In hearing its requested further breakdowns of two financial models on how to reimagine the future of the Wheeler Opera House Real Estate Transfer Tax, the Aspen City Council was unanimous in its decision for next steps: More information is needed.
That information, however, pertains to potential other causes that could be benefactors of future RETT funds, not necessarily which financial pathway to curtailing the continued growth of the $33 million Wheeler Opera House Fund would, in councilmembers’ estimations, best serve the community.
Of the five initial options Pete Strecker, city of Aspen finance director, presented during a May 3 city council work session, council members expressed most interest in learning more about two. One would continue funneling the 0.5% RETT toward the Wheeler Opera House Fund, as was the initial intent of voters when they passed the RETT — as well as setting aside not more than $100,000 for arts grants — in 1979. But only for the initial $2 million collected; any funds beyond that would then be available for allocation toward other community needs, such as child care, storm water infrastructural needs, general and mental health resources and arts organizations’ needs.
The other option continues to dedicate RETT funds to the Wheeler Opera House, but allows any revenue that the venue brings in from programming and facility rentals to then address those same outside community needs. Either option would remove the $100,000 cap on arts grants and would require a ballot measure that garners 60% voter approval. But whereas the first option would also mandate voter approval for reallocating RETT funds, where Wheeler revenue goes would be an administrative decision, so long as voters approved the new model.
Councilmember Skippy Mesirow had not been in attendance during the previous work session at which the initial options were presented, but after hearing the details, he was clear in his preference.
“I’m definitely on the spend-down-the-balance side of the equation,” he said in reference to the first option, which would over an eight-year period leave the Wheeler fund with $17 million in reserves, more than three times its operating costs. “It’s just time. I need to better understand the needs, still. As long as we get to the right results, that’s fine.”
Councilmembers Ann Mullins and Ward Hauenstein also voiced their support for the option that allows reallocating excess RETT collections to other causes.
Of course, both options have pros and cons, Strecker cautioned. The first choice, for instance, could leave the city flush with extra monies — to the tune of $3.5 million in the eighth year, according to one projection — but only so long as the real estate market continues supporting tax transfers that exceed $2 million; otherwise, everything will go to the Wheeler fund with nothing left over.
That shouldn’t be a problem in general and especially not if the trends set in the last two years continue. In the last 11 years, the median intake for the Wheeler from RETT collections was about $4.5 million. In 2020, however, the total collection was more than double that number, at nearly $9.5 million.
“There are some years that were close to that [$2 million] number and there were years that were well away from that number, much higher,” Strecker said. “You’re not necessarily guaranteed, then, any money for expanded uses under Option 1.”
Councilmember Rachel Richards was in the minority during Monday’s work session in her support for the other option, preferring its flexibility. By being able to spend revenue earned by the Wheeler on outside causes rather than reallocating RETT funds, Richards maintained that the ballot language would be simpler for voters and would potentially create a financial structure that could serve the community in perpetuity, without the eight-year timeline.
“I could see that revenue stream lasting for future councils for 20 years, and not saying this is what we have to use it up in eight years, quick,” she said, adding that she also would like to see other entities, such as Pitkin County, contributing to tackling some of the larger issues such as child care.
Richards said she felt strongly that a ballot question asking voters to change the direction of the RETT funds would require more tighter language about exactly how they’ll be used. Either way, everyone agreed that the upcoming November election was too early and would net lower turnout than future opportunities to take any question to the electorate.
“I could see this ballot question, it starts to get really long and it starts to get very binding. I think you have to get detailed in there,” Richards continued.
In Strecker’s analysis, though, he acknowledged one potential drawback from the revenue-driven model: It could have implications for artistic programming decisions, as there could be pressure to choose programming that will drive the highest ticket sales instead of diverse, lesser-known productions.
One thing not on the list of needs for consideration that Mesirow made sure didn’t fall off the radar was housing.
“I’m frankly very surprised to not see housing on the list, and I want it to be on the list. We can’t keep our arts organizations running with additional funds if we have no employees,” he said.
Councilmembers agreed they didn’t need a full presentation dedicated to learning more about housing needs in the community, although there was some disagreement about how that could look — more general affordable housing as opposed to artist housing or something in between. They did hear from Kids First leadership Monday evening regarding child care; presentations on stormwater infrastructure, healthy community and arts organizations are slated for future work sessions through June and potentially early July.
“I just want to make sure there’s a specified time to discuss it in relation to other things,” Mesirow said of the housing question.