Aspen’s long-term success depends on the creation of an economy that is not overly dependent on the wild swings of fortune alternatively enjoyed and then suffered by the narrow slice of what Wall Street Journal author Robert Frank describes in his book as, “The High Beta Rich,” (Crown Business, New York, 2011).
Aspen can ill afford to see its downtown economic engine converted into a speculative venue for the excesses of an increasingly volatile finance-driven economy. The downturn following the speculative dot-com bust sapped the vitality of Aspen’s core, as residential development first supplanted commercial vitality and then left behind vacant spaces.
In addition, allowing the transformation of commercial space into residential speculative cold beds has forced up rents for the remaining commercial space. Businesses are competing with speculators for space, paying rents equivalent to residential use rents. When the bust comes, many of these spaces become part of an international bankruptcy limbo, unable to return to their former uses and unable to move forward.
The violent swings of a speculative-based economy has had other adverse consequences. Public policy response to the boom-bust dot-com cycle led to the “infill” zoning that greatly increased allowed downtown mass and scale in hopes of restoring economic activity. The result was that the subsequent era of toxic mortgages and jackpot payouts to money managers saw even more viable businesses and profitable lodges replaced with more “cold bed’ residential space.
The Little Red Ski Haus, the Crystal Palace, the Mother Lode and the Chart House were all swallowed up in the speculative frenzy aimed at creating luxury residences. Each of these businesses contributed to a sustainable economy, providing beds or meals, and each was a popular venue for our guests. Each now remains in financial limbo, waiting the salvation of another boom or a court ordered sale.
The lure of huge, leveraged payouts can, as the high-beta economy recovers, bring us more of the same transformation that is best summarized it two words: Base Village.
It is, as a legal matter, too late to rezone Little Annie’s or the Benton building. Nonetheless, I do not favor negotiating the preservation of those buildings. Either the buildings are historic and should be ruled as such by the City Council or they are not eligible for such classification.
If the buildings are properly found to be historic, there is no need to pay “ransom” or whatever one chooses to call the $4.5 million in concessions that have been asked. If the buildings do not merit protection as part of the historic district, then there is no justification for paying someone not to tear them down.
Mr. Frank’s book warns us as follows:
“Yet Aspen’s next crisis — and there will be a next crisis — will likely be more extreme than the last. More than two hundred years after the silver bust almost wiped Aspen off the map, the town is once again is home to financial mania, this time from stock markets and asset bubbles rather than silver prices. ... [H]ypercycles of euphoria and despair, and the strains they produce on the daily bonds of community, are now as much a feature of Aspen’s landscape as the snowcapped peak of Mount Sopris.” (Page 151, “The High Beta Rich,” Crown Business, New York, 2011.)
We cannot reform the national economy but we can dampen some of the excess with zoning that restores a more moderate mass and scale and places larger structures where they fit. Sunnier streets and small-town feel are not recession proof but offer our best opportunity to sustain Aspen’s premier resort. Let’s amend the land-use code to conform with the desires of the citizens and endanger fewer puppies.