The Aspen City Council wants to take a new look at its development regulations in hopes of finding a way to nudge stalled projects along and minimize the amount of vacant “eyesores” of empty buildings around town.
The city council reviewed the status of several prominent developments — most of which are owned by Mark Hunt and several of which have sat mostly untouched for nearly 10 years — during a work session on Monday. The developments are likely stalled for multiple reasons, Aspen’s Community Development Director Ben Anderson said, but in some ways, the city’s hands are tied in moving them forward.
“This is the most frustrating part of [Aspen Chief Building Official] Bonnie [Muhigirwa] and I’s work, is this topic and it’s confounding to us,” Anderson told the city council. “We work on it every day, and in spite of those best efforts, I think these projects continue to be of concern, and rightfully so.”
Anderson and Muhigirwa updated council members on the Aspen Club and Spa, the Buckhorn Arms Building, the Boomerang building, 404 Park Avenue, the former Bidwell building (including the Red Onion), the former Crystal Palace building and the Lift One corridor development. All but the Aspen Club and Lift One have ties to Hunt.
Some of the projects — the Aspen Club and Spa, Crystal Palace and the former Bidwell building — have active building permits, but have been subject to concerns over their progress. The Aspen Club and Spa was originally permitted in 2014 but is most recently awaiting an approved change order.
Progress is underway at the Crystal Palace building, but it has been “a difficult and very impactful project to say the least,” Anderson wrote in a memo to city council.
The Crystal Palace project first obtained a building permit in 2017, made progress, and then came to a halt. The permit was formally extended in 2019, but a change order was submitted that required amended approvals from the Historic Preservation Commission. The city is waiting on an application for an interior finish permit for the space, which is being developed into a boutique hotel called the RH Guesthouse, an RH Bath House and Spa and a restaurant, cafe and rooftop terrace.
It is part of a larger RH-Hunt endeavor dubbed the “Aspen Ecosystem.”
A permit for the former Bidwell building at 434 E. Cooper Ave. was first issued in 2020, and core and shell work was completed on the Red Onion side of the building. While work on three of the tenant spaces between 420 and 434 E. Cooper Ave. has been completed, including the Paul JAS Center, the Red Onion is still in limbo. Hunt has not yet submitted a permit for the interior finish of the Red Onion, and the restaurant has sat vacant since December 2020.
But the work on the exterior of the Bidwell building is nearly complete, and the city hopes the construction activity encroaching on Galena Street and Cooper Avenue will soon be removed or reduced. Hunt is developing the building into an RH Design Gallery with retail and dining.
Other projects — 404 Park Avenue, the former Boomerang building and the Buckhorn Arms building — are anticipating redevelopment, but are currently sitting in a “dilapidated state.” The city’s community development staff have on several occasions encouraged demolition of some of the buildings.
The 404 Park Avenue property received development entitlements for a 28-unit affordable multifamily housing project by the building’s previous owner, Peter Fornell. He pursued a building permit based on those approvals that was ready for issuance, but was never picked up, and the project has been vacant for more than five years after Fornell sold the building to Hunt.
As it stands, the city routinely checks to make sure the building isn’t posing a health or safety risk, “but acknowledge that it could not be more of an eyesore for the neighborhood,” Anderson wrote in the memo. The project, as previously approved, could be initiated on a very short timeline using the previous permit application. But according to the memo, city staff recently prepared an updated pre-application summary for a new affordable housing project, and it is unclear how far a new project would depart from the previous proposals.
The city’s historic preservation staff and chief building official recently pursued a demolition by neglect finding for the Boomerang building on 500 W. Hopkins. Since then, the site has been better secured to prevent further degradation, but the property currently doesn’t have valid land use approvals or a building permit. On Feb. 23, the city received a request from the property owner for a preapplication summary for a new proposal.
The former Boomerang building is being eyed as the residential component for Hunt’s “Aspen Ecosystem” project.
The Buckhorn Arms Building at 730 E. Cooper Ave. has received “considerable community comment about its physical condition since the commercial tenants were vacated more than three years ago,” according to the city. It is another property owned by Hunt that he wants to redevelop into a hotel called Base Lodge. The property, which has seen several iterations over the years, would have below-ground parking and will involve a car elevator serviced by valet parking off of the alleyway, Anderson told the city council.
A building permit has been in review since 2020 and permit issuance is imminent.
The city’s land use code and building permit application process is complicated and sometimes lengthy, Anderson said. Change order requests also further delay the projects, and nearly every project the city council discussed on Monday had at least one significant change order, if not more.
Aspen’s high property values, the cost of development and affordable housing development requirements baked into the city’s land use code all have a hand in stalling some of these projects, Anderson said.
“I think that there are lots of qualities that all of our regulation and those approvals grant to the community,” Anderson said. “Being nimble to the ebbs and flows and realities of construction projects is not one of the qualities that is built into Aspen’s regulatory system, and there is, as we’ve talked about, huge amounts of change and every time one of those changes happens, we’re unwinding a very specific approval or a very specific code regulation.”
Such is the case with the Buckhorn Arms building, which has gone through six years of permit review and has faced delays in response to some of the proposed changes, Anderson said.
Other underlying causes could be Aspen’s connection to national or global brands with dynamics outside of the city’s control or influence impacting development or significant affordable housing mitigation requirements for developments.
Regardless of the reasons behind the stalled projects, council members were desperate to find a solution for what they said has been one of the biggest community concerns for years.
“We have several buildings in the downtown core too, which have been under construction for nearly 10 years,” Councilman John Doyle said. “I think as a tourist destination that’s relying on the tourist economy, that’s not a good look for our city, and I think 10 years of having vacant buildings is too long, and I’d like to avoid that at all costs.”
Council members wanted to look at both carrot and stick approaches.
Councilman Bill Guth pointed out that a majority of the projects of concern come from one developer, and any new regulations likely wouldn’t make much of an impact on most of those projects.
“I think, first of all, it’s important to remember that all but one of these projects … are from the same group of people with very unique circumstances that I’ve never seen anywhere else, Aspen’s never seen, [and] don’t seem to make a lot of sense on the surface level, at least, why they’re the way they are,” Guth said in reference to Hunt. “And I think we should keep that in mind, because I don’t think that we want to regulate around one very specific set of circumstances and cause more trouble than we’re solving.”
Anderson and Muhigirwa discussed several options for regulating the issue, but also told the city council that it is difficult for a city to impose some restrictions on private development, especially after land use approvals or building permits have been issued. The community development department has investigated completion bonds, a commercial vacancy tax, imposing significantly higher temporary encroachment fees and more.
Developers must pay encroachment fees whenever their construction work imposes upon any public right-of-way. For example, the encroachment fees for the former Crystal Palace’s construction staging area along Monarch and Hopkins streets is nearly $330,000 per year.
The city has also explored expiring building permits, which city staff said would be legally problematic unless the project did not meet requirements for keeping a building permit active, or setting fixed construction timelines as part of a project’s approval, which would also run into private property rights questions.
It is also unclear if any of the potential actions would meaningfully speed up development timelines.
“Several of these, again, whether they be encroachment fees or expiring building permits or vacating land-use approvals, they’re punitive in nature … The question is, does it translate into the project being completed on time or sooner,” Anderson said. “And I think staff has questions about each of these things, about whether they would really move the needle.”
Guth was wary of some of the community development departments’ proposed solutions. But he suggested exploring a demolition by neglect provision and requiring all properties to have “Aspen-level standards for maintaining exterior property, like they do in a [homeowner’s association].” He also suggested stricter response timelines for both the city and an applicant when someone is pursuing a building permit, and varying costs for change orders of different magnitudes.
Mayor Rachel Richards suggested subjecting projects that have not begun construction by the time their vesting rights expire to higher affordable housing mitigation requirements.
Councilwoman Christine Benedetti asked Anderson to explore what made lodging projects like the Mollie Aspen and W Aspen move so quickly. Both of those projects went through “significant land use approval processes, both of them came for change orders, both of them had land use approvals that were necessary to accommodate those change orders,” but, once they started, the owners wanted the projects up and running and pursued a more typical construction schedule, Anderson said.
Most council members agreed the city should look at more incentives for private developers, but Benedetti said that while that’s often how the city wants to operate, “seeing as the free market is not incentive enough for this property owner or some like ones, I think that we should be doing something bold on this.”
Richards also suggested that perhaps the solution is slowing down construction growth where appropriate at a council level.
“I think that when we look at the amount of construction going on in town, the remodelings to residential, the county surrounding us, what we’ve been experiencing in our downtown core, I don’t know that we want to keep that engine open and that door open that says, ‘Bring us more projects,’” Richards said.
While the city has yet to determine the best way to address the community’s concerns about languishing construction projects across town, Anderson said the city is still actively searching for solutions. City staff tries to be flexible within the city’s current codes to keep projects progressing.
“Staff is not resigned to this dynamic,” Anderson said. “We are constantly trying to figure out how to respond, but we are pretty constrained by basic property rights, statutory and common law vesting, and then, you know, inefficient, not particularly nimble land use and building code provisions.”
Hunt did not respond to a request for comment for this story.