Alarm bells of various degrees are ringing throughout Snowmass Village after yesterday’s announcement by Related WestPac that the next construction phase of Base Village is to be put on hold because construction financing fell through.
Related WestPac, developer of the partially built 1 million square foot project, also laid off one-quarter of its Aspen and Snowmass workforce, many of whom had been hired to work on the now delayed phase. The terminated workers were given severance packages and Related WestPac President Pat Smith called it “probably the worst day of my life.”
A candidate forum Wednesday (see related story) was abuzz with the news, and Town Council candidate Markey Butler publicly expressed her concern for those laid off, saying, “We’re all in this together.”
As for the short- and long-term impacts of the construction delay on Snowmass Village, town officials expressed various degrees of concern.
Town Manager Russ Forrest said there shouldn’t be any significant impact on the town’s budget in the immediate future, since no sales tax collections are anticipated for the three unbuilt buildings until the ski season of 2009/2010. Then, however, he might worry.
Without the three buildings, “We’d want to look at real carefully whether we have the critical mass needed to have a thriving retail core,” he said, explaining that fewer bedrooms means fewer people supporting local restaurants and shops.
Asked whether the town is anticipating not getting any other types of revenue, such as building permit and other construction-related fees, Forrest said, “That’s something we’d have to look into. But we don’t think those fees are significant enough.”
Building permit fees support more than the building department, Forrest said. A portion of those revenues goes to support a seasonal construction manager, the town attorney and the town manager, for example.
Related WestPac has assured officials that the buildings from which the town is anticipating revenue — the Viceroy hotel and the Little Nell Residences at Snowmass — are going forward as planned, even though the financing for the Little Nell was impacted by the latest turn of events. The Viceroy, once complete, will have about 225 condominiumized units and the Little Nell will have 27 luxury residences.
The three buildings that are now on hold were to house 21 luxury residences called the Key Collection. It is unclear how many commercial spaces are in those buildings, which were to round out the Base Village core. One of the buildings was also to function as the so-called arrival center.
“The biggest issue is, come ski season 2009/2010, how is the guest arriving, how are they checking in and how are they getting from the transit facility to the lifts and stores?” said Forrest. The arrival center was to hold all the central check-in functions (except for the Viceroy), as well as escalators that would take people from the parking garage or transit center to the village plaza.
Councilman Arnie Mordkin, speaking as a mayoral candidate during an election forum Wednesday, said “the impacts are much more significant” than just a delay in the arrival building. Without a central operations function, he said, more employees would be needed to operate Base Village.
Mordkin, who said after the forum that he doesn’t believe the bad news will be limited to a slight delay of three buildings, called for a “summit” to find out more about “what’s really going on.”
He also expressed some disappointment that the town has no guarantees from the developers about finishing the project, with the significant exception of a $30 million infrastructure bond to pay for community benefits like road improvements.
“I thought yesterday that we had guarantees,” he said. “And I’ve been informed we did not.”
Councilman John Wilkinson, who is running for reelection, said that he will ask at the next council meeting that a committee be organized to look at the “ramifications” of the reduced number of buildings.
“My main concern is the economic stability based on all the parts,” he said after the forum. “We need to look at the impact of not having all the buildings in place.”
Bill Boineau, Mordkin’s opponent in the mayoral race, pointed out that the council they both sat on which approved Base Village was very careful to make sure those community benefits, which also include all the mountain improvements, were done up front, just in case there was an economic downturn or other circumstances.
Unlike Mordkin, Boineau does not believe there’s more to the story at this point, and doesn’t see much the town can do about it. He did say, however, that the town should heavily scrutinize the next phase of development when the applications come before them.
Both Boineau and Mordkin, along with the other candidates, said the delay should not change Base Village in the long run.
“We’ll see a delay in Base Village development, a delay in the phasing of the program, but we won’t see a significant change to the design of the buildings,” said Butler.
“To say this will change the product of Base Village based on the economics is premature,” said Boineau. “We really have to stop and say ‘don’t change things right now because of the economics.’”
The candidates were also asked whether the economic situation would make them more sympathetic to any requested changes. Related WestPac also owns the Snowmass Center and the Snowmass Mall and is marketing in total a $3 billion overhaul of Snowmass Village.
Absolutely not, most said, although some argued that each requested change has to be looked at on its own merits.
“You cannot allow economic stability or instability to stampede you into results that capitulate to the developer’s request,” said Mordkin. “The developer’s financial condition will be here for a year or two and then it’s gone, the developer will go and the rest of us will have to live with what’s there.”
“I believe Pat [Smith] would ask for further variances with or without this financial crisis, whatever is expedient for their bottom line and get the heck out of town,” said council candidate Kay Honigman-Singer. “Now he’s got a new reason to come to us and say, ‘we won’t be viable without further variances.’ But don’t grant it until they show good faith to this community.”
Wilkinson said any requested change needs to be an enhancement, like he believes the Viceroy will be, and Boineau, currently a planning commissioner, defended his board’s approval of changing one of the buildings connected to the Viceroy into fractional ownership units.
“Fractional gives the community more of the spend we’re looking for,” he said. “I’m willing to look at some things but we need Base Village to be a success and have bodies in it.”
Butler agreed, adding that, “We cannot just say no to variances; we need to understand the nature of the variances. But the variance has got to do something to really light me up.”
According to Forrest, one potential ripple effect of the delay may be less tangible, and that has to do with marketing. Forrest pointed out that many resorts with significant development are seeing projects slow down or be put on hold — and that Snowmass is doing better than some where developers have simply walked away.
“That’s a greater concern to see buildings sitting there without any activity,” he said. “We’re just going to have to weather this storm, and I think this developer has the wherewithal to get through it.”
lutz@aspendailynews.com