Aspen’s city manager, taking the unusual step of weighing in on a pending development application, is recommending that the city council either deny a proposal from the Gorsuch Haus and Lift One Lodge project teams to fund portions of the Lift One corridor renovation using public dollars, or proceed carefully on a limited basis with clearly defined expectations.
Steve Barwick, Aspen’s long-tenured city manager, drafted a five-page memo that is included in city council’s packet for tonight’s meeting, which is the second public hearing on the two hotel projects and overall corridor plan. The two hotel developers and the Aspen Skiing Co. are proposing to remake the western portal to Aspen Mountain. The Gorsuch Haus, on the site of the existing Lift 1A bottom terminal, would be an 81-key, 64,000-square-foot hotel. The Lift One Lodge, on the site below Gorsuch Haus, would measure to 107,000 square feet with 104 keys and includes a renovation of two historic buildings, one of which would be relocated to Dean Street and converted into a ski museum run by the Aspen Historical Society. Both hotels include underground parking, with 50 spaces beneath Gorsuch Haus set aside for the public.
SkiCo, contingent on approval of the lodging projects, would build a new chairlift along the Lift 1A alignment, starting 500 feet farther down the hill from the existing bottom station. A return skiing corridor would go between the Lift One Lodge’s two planned buildings and make use of the adjacent Dolinsek parcel, which the city acquired in 2015 from a local family for open space and conservation purposes.
Barwick’s memo is mainly concerned with a cost-sharing proposal submitted by the developers that will be discussed at tonight’s meeting. The plan asks that the city contribute as much as $7.8 million to improvements associated with the corridor redevelopment, including construction of the ski museum, rebuilding impacted streets, new amenities in the parks that will be impacted by the plan and establishing a snowmelt system on South Aspen Street.
The memo also notes that the time frame for the council’s review of a project of this magnitude is condensed, due to a desire to put the plans before voters in the March municipal election. The vote is necessary because of impacts to city parks and zoning considerations related to the two hotels.
“In the normal course of business during the public review of development proposals within Aspen, a wide variety of opinions get expressed,” Barwick’s memo says. “Given a normal review process, virtually all possible opinions are expressed and are available for consideration by city council. Under such typical circumstances it is unnecessary for city staff to introduce new points of view. However, the compressed time frame of the current proposal for the Lift 1A area has not allowed for the full expression of Aspen’s notoriously strong and varied opinions to become public. It is due to this compressed time frame that I offer the following comments. All opinions stated are mine.”
City council is expected to hold at least one more public hearing on the Lift One corridor plans on Dec. 3, with another potential meeting on Dec. 10. If the plans are to be included on the March ballot, language for the ballot question must be finalized no later than Jan. 14.
Ski museum ‘hot potato’
The developers are proposing that of an estimated $4.5 million they will pay in city building permit and impact fees for the two hotels, 80 percent — $3.6 million — be dedicated to the relocation of the Skiers Chalet building from two blocks up the hill and its renovation into a ski museum.
Moving and converting the Skiers Chalet was included in a 2011 approval for the Lift One Lodge. That plan did not include the lower chairlift alignment and is being amended to accommodate the reworked site plan.
“For most people in this community there is an easy case to be made for a ski museum,” Barwick’s memo says. “It would be a prominent place for display of items that remind us of where our local ski industry started and the major steps in our path to Aspen’s current place in the world. … The case for a ski museum was made all the easier when the funding responsibility for its construction was agreed to as part of the Lift 1A development’s existing approval ordinance.
“The latest proposal for development of the Lift 1A area has tossed the ski museum’s expenses like a hot potato to the city of Aspen. No longer is the ski museum a ‘no-brainer’ … . Now the community is faced with the possibility of associated trade-offs if the museum is built.”
City funding for a ski museum would have to compete with other capital projects the city is pursuing, including expansion of the Aspen Recreation Center fitness facilities, various sidewalk expansion projects and over $16 million of storm water projects, Barwick noted.
“To date, neither staff nor city council has [had] discussions on the relative merits of a historic ski museum and how it ranks among the many other requests for funding,” Barwick’s memo says.
Barwick also anticipates developers’ arguments in favor of their proposed city funding mechanism and offers counterpoints.
“It is likely that an argument will be made that the project’s planning and building fees can be redirected toward the [public/private partnership] without any impact to the city’s budget since they are ‘incremental’ in nature,” Barwick’s memo says. “That is, the fees will never become revenue to the city unless the project proceeds and therefore future budgets are not dependent upon these specific revenues.
“While this argument contains an element of truth, it misses two important points. First, the size of this proposal will have significant direct effects upon the expenses of the planning and building department budgets for the next several years. Both staffing levels and direct expenses such as outside plan review expenses will be impacted by this proposal. Secondly, the ‘incremental’ revenue argument can be made for every development application – from the smallest remodel to a major development such as this. Each project creates expenses within city operations and is expected to pay for such expenses through its fees.
“Exemption from fees (or the “dedication” of such fees to project-related expenses) should be viewed as a transfer of city expenses to all other future development proposals. Any representation that fees from this development are ‘unneeded’ is unfounded.”
Representations viewed with skepticism
The city calculates that the total public cost sought under the developers’ proposal is as much as $7.8 million or more. That includes the $3.6 million toward the ski museum, $1.5 million for park improvements including new restrooms at the base of the ski hill, $760,000 toward the reconstruction of Dean Street — which will become the lift portal’s front door — and $2 million or more for a snowmelt system on South Aspen Street.
“The notion of a public/private partnership for this potential redevelopment has evolved and expanded dramatically,” Barwick’s memo says. “The city previously helped fund studies regarding lift alignment and has dedicated a great deal of staff time to date. Such efforts are commonplace in Aspen’s history whenever important projects are proposed. However, this proposal has now evolved into a request for major public funding of several aspects of the redevelopment. Such funding is not typical in Aspen’s history and deserves more discussion.”
He adds, “Representations have been made that significant public funding participation is needed for the proposal to move forward. I have heard such representations throughout my career and have come to view them with a great deal of skepticism. … The costs and value of this specific proposal are of such a magnitude that denial of the $7.8 million being requested as a public contribution is unlikely to constitute a critical obstacle.”
Barwick’s memo concludes with his recommendation that “the developers of these projects be required to pay their full fees in the same manner that is expected of all other developments.”
“Should city council decide to financially participate in any aspect of the project, the city should budget for such expenses through its regular process,” Barwick’s memo says, meaning that the fee-dedication methodology should be replaced with a more transparent accounting of public costs.
“The proposal to ‘dedicate’ fees for portions of this project creates an appearance that there is no real government expense,” the memo continues. “These types of targeted ‘off book’ revenue reductions are favorites of federal legislators because they are less visible to the voting public than line items in an expense budget. This approach should never find its way into city of Aspen financial practices for significant development proposals.”
Concerns melt away with a special taxing district?
The city’s engineering and streets departments have concluded that the increased traffic on South Aspen Street generated by the two hotels will necessitate increased measures to maintain public safety beyond the typical plowing and sanding approach, mainly due to the road’s steep grade.
Salt-based de-icing of the road could be a strategy, as could building a snow melting system beneath the roadway.
“At this point, costs of installing and operating such a system from the top of South Aspen to Durant Street are not fully defined,” says a memo from the city planning office. “Due to the significant energy demands of such a system, it has been proposed that the system utilize electric heating and be tied to city of Aspen renewable energy sources.”
The efficacy of such a system needs to be explored further, the staff memo says. It asks that city council provide general direction on the concept so developers “can better evaluate the range of alternatives and the mechanisms for funding the capital and operating costs of the best alternative.”
A special taxing district or metropolitan district could be formed to fund a snowmelt system, as well as other aspects of the project. Creating such a district — where property owners within its boundary pay increased assessments for specific purposes benefiting the district — would be a complicated undertaking with many variables, according to city staff, but those details could be worked out after the public vote.
Barwick’s memo says that the funding for a snowmelt system, if one is desired, needs to be worked out with council’s involvement.
“In my opinion, any need for such a system is a direct result of the much higher vehicular traffic loads generated by these hotels,” Barwick’s memo says. “Therefore, the costs of constructing and operating such a system should be the responsibility of the developers.”