Bidding war yields cash for redesign of agency’s Aspen headquarters
In an auction Tuesday morning that lasted more than two hours and occasionally devolved into bidding wars between live and online buyers, the U.S. Forest Service sold five undeveloped lots on its Aspen West End campus for $7.01 million.
Three buyers split the five lots, all located near the corner of North Eighth and West Smuggler streets. One buyer purchased lots one and two for $3 million, another bought lot three for $1.15 million and a third purchased lots four and five for $2.86 million.
Scott Fitzwilliams, the White River National Forest Supervisor who oversaw the sale, said he was pleased with the auction results, “though, like any seller, I wish we had gotten a little more.”
Fitzwilliams said the sale will allow his agency to start the process of remodeling its Aspen headquarters. Tentative plans call for the construction of a new visitor’s center, storage space, and employee housing that could include a duplex or tri-plex and a bunkhouse.
“We’re not sure about that yet, but it will probably have a smaller footprint than what’s there now,” Fitzwilliams told the bidders before the auction. The current facilities, he later said, are “substandard and dilapidated” and sorely in need of rebuilding.
Two of the buyers refused to give their names, but Diane Ducote, who paid $3 million for lots one and two, said that she and her husband had owned a home in Aspen for more than 16 years. They also live in New Orleans, she said, but they have a son who lives in Aspen full time and are planning to build a family home on the two lots.
Originally, Ducote had bid $2.85 million for her lots, but after a closed-door meeting with Fitzwilliams and his Forest Service colleagues, she boosted her offer.
“We sat down with all the winning bidders and told them what we had been hoping to get for each lot,” Fitzwilliams said. “We told them that we wanted to make an up or down decision today on whether to accept their bid, and then we asked them to make another offer.”
Although Ducote agreed to pay more than she had originally offered, the other two winning bidders didn’t budge.
The winning bidders now have five days to pay the Forest Service 10 percent of the total price for their lots, and the sales are expected to close within 30 days.
Fitzwilliams has said in the past that he would be pleased with a sale price of $2 million per lot. The auction yielded average prices of roughly $1.4 million per lot. Most of the lots are around 6,500 sqaure feet in size, although one of them, lot four, is 11,300 sqaure feet.
“These were not screaming deals, but they were a solid discount,” said Tim Estin, an Aspen broker with Coldwell Banker Mason Morse, who attended the auction. After speaking with other brokers, Estin said, “My overall impression was that the buyers did extremely well, and we were surprised that it didn’t go for more.”
In 2011, Estin pointed out, two lots on the 300 block of Bleeker Street in the West End sold for $2 million each, and that was seen by some Aspen brokers as the bottom of the post-recession real estate slump.
Chris Council/Aspen Daily News
John Robinson, branch chief for the real property disposal division of the General Services Administration, waves his hand at the close of the auction for the U.S. Forest Service parcels located in the West End. The auction was held on Tuesday morning at the Koch Building at the Aspen Institute and included bidders who were physically present as well as online bidders. The color-coded screen behind Robinson represents the bids and their respective plots, with the amounts listed on the left side of the screen.
“But it could have been argued that [the Forest Service] parcels should have been less than $2 million because they were farther from downtown,” he said.
A country fair-style auction in the Koch Building
“It’s auction time, folks,” exclaimed the auctioneer, John Robinson, before launching into his rapid-fire rap, gradually racheting up the prices of the lots for sale.
Robinson is the real property branch chief for the General Services Administration, a federal agency that handles the sale of government property and was conducting Tuesday’s auction on behalf of the Forest Service.
“It all depends on how nice a place you want your neighbors to have,” said Robinson, cajoling the bidders. “The higher these bids go, the nicer that [Forest Service] facility is going to be!”
The auction took place both live and in cyberspace, and a clerk sitting next to Robinson entered live bids into her computer as she fielded bids from an off site clerk who was handling internet traffic.
To insure that everyone had some skin in the game, each bidder had to come with a $50,000 cashier’s check in hand. The winning bidders handed over their cashier’s checks to the Forest Service immediately after the auction, as a down payment on the lots they’d bought.
At the auction, bidders could make an offer on individual lots or on any combination of the five available, and bidding for the package deal of all five lots reached $6.725 million at one point, prompting a number of bidders to give up and filter out of the room.
Yet before a single bidder could make off with the entire parcel, other bidders effectively reset the proceedings by upping their bids on individual lots, raising the stakes and forcing everyone to reconsider.
Robinson wondered aloud to the crowd why there weren’t more people bidding for all five parcels. “Who doesn’t want a whole acre?” he asked.
“You’ve never worked with the city, have you?” retorted real estate broker Lorrie Winnerman, who was seated in the crowd.
Winnerman was referring to the fact that all three of Tuesday’s buyers will have to go through the city of Aspen’s growth management process and pay affordable housing mitigation fees before they’re allowed to build anything on their new property.
“These buyers really don’t know what they’re getting,” Winnerman said.
In fact, just after the auction closed, local businessman Peter Fornell swooped in and began chatting with the winning bidders about affordable housing mitigation.
Fornell has pioneered a new program allowing developers who build affordable housing to earn credits that they can sell on the open market to people who need housing mitigation under city rules.
At auction’s end, the winning bidders gathered at the front to meet and greet their new neighbors, and compare notes on how much time they spent in Aspen.
“We’ve been coming here for 10 years,” said one buyer, who purchased lots four and five. “We may move here full time while the kids are in high school, though we’re not sure yet.”