Citing the new third-story rule, Linden Nelson seeking redevelopment
The owner of the Crystal Palace building said he is entertaining offers from prospective buyers so the historic property can be redeveloped into lodging.
“There are three or four interested parties I have spoken to in the last three months and we’ve been discussing where to take it, what to do with it,” said Linden Nelson, a Michigan businessman who bought the building and the one next to it on Hyman Avenue in 2008 and 2007, respectively.
Aspen Mayor Mick Ireland said Nelson reached out to him a month or two ago, asking him what the political will would be to get approval for a three-story redevelopment.
“He asked what the possibility would be of putting lodging and a restaurant on his property,” Ireland said. “We’d welcome that.”
Nelson said he talked to the mayor because he wanted to get a better understanding of the city’s “wish list.”
“Rooms in that corridor are needed,” Nelson said. “We want to see something there that is great for that corner of downtown.”
The redevelopment concept comes after Aspen City Council passed a new land-use rule that encourages lodging in the downtown core.
After reducing allowed new building heights from 42 to 28 feet in 2012, the council in January passed a zoning law that allows three-story developments as long as they’re on the north side of the street and only if they’re used for lodging. The north-side stipulation is because tall buildings on the south side of the street block more sunlight and lead to ice build-up. The Crystal Palace building is located on the north side of the street.
The move was to encourage more lodging downtown. While some are skeptical that a small lodge proposal will come forward, Ireland has said in the past that with new condos being banned in downtown Aspen, more developers might find lodging to be the “highest and best use.”
That appears to be the case for Nelson, or who ever buys the building, which has been dark since The Palace bar closed in the winter of 2010-2011. Many people in the community, including elected officials, have lamented that the block where the Crystal Palace sits has been dark for too long. The Mother Lode building next door also has been unoccupied for years.
The Crystal Palace for more than 50 years was a popular dinner theater under the direction of Mead Metcalf, who sold the buildings to Nelson for a combined total of nearly $13 million.
Metcalf joked on Tuesday that he’d buy the building back for “the right price.” He also said he is concerned about where all of the stained glass that adorned the interior of the theater has gone.
The Federal Deposit Insurance Corp. (FDIC) got involved with the property a little over a year ago when it seized United Western Bank.
Nelson had taken out a $15 million loan from the bank about the same time that he purchased the Crystal Palace building in May 2008 for $8.9 million. He bought the building next door for $4 million in late 2007.
The FDIC marketed the bank’s assets, which included the Crystal Palace loan. California-based Colony Capital Advisors picked up the loan in December 2011. Representatives from the FDIC and Colony Capital couldn’t confirm by press time whether they still have an interest in the Crystal Palace loan.
Meanwhile, three condominium properties in the Paragon building, which includes the old Ritz Carlton sales office that Nelson, as principal of Slam Commercial LLC, bought in 2005 for a combined $6 million, are in foreclosure, according to Pitkin County Treasurer records.
The $5.8 million note sits with U.S. National Bank Association. A public auction was to occur today but there were no bidders for loan, according to the treasurer’s office.