Appearing at an Aspen Chamber Resort Association (ACRA) meeting Tuesday, Mayor Mick Ireland criticized a recent sustainability report the group released that suggests the city relax development regulations to combat a stagnant economy.
If city regulations are removed, small lodges and commercial businesses will be replaced by free market residential units, which are more profitable to the property owner, Ireland said. That’s likely to happen with Aspen’s Mountain House Lodge, which recently went into foreclosure; the mayor believes it will ultimately be purchased by a new owner who will convert the property into luxury condos. The hotel, which remains in operation during the pending foreclosure and bankruptcy process, is one of the few left in Aspen that offer rooms for under $200 a night.
Overall, there is tremendous market pressure on commercial properties to convert to residential units, Ireland said.
Ireland compared property prices using Pitkin County Assessor’s Office data with census information in downtown Aspen. In the past decade, there has been a decline in commercial properties and the price per square foot of residential property is twice that of commercial property, he said. That in turn creates an incentive for owners to convert their property to residential, he said. There has also been a decline in population and the vacancy rate has increased in the core.
“The question for me is whether upzoning and gentrification promote vitality,” Ireland said.
Ireland’s comments came as Debbie Braun, ACRA president, was presenting a summary of the 2013 Economic Sustainability Report to the ACRA board.
Local jobs, wages, occupancy levels and retail sales growth have been flat since the 1990s, according to the study. In order to improve the local economy, the study suggests that the community tackle seven challenges.
Those include removing barriers to lodging and condominium renovations, improving air service to the valley, redeveloping the Lift 1A neighborhood, removing small business and development regulations and building at least one new hotel in the city.
The study was created by an ACRA subcommittee with oversight from Ford Frick, a researcher at Denver-based BBC Research and Consulting, and is based off of a similar one done in 2002.
Ireland agreed that the city should have more lodging, but said it should be affordable instead of high end and cater to people who have not visited the area before. Ireland also said he thinks the city should wave regulatory fees for small lodges on the condition that the city be reimbursed if the owners sell the property.
Jeff Bay, manager of the small sized and moderately priced Hotel Aspen and Molly Gibson, questioned why the study encourages opening a new hotel in Aspen when current occupancy rates are flat.
Donnie Lee, The Gant general manager and ACRA chair, agreed that nobody wants to see large empty buildings in Aspen, but it’s important to focus on what can be done to encourage the right type of development. Lee suggested ACRA first focus on how to help small lodges upgrade their properties along with improving the air service to Aspen before addressing building a new hotel.
ACRA members decided to create two committees each dedicated to one of the issues. An ACRA public affairs committee will meet twice a month and work with the city to figure out a way to help small lodges. Meanwhile, Stay Aspen Snowmass President Bill Tomcich is leading a committee made up of Aspen Skiing Co., Pitkin County, the city of Aspen and Snowmass Tourism to try to attract more airlines the Aspen airport.