The six-month, city-imposed deadline for the developers of the old Cooper Street Pier building to establish an affordable restaurant in the basement has passed, and the manager of the space said it is because bringing in an operator that can offer cheap eats while paying the rent has proved difficult.
The May 20 deadline was part of a settlement between the city of Aspen and building owner JS Cooper Street LLC, which sued the municipality after the developers’ initial application for the project was denied.
JS Cooper Street — comprised of principals Andrew Hecht, his son, Nikos Hecht, Ron Garfield and Joshua Saslove — and the city settled the lawsuit. Settlement terms involved Aspen City Council approving a 4,527-square-foot condominium on the third and fourth floors — typically, downtown condos are capped at 2,500 square feet — in exchange for the developers bringing in a mid-priced restaurant, bar or brewery in the downstairs space.
Among the terms are that the subgrade business will pay rent that is no greater than 75 percent of the free-market rate of a similar space in downtown Aspen, and not greater than $50 per square foot for the first year.
Lex Tarumianz, president of Pyramid Property Advisors, which manages the building, said Friday that even with those terms, finding a tenant hasn’t been easy. Still, the ownership group has one or two prospects and is close to a lease agreement, he said.
“They are in discussions with a few different restaurant operators right now,” Tarumianz said. “We expect something to be ironed out in the near future.”
Tarumianz, who was not part of the legal negotiations between the city and JS Cooper Street, called the terms convoluted.
“The menu items were literally supposed to be within 10 percent of Bentley’s, which now no longer exists, so it has to be in some range of the bottom third of the restaurant market [prices] in Aspen,” he said, referring to the bar that was once in the Wheeler Opera House. “How they plan on doing that, I’m not sure.”
The city’s community development department may have to send someone around to collect menus and “lay out a spreadsheet of burger prices” in Aspen to determine if the Cooper Avenue establishment is adhering to the legal terms, Tarumianz said.
“That’s why it’s taking some time” to find a restaurant tenant, he said. “It makes potential restaurateurs scratch their heads.”
Similar lease terms are in place for Justice Snow’s, which took over the Bentley’s space in the Wheeler Opera House, owned by the city. Michele Kiley, a co-owner of that business, said she can identify with the Cooper Avenue issues.
Kiley and her fellow owners opened Justice Snow’s after City Council chose their business plan over several other proposals. The city subsidizes the space with a lower rent compared to other, private landlords.
Asked how a restaurant in Aspen can offer good food and drinks while adhering to the city’s terms, she said, “It has been very hard.”
Justice Snow’s maintains a menu of high-quality food at prices that abide by its agreement with the city, and also satisfy its shareholders, despite the fact that doing so causes difficulties for managers and staff, Kiley said.
“Great food is more expensive,” she said.
To make up for that cost, she and her partners, among other cost-cutting measures, “don’t do staff discounts,” Kiley said. “And that’s a hardship for me because I value my staff. ... We don’t do [complimentary drinks].
“It’s a fine line” between profitability and affordability, she said.
Chris Bendon, the city’s community development director, said he had a different take from that of Tarumianz.
As part of the settlement, the restaurant operator, not the city, will take on the comparative price duty, checking menus at The Red Onion, Hickory House and similar establishments to ensure fares are within the agreed-upon threshold, Bendon said.
During the legal negotiations, he said he told council members that the burden of proving that the Cooper Avenue restaurant’s prices are meeting the agreement would be too much for his department to handle.
“I said we would need a full-time chief of menus,” Bendon said.
As for missing the deadline for occupation, there is no automatic date for when the city would take over, as long as the owners are trying to find a tenant, he said. There first would be conversations about the status of the process before that happened.
But if they fail to find an operator, “the burden shifts to the city to find someone and place them in that lease,” Bendon said. “I’m sure they’d rather have more control over their tenant, as opposed to handing it over to public.”
Tarumianz said the building owners have a couple of good prospects to run a restaurant in the space. They hope to “have something solidified soon,” he said, declining to elaborate on when that could be.
“It’s pretty out there,” he said of the lease agreement.
City officials “really spent some time to make this thing complex, and they’ve achieved it,” Tarumianz said.