they have 11+ outlets.  That is just 30%.  Prior to the meeting, the community rumor mill was stoking fears and churning out numbers more like 60%, and growing.  And there was no real data that even addressed yet alone proved that all chain stores in Aspen operate at a loss as a matter of course.  It's a clever rumor, but a rumor none-the-less until proven otherwise. And remember, the city's largest landlords were all there, and they certainly agreed: new chain stores are NOT lining up trying to open here.

So, just what is the problem that Jerry's ordinance ostensibly addresses?  The question hung heavily in the room, but not everyone saw it.  It was fascinating to see how enraptured the millennial wannabe business owners were by the mere notion that their government might just adopt a regulation that punishes landlords and chain stores, and in so doing might just give them a boost up toward the elusive golden ring.  It was equally intriguing to hear from local retailers that maybe even more restrictions on chain stores ought to be implemented, such as prohibiting them from having sales on their merchandise except at designated times of the year.

All of this made for interesting theater, but proposed ordinance is really just a solution in search of a problem.  And despite what Jerry continued to espouse, no specific information or data was presented that supports his position that a restriction on chain stores in new and redeveloped buildings in Aspen's commercial core will IN ANY WAY ensure that unique and funky stores that will save Aspen's character will open there instead.  Nor will it make it one iota easier for locals to start and own their own businesses in town.  And I am hard pressed to see how the goods for sale in these restricted spaces will somehow be more affordable for locals as a result.  It's a solution alright.  But for what problem?

A lot of information was shared at the meeting, but the facts on the ground revealed that the "chain store problem" turns out not to be a problem at all.  So what is the REAL "problem" that isn't being talked about?

It's development.

When pressed, Jerry acknowledged that his ordinance would NOT ban chain stores in Aspen.  Nor would it cap or limit them in any way.  Not in EXISTING (and approved for development) buildings.  The buildings with existing chain store tenants can keep them and can even write leases for new chain store tenants when current leases are up.  In fact, Jerry's ordinance allows ANY AND ALL existing buildings in the commercial core to rent to as many chain store tenants as they wish today, next week and into perpetuity.  No restrictions whatsoever on chain store tenants in existing (and approved) buildings in the commercial core EVER. 

THAT was the WOW moment for The Red Ant. 

If EXISTING (and approved) buildings can have chain stores as tenants into perpetuity (meaning that many, many more chain stores CAN come to Aspen, unrestricted), what is really going on here??  Clearly, the issue is not about chain stores at all.  Think about all the potential places for chain stores in existing buildings (specifically the spaces where the other 70% of our current retail stores exist) and ask yourself:  how again does this ordinance protect Aspen's character / brand / vitality / uniqueness that is so at risk because of chain stores????  It doesn't.  What it does is place potentially cumbersome restrictions on NEW and REDEVELOPED buildings in the core, restrictions that will hinder and encumber investors and developers in such a way that new buildings and the redevelopment of existing ones will become financially untenable.  No investor or developer will risk developing new retail space that cannot ever be rented to the same tenants as those in all the buildings around them.  Theoretically, it ends development in the core.

The million dollar question is why.  And the answer is not entirely clear.  But here's my guess.  Jerry Murdoch wants to "save" Aspen from future development in the core. He doesn't want to punish the current landlords.  He is not going after Mark Hunt and his portfolio of downtown properties.  (It's next generation's Mazza-Woods-Hunt-Hecht-Marcus-Garfield-Cox-Souki-caliber property owners that will suffer.  And the community, because the passage of time inherently creates the need to redevelop at some point.)  And he wants to do it his way, right now.  He's rich.  He's successful.  He's smart. On some level, it plays as altruism.  Freeze Aspen in time.** 

And he's been masterfully deceptive in ginning up support for his plan.  The Whiny Millennials (see Issue #129) are all-in with Jerry because they currently have little chance to have what they want here, and chain stores have become the perfect villain.  He has played them.  Why?  They don't know any better, and because (recall from the beginning of the meeting) if the ordinance isn't accepted and passed by city council, Jerry will petition to get the question on the ballot where it will likely pass with the voters.  (The millennials and their "bring back the Quiet Years" brethren will absolutely vote for it.)  It will also likely pass because it will be promoted on the false premises debunked today.  And what's in it for him??  "Success."  He obviously has a beef with the ongoing development and redevelopment in Aspen, and he wants it to stop.  Now.  Forever.  This, despite Aspen being a 150-year-old town with many, many very old buildings that will absolutely need redevelopment someday.  Again, this has absolutely NOTHING to do with chain stores.  If he is able to jam his ordinance through (one way or the other), it will hinder if not effectively kill development in the core.  He wins.  And despite the lengthy discussion today (some parts of it more enlightened than others), the moderator made the whole game clear when he congratulated Jerry for NOT saying "It's my idea and I'm doing it," which is precisely what he effectively said in concluding the meeting.  (Jerry emphatically stated his plans to present his ordinance to council on February 6.)  He also kindly suggested that if people had other ideas, they too should present these to council, presumably as their own ordinances.

It's the hurry-up offense, folks.  The meeting was merely Jerry's way to "check the box" so he can say that he got a read on what the community wants.  He got a read alright, but certainly no consensus.  Not even close.  But he is moving ahead anyway.

A strange day indeed.

** Mt. Vesuvius famously "froze a community in time" back in 79 AD.  How'd THAT work out for the people of Pompeii?