The city of Aspen has terminated a contract with a Centennial-based contractor early because of its “poor performance” on the Old Powerhouse renovation project.
The $2.5 million agreement with A.D. Miller Services that Aspen City Council approved in July for the remodel of the city-owned Old Powerhouse building has been broken off. Rob Schober, the city’s capital asset director, declined to provide specifics about A.D. Miller’s performance on the project, but said the city was not pleased with the timeline of work, among other things.
“We weren’t happy with them, and they weren’t really performing to what their contract said,” Schober said.
The city entered the contract with A.D. Miller in July to renovate the building off North Mill Street, including restoring the masonry of the exterior, constructing a new roof, replacing non-historic windows and doors, and adding new heat pumps. The project was approved as part of the city’s 2025 budget.
Several city departments and the Aspen Chamber Resort Association moved out of the city-owned building off North Mill Street ahead of the construction that Schober said began in August. Most departments set up shop in Armory Hall; they are scheduled to relocate to the Old Powerhouse once the project is complete.
Construction on the $53.7 million Armory redevelopment project relies partially on completion of the Old Powerhouse project to allow the capital asset, information technology, transportation and special events departments to move into the renovated building. The Old Powerhouse project should be completed by July, Schober said, and an agreement with a new contractor is expected to be approved at Tuesday’s council meeting.
The Old Powerhouse project was supposed to be completed as early as the end of this month, according to a project schedule from A.D. Miller. The contractor had only completed the interior demolition, installation of a new sewer line to the exterior of the building and the historic masonry and window restoration, according to a memo sent to council.
That work was scheduled to be completed by mid-September, according to the project schedule.
The majority of the project has not been completed. Council members will be asked to approve a preliminary $203,911 contract with A2 Associates LLC, a local firm, during its regular meeting Tuesday night. The contract will allow A2 Associates to pick up subcontracts originally under A.D. Miller’s scope of work, and continue working on parts of the renovation, like adding new heat tape, snow fences and heat pumps in the building.
City council will review a full contract with A2 Associates for the remainder of the project in early 2026, Schober said. The contractor was the city’s second choice of six applicants that responded to a request for proposals for the Old Powerhouse project.
“If we get the big piece of the contract awarded and they can start right after Christmas time, they should be wrapped up by a July timeframe at the latest,” Schober said.
According to the contract with A.D. Miller, the city could terminate the contract if the contractor repeatedly refuses or fails to supply enough properly skilled workers or proper materials; fails to make payments to subcontractors or suppliers; repeatedly disregards applicable laws, statues, ordinances, codes, rules and regulations or lawful orders of a public authority; or is otherwise “guilty of a substantial breach” of the contract.
The city did not pay A.D. Miller a termination fee, Schober said.
A representative from A.D. Miller said the project encountered “significant challenges.”
“The project encountered significant challenges associated with delay in permit approval and existing conditions due to the historic nature of the project,” Sarah Flicker, marketing manager for A.D. Miller, told the Aspen Daily News in an email. “While we remained committed to the project, the city of Aspen elected to terminate the contract for convenience. We value the relationship with the city of Aspen and look forward to our continuing working relationship on current and future projects.”
The city originally chose A.D. Miller because the contractor “provided the most professional and detailed proposal, showing careful thought and consideration to this project and its specifics,” according to a July 8 memo about the $2.5 million contract. The city had not worked with A.D. Miller before, Schober said, but according to the memo, they received positive feedback from a current city capital asset staff member.
A.D. Miller also submitted one of the least expensive bids.
“Staff feel comfortable recommending that A.D. Miller Services is the right choice to contract with as they have the required resources and experience for successful project delivery,” the July memo states.
The Old Powerhouse project was once proposed to be a much larger redevelopment that would have cost the city $10 million to $12 million to complete. For years, city council discussed plans to redevelop the Old Powerhouse into a community gathering space.
City staff previously proposed converting the upper level of the building to city offices while making the lower level a shared community space. But as talks to redevelop the Armory into a community gathering space ramped up — and as construction costs rose — former City Manager Sara Ott told council members in October 2024 that the city would need to shelve plans to redevelop the Old Powerhouse as a community space if the Armory project was going to be a higher priority.
Construction on the Armory is scheduled to begin in fall 2026.