With the Aspen Music Festival and School having canceled its annual summer event due to COVID-19, the Aspen City Council will consider another use for the Marolt Ranch seasonal-housing units that would normally be occupied by AMFS students from June though August.
The topic of leasing the units for mainstream local affordable-housing purposes is expected to be discussed at a council work session that starts today at 4 p.m. The discussion also will include a request from Music Associates of Aspen — the nonprofit that leases the space every summer to provide the students with housing — to waive its 2020 lease payment of $500,000 for the city-owned complex.
City staff is supporting the request. According to a memorandum to council members from City Manager Sara Ott and Finance Director Pete Strecker, officials reviewed the terms of the lease “and find that it is reasonable to grant a one-year waiver to MAA given the highly unusual circumstances necessitating the cancellation of the 2020 festival.”
The memo notes that the $500,000 waiver would mean a direct reduction in revenue that goes into the city’s Marolt Affordable Housing Fund. While that’s considered “a significant sum,” the memo says, “the city is in a position where it can consider this full waiver as the Marolt property is in a net cash positive position each year.”
The debt service on the property retired three years ago and annual rents now exceed operational and capital expenses, according to the memo.
“Also, while this waiver would have temporary impacts from foregone revenues, city staff anticipate that some or all of this revenue could be made up through summer leasing to other parties,” the memo says. “The city has received interest from nonprofit, for-profit and governmental entities [for the units].”
A related memo to councilmembers from other city staffers outlines leasing options for Marolt Ranch, which has 97 units, 94 of which are included in the agreement with the nonprofit MAA, an entity that supports the music festival and school.
Most units include two rooms that can function as bedrooms or common areas, a full bathroom and a basic kitchenette. They are designed to accommodate up to three residents. Based on the MAA lease, the 2020 summer rental rate is equivalent to $1,653 per month, plus utilities.
During the fall, winter and spring, the units typically are leased out for local affordable-housing purposes. The residents who lease the property from September though April have leases that expire on April 30 so that the units can be readied for the arrival of music students in June. This year, with the festival’s cancellation, existing tenants who wanted to pay to stay through May — buying more time to ride out the COVID-19 situation — were allowed to do so.
The memo states that currently, 77 units are vacant and undergoing the process of disinfection to allow them to be turned over for summer rentals. Those units are estimated to be ready for summer leasing by mid-June. “The remaining 20 units have leases ending May 31 and would be disinfected and possibly ready for summer leasing at the end of June,” the memo says.
For winter-season rentals, the Aspen-Pitkin County Housing Authority manages the Marolt Ranch qualification process with local employers and tenants, using income-based and employment criteria, the memo says. APCHA also serves as the year-round manager of the property.
A question that city staff will pose to council is whether income-based and employment criteria should be used for any summer lease options. “APCHA would need to perform this function, although typically it does not perform it for the summer season at Marolt,” the memo adds.
Of three provided options, staff prefers the third alternative, which involves offering a combination of summer-only leases and nine-month leases.
Historically, about 48 of 97 units are reserved by specific employers, including Aspen Skiing Co. What’s not known is how many units will be needed by employers for the upcoming winter season given the uncertainty surrounding COVID-19 and its potential effect on the winter economy.