Loading...
HomeMy WebLinkAboutcoa.lu.ca.Fractional Ownership.A046-02.~. ~, -.~. •-. ... x- City of Aspen Community Development Department CASE NUMBER A046-02 PARCEL ID NUMBER PROJECT ADDRESS PLANNER Joyce OhLsen CASE DESCRIPTION REPRESENTATIVE Cuthbert L. Myrin, Jr. DATE OF FINAL ACTION 4/24/02 CLOSED BY Amy DeVault Section 1• That Chapter 26.590 be repealed and re-enacted to read as follows: Chapter 26.590 TIMESHARE DEVELOPMENT 26.590.010 Purpose and Intent. The purpose of this chapter is to establish the procedures and standards by which timeshare development may be permitted within the City of Aspen. It is the City's intent to establish timeshare regulations that provide for the protection of the character of Aspen as a resort community, and that help to promote increased tourism and vitality within the City. Specifically, the City intends that new timeshare projects in Aspen will implement the goals of the Aspen Area Community Plan, and will help to achieve the following public purposes: A. Increased Vitality. Timeshare developments can provide the opportunity for increased tourism to Aspen, can add to the level of community vitality, and can help to create a more sustainable local economy. This can be accomplished by expanding the number and variety of "hot beds" available to visitors, raising occupancy levels in the accommodations sector, and attracting "new trials" to Aspen, from persons who have not previously visited this community. B. Preserve and Enhance Lodging Inventory. Aspen's tourist accommodations inventory has for some time included a significant percentage of traditional lodges. The community would like to preserve and enhance this lodging inventory, by encouraging timeshare units to be contained in projects that look and operate in a manner similar to Aspen's traditional lodges. These regulations have been designed to accomplish this purpose by establishing standards for the physical and operational features of timeshare lodges, to ensure that new and re-developed timeshare lodges maintain Aspen's lodging traditions. C. Upgrade Quality of Accommodations. It is important to Aspen's tourist economy that its accommodations are kept up-to-date. Timeshare development offers the opportunity to infuse capital into the short term accommodations inventory, so facilities can be modernized. It is equally important to ensure that once facilities are upgraded, the facility is managed to provide a quality visitor experience over time. These regulations are intended to ensure that timeshare lodges are properly maintained over the life of the development. D. Maintain Community Gcaracter. Aspen has a valued reputation as a quality resort community. The City intends to regulate timeshare marketing and sales practices, to ensure that the way timeshare units are marketed and sold is consistent with the 2 character of this community, and to minimize the potential for practices that would create an inappropriate image of Aspen. 26.590.020 Applicability and Authority to Grant Variations. A. Applicability. The requirements of this Chapter shall apply to all timeshare development within the City of Aspen. These requirements shall be in addition to all other applicable requirements set forth in this Title 26, and those set forth in the Colorado statutes. B. Authority to Grant Variations. Variations from the provisions of this Chapter may be authorized by the City Council. An applicant requesting a variation shall demonstrate that the provision requested to be varied is not applicable to the proposed development or cannot be met, and shall demonstrate that the proposed variation is reasonable, would not be contrary to the public interest, and better implements the purpose and intent of these timeshare regulations than the codified requirement. 26.590.030 Zone Districts in Which Timesharing Shall Be Permitted. .~ Timesharing shall be allowed as a permitted use in the Lodge/Tourist Residential (L~I'R), Commercial Lodge (CL), and Lodge Preservation Overlay (LP) zone districts. 26.590.040 Procedure for Review of Timeshare Application. A. PUD Review Required. All timeshare development shall be processed as a Planned Unit Development (PUD), pursuant to Chapter 26.445 of this Code. B. Consolidated PUD Review. The Community Development Director may determine that because a timeshare development is a conversion of an existing building, or because of the limited extent of the issues involved in the proposed development, the four step PUD review process should be consolidated into a two step review, pursuant to Section 26.445.030 B.2, Consolidated Conceptual and Final Review. Development of a timeshare lodge in the Lodge Preservation Overlay (LP) Zone District shall be processed as a two step review, pursuant to Section 26.445.030 B.3. The Community Development Director is also authorized to waive those PUD submission requirements from Section 26.445.060 and review standards from Section 26.445.050) that the Director finds are not applicable to a proposed timeshare development. C Subdivision Review. Timeshare development shall also require subdivision approval. Review of the subdivision application may be combined with final PUD review, as authorized by Section 26.304.060 B., Combined Reviews, and by Section 26.445.030 B.4, Concurrent Associated Reviews. D. Growth Management Quota System Review. Whenever a proposed timeshare development is subject to review under the City's Growth Management Quota System (Chapter 26.470), the development shall be considered a "Tourist Accommodation" or a "Lodge" for purposes of competition or exemption from the System. 26.590.050 Contents of Application. In addition to those application contents for PUD and subdivision, the development application for timeshare shall include the following information: A. Timeshare Use Plan. A detailed description of the basic elements of the proposed timeshare use plan. The use plan shall describe the number of estates being created in each unit, the total number of estates to be created, the expected price for each estate, and whether a purchaser is buying a specific unit for a specific time, a specific unit for a floating time, or whether there is no specific unit but just a specific time. It shall also describe whether owners will be able to participate in an exchange program, and if so, in which program(s) they will be eligible to participate. The use plan shall also provide a specific description of how the development will comply with the requirements of Section 26.590.060, Characteristics of a Timeshare Lodge. B. Summary of Disclosure Statement and Timeshare Instruments. A detailed summary of each of the key points that will be included in the disclosure statement and the timeshare development instruments (see Section 26.590.090) if the project receives approval from the City. C. Marketing Plan. The marketing plan for the timeshare development, including information on proposed sales techniques (including a description of gifts, premiums, or promotions to be offered), sales packaging, and whether a sales office will be established off-site. D. Budget. A thorough account of the proposed homeowner's/condominium association budget, giving a true indication of proposed costs and expenditures. E. Upgrading Plan. For any existing project that is proposed to be converted to a timeshare development, the applicant shall submit a plan of how the project will be physically upgraded and modernized. F. Tax Collection. A statement indicating the manner in which real estate transfer taxes and sales taxes will be collected. 26.590.060 Characteristics of a Timeshare Lodge Development It is the intent of the City of Aspen that all timeshare developments incorporate some of the physical and operational features that are typically found in lodges in Aspen. The City 4 _, recognizes that each timeshare development is unique, and that each development should not contain all of these features. In fact, considering the proposed location of the development and the intended method of operating the facility, certain of these features may not be appropriate. The City also recognizes that when owners occupy their units, the development will operate more like a private residential complex than like a lodge. But the City seeks to balance that form of use with opportunities for other guests to use the facility. Therefore, the City has identified a menu of timeshare lodging features, including both mandatory and optional elements. All timeshare developments shall incorporate the mandatory physical and operational features listed herein. Provided however, that an applicant may propose to instead substitute optional operational features for one or more of the mandatory features listed herein, or may propose its own set of features which ensure that the development operates in a manner similar to a lodge when the owners are not using their timeshare interests. A. Physical Elements. 1. All timeshare developments shall be managed on-site, with a front desk that is located within a lobby that is sized to meet the needs of the project. If the timeshare lodge is part of a multi-site development, there may be a single ~ front desk for these sites. The front desk shall be open at least during regular business hours, and shall be managed to provide full-time registration and reservation services, including provision for late check-in and for other off- hours guest needs. The front desk shall accommodate walk-in rentals. 2. The planned timeshare development shall contain a sufficient level of recreational facilities and other amenities to serve the occupants, including appropriate facilities for both the winter and the summer seasons. B. Mandatory Operational Practices. The City wants to ensure that the units in a timeshare development are available for rental to the public when they are not being occupied by the owner or the owner's guests. The City has identified certain operational practices that will accomplish this intent, which are listed in this section. An applicant who agrees to include all of the practices listed below in the operation of the timeshare development shall be deemed to have complied with this intent. The City recognizes, however, that there may be other ways to comply with this intent, and will consider these and other operational practices. Applicants may propose to substitute one or more of the optional practices listed in Section C., below, for one or more of the mandatory practices listed in this Section B. Applicants may also propose other operational practices not listed in Section C. as a means of demonstrating compliance with this standard. Acceptance of the proposed optional practices as a substitute for one or more of the mandatory practices shall be at the sole discretion of the City Council. 5 PM, 1. Timeshare estates shall be made available for short-term rental in a managed program when the estate is not in use by the owner of the unit or the owner's guests. The purchasing disclosure documents shall state that the purchaser must sign an agreement with the management company to rent the estate when it is not being occupied by the purchaser or guests. 2. The covenants of the homeowner's association shall permit walk-in rental of units. The association shall not limit rental of units to such arrangements as only weekly rentals or Saturday-to-Saturday rentals; instead the association shall permit shorter stays, split-week rentals, and similar flexible arrangements. 3. Owners of timeshare estates shall be required to reserve their unit/time sufficiently far in advance to enable the public to obtain access to those units that are not so reserved. jt 4. The owner of a timeshare estate shall not be permitted to occupy that estate for any period in excess of thirty (30) consecutive calendar days. 5. The units that remain in the developer's inventory shall be made available for rental to the public while the interests are being sold, except for models and other units that are needed for marketing or promotional purposes. 6. Units that are available for rental shall be listed at competitive rates in a central reservation system. Listing of the unit with a recognized central reservation system in Aspen, or through the central reservation system of the company that will manage the timeshare development, is preferred. C. Optional Operational Features. 1. Timeshare developments that subdivide each unit into a larger number of interests (more than 10 interests per unit) are preferred to those which subdivide each unit into a smaller number of interests (less than 10 interests per unit). 2. Applicants may formulate their timeshare use plan such that the purchaser would not purchase an interest in a particular unit and would not expect to occupy the same unit each visit; instead the purchaser would purchase the right to occupy a certain type of unit for a certain period of time. Applicants may also include provisions in the homeowner's association documents prohibiting owners from personalizing the unit they have purchased. 3. Applicants may design their development as a mixed project, which includes not only timeshare units, but also some units that would continue to be owned and operated by the applicant and his successors or assigns as traditional 6 lodge units. Another type of use plan that is encouraged would be for the applicant to agree not to sell all of the shares in every unit, but to instead keep some time reserved for rental to the public at market rates during both the high seasons and the off-seasons. 4. Applicants may decide to sell on and off-season estates as a package. 5. Applicants may include in their use plan provisions that allow for a wide range of exchange opportunities for owners, which will promote new Aspen trials. 26.590.070 Review Standards for Timeshare Development. The following standards shall apply to the review of any timeshare development. These standards are in addition to those standards applicable to the review of the PUD and Subdivision applications. A. Fiscal Impact Analysis and Mitigation. 1. Any applicant proposing to convert an existing development to a timeshare development shall prepare a fiscal impact analysis of the proposed development, which demonstrates whether there would be any negative sales, property, or other tax consequences to the City from the approval of the proposed conversion. The applicant shall, as a condition of approval of the timeshare development, be required to mitigate any negative tax consequences the project will cause. 2. The City of Aspen Finance Department has created a model which evaluates the tax consequences of a proposed timeshare conversion. The model evaluates the direct sales tax implications from having fewer days of occupancy by guests that pay sales taxes in a timeshare lodge as compared to a traditional lodge. The model also considers the indirect sales tax benefits that may accrue from increased occupancy in timeshare lodge units as compared to other types of accommodations within the City. Finally, the model considers any property tax implications due to the conversion of property that is assessed as a commercial use to property that is assessed as a residential use. Applicants shall meet with the City Finance Department before submitting their timeshare development application to review the model and to understand the factors the City will use in evaluating the tax impacts of their proposal. B. Affordable Housing Requirement. Whenever a timeshare development is required to provide affordable housing, the mitigation for the development shall be calculated by applying the standards of the City's housing designee for lodge uses. The affordable housing requirement shall be calculated based on the maximum number of proposed 7 lock out rooms in the development, and shall also take into account any accessory retail, restaurant, conference, or other functions proposed in the development. C Parking Requirement. 1. The parking requirement for timeshare development shall be calculated by applying the parking standard for the underlying zone district for lodge uses. The parking requirement shall be calculated based on the maximum number of proposed lock out rooms in the development. 2. The timeshare development shall also provide an appropriate level of guest transportation services, such as vans or other shuttle vehicles, to offer an alternative to having owners and guests using their own vehicles in Aspen. 3. The owner of a timeshare estate shall be prohibited from storing a vehicle in a parking space on-site when the owner is not using that estate. D. Appropriateness of Marketing and Sales Practices. The marketing and sale of timeshare units shall be governed by the real estate laws set forth in Title 12, Article 61, C.R.S., as may be amended from time to time. The applicant and licensed marketing entity shall present to the City a plan for marketing the timeshare development. 1. The following marketing and sales practices for a timeshare development shall not be permitted: a. The solicitation of prospective purchasers of timeshare units on any street, mall, or other public property or facility; b. Sales campaigns using phone solicitations; and c. Any unethical sales and marketing practices which would tend to mislead potential purchasers. 2. Giving of gifts to encourage potential purchasers to attend a sales presentation or to visit a timeshare development is permitted, provided the gift reflects the local Aspen economy. For example, gifts for travel to or accommodations in Aspen, restaurants in Aspen, and local attractions (ski passes, concert tickets, rafting trips, etc.) are permitted. Gifts that have no relationship to the local Aspen economy are not permitted. The following gifts are also not permitted: a. Any gift for which an accurate description is not given; 8 ,--. b. Any gift package for which notice is not given to the prospective purchaser that the purchaser will be required to attend a sales presentation as a condition of receiving the gifts; and c. Any gift package for which the printed announcement of the requirement to attend a sales presentation is in smaller type face than the information on the gift being offered. E. Upgrading of Existing Projects. Any existing project that is proposed to be converted to a timeshare development shall be physically upgraded and modernized. The extent of the upgrading that is to be accomplished shall be determined as part of the PUD review, considering the condition of the existing facilities, with the intent being to make the development compatible in character with surrounding properties and to extend the useful life of the building. 1. To the extent that it would be practical and reasonable, existing structures shall be brought into compliance with the City's adopted fire, health, and building codes. 2. No sale of any interest in a timeshare development shall be closed until a certificate of occupancy has been issued for the upgrading. F. Adequacy of Maintenance and Management Plan. The applicant shall provide documentation and guarantees that the timeshare development will be appropriately managed and maintained in an manner that will be both stable and continuous. This shall include an identification of when and how maintenance will be provided, and shall also address the following requirements: 1. A fair procedure shall be established for the estate owners to review and approve any fee increases which may be made throughout the life of the timeshare development, to provide assurance and protection to timeshare owners that management/assessment fees will be applied and used appropriately. 2. The applicant shall also provide documentation establishing the adequacy of a reserve fund to ensure that the proposed timeshare development will be properly maintained throughout its lifetime. G. Compliance with State Statutes. The applicant shall demonstrate that the proposed timeshare development will comply with all applicable requirements of Title 12, Article 61, C.R.S.; Title 38, Article 33, C.R.S.; and Title 38, Article 33.3, C.R.S.; including the requirements concerning the five (5) day period for rescission of a sales contract, and the procedures for holding deposits or down payments in escrow. 9 H. Approval By Condominium Owners. If the development that is proposed to be timeshared is a condominium, the applicant shall submit written proof that the condominium declaration allows timesharing, that one hundred (100) percent of the owners of the condominium units have approved the timeshare development, that all mortgagees of the condominium have approved the proposed timeshare development, and that all condominium units in the timeshare development will be included in the same sales and marketing program. I. Prohibited Practices and Uses. Without in any way limiting any requirement contained in this Chapter, it is unlawful for any person to knowingly engage in any of the following practices: 1. The creation, operation or sale of a right-to-use interest or any other timeshare concept which is not specifically allowed and approved pursuant to the requirements of this section. Right-to-use timeshare concepts (e.g. lease- holds and vacation clubs) are considered inappropriate in Aspen and are not permitted. 2. Misrepresentation of the facts contained in any application for timeshare approval, timeshare development instruments, or disclosure statement. 3. Failure to comply with any representations contained in any application for timesharing or misrepresenting the substance of any such application to another who may be a prospective purchaser of a timeshare interest. 4. Manage, operate, use, offer for sale or sell a timeshare estate or interest therein in violation of any requirement of this Chapter or any approval granted pursuant hereto, or cause or aid and abet another to violate any requirement of this Chapter, or an approval granted pursuant to this Chapter. 26.590.080 Business License and Sales Tax Payments. A. Business License. It shall be unlawful for any timeshare development to operate in the City of Aspen without first obtaining a business license in accordance with the standard procedures of the City of Aspen. B. Sales Tax Payments. Occupancy of any timeshare unit by anyone who pays a fee for the use of the unit (other than the owner thereof) shall be subject to the City's sales tax the same as if such occupancy were of a hotel or lodge unit. Any timeshare development, as a condition of its approval, shall be required to obtain an Aspen Sales Tax/L,odging Tax License, which shall establish how this tax shall be collected and paid to the City. The manager of the association shall be responsible for the timely collection of the City sales tax for the City of Aspen. 10 26.590.090 Timeshare Documents. At the same time the applicant submits the PUD Development Plan and PUD Agreement to the City for recordation, pursuant to Section 26.445.070, the applicant shall also submit the following timeshare documents in a form suitable for recording. The Planning Director may require the applicant to submit a draft version of these timeshare documents at the time of submission of the Final PUD application. A. Disclosure Statement. The applicant shall submit a disclosure statement that contains the following information: 1. The name and address of the developer of the timeshare development as well as a summary of the developer's business experience, including all background and experience in the development of timeshare development, and the present financial condition of the developer. 2. The name and address of the manager/management company for the development, if any, and a description of the manager's/management company's responsibilities, powers, duties, authority and business experience. All information on the manager's background and experience specifically related to timeshare development shall be provided. 3. The names and addresses of the marketing entity and the listing broker and a statement of whether there are any lawsuits pending or investigations that have been undertaken against the marketing entity or listing broker, and if so, a description of the status or disposition of said lawsuits or investigations. A summary of the marketing entity's business experience including all background and experience related to timeshare development. 4. A description of the timeshare units, including the developer's schedule for completion of all buildings, units, and amenities, with dates of availability. 5. If the timeshare plan consists of a condominium or a similar form of ownership, a description of the development and any pertinent provisions of the condominium instruments. 6. Any restraints on the transfer of the purchaser's interest in the timeshare units or plan. 7. The timeshare use plan, which shall include a description of the rights and responsibilities under the plan. 11 8. Notice of any liens, title defects or encumbrances on or affecting the title to the units or plan and, if there are encumbrances or liens, a statement as to whether, when and how they will be removed. 9. Notice of any pending or anticipated legal actions that are material to the timeshare units or plan of which the applicant has, or should have, knowledge. 10. The total financial obligation of the purchaser, which shall include the initial price and any additional charges to which the purchaser may be subject in purchasing the unit. 11. An estimate of the dues, maintenance fees, real property taxes, sales taxes, real estate transfer tax and similar periodic expenses, and the method or formula by which they are derived and apportioned, which shall include whether maintenance fees are determined by unit, time of year, or prorated share of the overall maintenance costs, or any other means utilized to compute maintenance fees. 12. A statement demonstrating the manner in which management/assessment fees will be held, utilized and accounted for. 13. A description of any financing offered by the applicant. 14. The terms and significant limitations of any warranties provided, including statutory warranties and ]imitations on the enforcement thereof or on damages. 15. A statement that the proposed development will comply with all applicable requirements of Title 12, Article 61, C.R.S. Upon request from the City, the applicant shall provide a copy of the documents submitted to the State of Colorado for the registration and certification of the timeshare developer. 16. The extent to which a timeshare unit may become subject to a tax or other lien arising out of claims against other timeshare owners of the same timeshare unit. 17. The minimum percentage of units the developer will require be sold before the developer will proceed with the completion of the timeshare development. 18. A description of the maintenance to be supplied to the timeshare development, including how and when such maintenance will be provided. 12 19. Whether any or al] the units in the proposed development will be available for participation in an exchange program. The applicant shall disclose which exchange program(s) the timeshare estate owners will be eligible to utilize. 20. A description of all insurance covering the property. 21. A description of the on-site amenities and recreational facilities which are available for use by the unit owners. All on-site amenities shall be owned by the homeowner's association and the developer shall not be allowed to charge any additional fees for use of the amenities. If there are any off-site facilities that are related to the property, these shall also be described, including a summary of any fees that timeshare owners would have to pay to use those off-site facilities. 22. A statement that any timeshare interest shall be expressly subject to all requirements and representations set forth in the disclosure statement, which shall be placed of record with the Pitkin County Clerk and Recorder. 23. For any timeshare development that is a conversion of an existing project, a statement shall be provided by the developer, based on a report prepared by an independent architect or engineer, licensed by the State of Colorado, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the timeshare units. The statement shall also provide a list of any outstanding notices of uncured violations of building code or other municipal regulations, together with the estimated cost of curing those violations. B. Timeshare Development Instruments. The applicant shall submit the following timeshare development instruments: 1. Instruments for the interval estate, time span estate, or fractional estate, including: a. The legal description, street address or other description sufficient to identify the property. b. Identification of timeshare time periods by letter, name, number or combination thereof. c. Identification of the timeshare estate and the method whereby additional timeshare estates may be created. d. The formula, fraction or percentage of the common expenses and any voting rights assigned to each timeshare estate. 13 l...,. e. Any restrictions on the use, occupancy, alteration or alienation of timeshare units. f. Any other matters that the applicant or the City Council deems reasonably necessary. 2. All timeshare development instruments shall provide for the following: a. That a homeowners' association shall be established. Title to the common areas of the development and responsibility for maintenance of the development shall reside within the association. The association shall designate a managing agent. The management contract with the managing agent shall allow for either party to terminate, for cause, upon sixty (60) days notice. In the event the manager is terminated, a new managing agent shall be designated as quickly as possible by the association. Any management agreement shall specify the managing agent's duties and responsibilities to maintain the development. b. A stipulation by the owner of the timeshare interest irrevocably designating the homeowners' association and/or the managing agent as an agent for the service of legal notices for any legal action, proceeding or hearing pertaining to the timeshare interest or for the service of process (in a manner sufficient to satisfy the requirements of personal service in the state, pursuant to Rule 4 C.R.C.P., as amended). c. Each timeshare interest with a multiple ownership shall be required to designate one managing agent as the spokesperson and voter for all of the owners involved. d. That the association shall have the ability to compel a timeshare owner to pay maintenance fees and if any owner's fees are not paid, his interest shall be subject to a lien and foreclosure or other divestment. In the event an owner or his guests violate the rules and regulations of the association, the association shall have the right to enjoin the violation and the prevailing party in such suit shall be awarded his court costs and reasonable attorney's fees. e. Provisions addressing reconstruction or repair of all or a portion of the timeshare development following its willful or non-willful destruction. Provisions should also be included addressing termination of the association, including the percentage of owners that must agree for the termination to become effective, what happens to the common elements in the event of a termination, and how the proceeds shall be 14 .-. distributed in the event the property is taken due to condemnation or eminent domain. 3. Updating and filing. a. The developer and his successors and assigns (other than individual unit purchasers) shall have a continuing duty to update the disclosure statement and file with the City all amendments to the timeshare development's instruments. Such amendments shall comply with the requirements of this section. No amendment which shall significantly alter the disclosure statement or the timeshare development instruments shall be effective unless approved and accepted by the City and filed in the office of the Pitkin County Clerk and Recorder. All amendments shall be initially submitted for review to the Community Development Director who shall have authority to either approve a proposed amendment as in compliance with the requirements of this section or refer the proposed amendment for appropriate subdivision or PUD approval. b. The foregoing updating and filing requirements do not apply to a single unit owner. However, the condominium association and/or the homeowners association, or both if there be multiple associations, shall have the continuing responsibility to update the filing, the disclosure statement, and any amendments to the condominium documents and/or timeshare development instruments with the City and, subject to applicable City approvals, to file the same in the .Office of the Pitkin County Clerk and Recorder as soon as practicable after City approval has been granted. Once the condominium association has been formed, the City shall not accept any amendments for review without prior approval thereby. 4. Before transfer of a timeshare unit and no later than the date of execution of any contract of sale, the applicant or any other seller of a timeshare unit shall provide the intended transferee with a copy of the disclosure statement and any amendments thereto, except this requirement shall not apply to the owner of a single timeshare estate in a development who is attempting to sell the estate. 5. No conveyance of a timeshare interest shall be valid unless the instrument of conveyance shall indicate that title is being transferred subject to the condominium declaration which shall include the disclosure statement as an exhibit thereto. 15 ,~. Section 2• That the following definitions be revised or added to Section 26.104.100: Timeshare development or unit. A development, building, or unit, the title to which is, or is to be, divided into interval estates, time span estates, or fractional estates, as defined at Section 38-33-110, C.R.S., as may be amended from time to time. Timeshare Lodge. A development or a unit that has been approved for timesharing, pursuant to Chapter 26.590, and has the characteristics of a timeshare lodge, as specified in .~ Section 26.590.060. Each unit in a timeshare lodge shall be subdivided into no less than seven (7) interval estates, time span estates, or fractional estates. A timeshare lodge unit may contain a kitchen and still be considered a lodge unit (not a residential dwelling unit) for purposes of this Code. Lodge. Same as hotel. Section 3• That Sections 26.710.140 C., 26.710.190 C., 26.710.200 C. and 26.710.320 C. be amended to delete "timesharing" as a conditional use, and that Sections 26.710.190 B., 26.710.200 B., and 26.710.320 B. be amended to add "timeshare lodge" as a permitted use. Section 4• That Section 26.710.320 B.1., permitted uses in the LP Zone District, be amended to read as follows: 1. Lodge, provided: a. All lodge units within the LP Overlay Zone District may have kitchens within individual lodge rooms. b. All lodge units must be available for overnight lodging by the general public on a short-term basis for at least six (6) months of each calendar year. This requirement shall not apply to a timeshare lodge. Section 5• That Section 26.710.190 D.2.d., minimum lot area per dwelling unit requirement for lodge units in the L/TR Zone District, be amended to read as follows: d. Lodge units (including timeshare lodge units). No requirement. 16 .~. Section 6• That Section 26.710.190 B.4, permitted uses in the L/I'R zone district, be amended to read as follows: 4. Multi-family dwellings, provided that such dwellings shall only be permitted on the following types of properties: a. properties on which multi-family dwellings were in e~dstence as of , 2002 (the effective date of this Code Amendment); or ~ b. properties for which a development order for the development of multi-family dwellings has been issued by the City, pursuant to Section 26.304.070 of this Code as of 2002 (the effective date of this Code Amendment), provided a building permit for the multi-family dwellings is issued before the vested rights for the development expire. Section 7• pE That Section 26.470.070 O., Conversion of Lodge Reconstruction Credits to Residential Dwelling Units, be repealed. APPROVED by the Commission at its regular meeting on , 2002. APPROVED AS TO FORM: PLANNING AND ZONING COMMISSION: City Attorney ATTEST: Jackie Lothian, Deputy City Clerk Jasmine Tygre, Chairperson 17 __ ~__ __ 9z c. //2~ -F~x -~ `" STATE `C"~F COLORADO CIVIL RIGHTS DIVISION Department of Regulatory Agencies of Coro M_ NGchael Couke ~~' 4 NT ~ b 'ACK LANG y MAftQUEZ, Director Executlvc Dlrcctor ~ o ~ r~ ~ 1896 ~ May 1998 (first notice printed in 1991, revised in 1994, 1996 and 1997) euovre~> Governor NOTICE TO ALL BUILDERS OR DESIGNERS OFMULTI-FAMILY BUILDINGS Since 1991, the federal Fair Housing Act has required multi-family dwellings containing four or more units to meet seven specific accessibility standards in all units of elevator buildings, and in the ground floor units of non-elevator buildings. NOTE: Even though you or your building inspector may consider a townhome asingle-family home (or a "zero lot line home" or "attached single-family home") because it is on its own lot and separated from others by firewalls, it is not exempt from Fair Housing Act requirements. The HUD definition of the "covered multi-family dwellings" subject to the accessibility requirements states that "Dwelling units within a single structure separated by firewalls do not constitute separate buildings." The Division is frequently asked what standards should be followed when there are differences, or conflicts, between the accessibility requirements of the Fair Housing Act and other state statutes or local ordinances. The answer is that the more strineent requirements should be followed, because the Fair Housing Act states explicitly that it "does not invalidate or limit any law of a State or political subdivision of a State...that requires dwellings to be designed and constructed in a manner that affords handicapped pex•sons greater access..." Builders and designers should then be aware of the following state or local laws: 1). The State Fair Housing Act, CRS 24-34-501, et. seq., was amended in 1990 to require the same seven handicap features as the Federal Fair Housing Act. Colorado has not adopted any interpretative regulations but will follow the HUD accessibility guidelines found in 24 CFR (Code of Federal Regulations), Chapter I. 2. Another Colorado law, attached, in effect since 1975, applies to any building used by the public, regardless of whether it is built by private or public funds. Privately- funded single-family homes are exempt, as are other residential projects containing less than seven units, but projects with seven units or more must make one in seven accessible to the ANSI standards. (Until 1998, the statute referred to the 1980 ANSI standards; it now refers to the "most current version" of the ANSI standards.) Major differences between this law and the Fair Housing Acts are on the last page. 3. Some cities and counties enforce the accessibility requirements of the UBC or their own local ordinances. (The 1997 UBC contains the FHA requirements.) 1560 Broadway, Sulte 1050 ^ Denver, Colorado 80202-5143 ^ 303-894-2997 Fax # 303-894-7830 ^ TTY # 303-894-7832 ^ 1-800-262-48451Colorado only) The mission of the Division is to assure that a(I Colorado citizens rrho nre real ~ 9 or potential victims of illegal discriminntian are afforded die equal protection of the lmr~~. Builders planning construction should try to comply with allOaccessihility l~.u,~__rho Fair Housing Acts, the attached state statute, and any local building codes. When " there are conflicts, builders must follow the more stringent requirements. As an example, sections 9-5-111 and 112 of the attached state statute require one in seven units to meet the most current version of the ANSI 117.1, which has more stringent accessibility standards than those in the Fair Housing Acts. These one-in-seven units would have to meet the ANSI 117.1 requirements; the remaining units would have to meet the requirements of the Fair Housing Acts. The Division is often asked whether the accessibility requirements of the Americans with Disabilities Act (ADA) apply to multi-family construction. Except for the examples given below, the ADA does not apply to residential construction. Usually, the federal and state Fair Housing Acts requirements apply to residential construction, and the architectural standards of the ADA (ADAAG) apply to commercial facilities and buildings or portions of buildings considered to be "public accommodations." However, there are some types or parts of residential projects (see below) that are subject to both the Fair Housing Act and the ADA. • Under Title II of the ADA, (State and Local Government Services), housing built "by, on behalf of or for the use of state or local governments is subject to the ADA. • Under Title III of the ADA (Public Accommodations and Commercial Facilities), which applies to non-governmental public accommodations and commercial structures, any features or buildings considered to be "public accommodations" are subject to the ADA and, if built since 1991, also subject to the Fair Housing Act. Examples of features or types of housing considered "public accommodations" under Title III and therefore subject to ADAAG (Americans With Disabilities Accessibility Guidelines) are: 1. The office where prospective residents come to apply for rentals or sales. 2. Common areas, such as a clubhouse or swimming pool, expected to be rented out to the public. (Common areas used only by residents and their guests are not considered "public accommodations" under the ADA.) 3. Apartments or condos designed to be used on a short term basis, such as ski area units rented out like motels. 4. Nursing homes, long term care facilities, college dormitories. 5. Some time shares. Further information about the ADA and ADA architectural standards (ADAAG) are available from the ADA InfoCenter in Colorado Springs, 1-800-949-4232. Nancy R. Snow C U' ~ ! c%/!1~ Housing Compliance Specialist 20 (303) 894-7822, Ext. 325, 1-800-262-4845 (Colorado Only) ooooix ,~. F -. TITLE 9 SAFETY -INDUSTRIAL AND COMMERCIAL ARTICLE 5 Building Constructed by Public or Private Funds -Standards 9-5-101. Definitions. As used in this article, unless the context otherwise requires: (1) "Aging" means those manifestations of the aging processes that significantly reduce mobility, flexibility, coordination, and perceptiveness but are not accounted for in the other categories mentioned in this section. (2) "Appropriate number" means the number of a specific item that would be reasonably necessary, in accord with the purpose and function of a building or facility, to accommodate individuals with specific disabilities in proportion to the anticipated number of individuals with disabilities who would use a particular building or facility. (3) "Disabilities of incoordination" means faulty coordination or palsy from brain, spinal, or peripheral nerve injury. (4) "Fixed turning radius, front structure to rear structure" means the turning radius of a wheel chair, left front-foot platform to right rear wheel, or right front-Foot platform to left re,a wheel, when pivoting on a spot. (~) "Fixed turning radius, wheel to wheel" means the tracking of the caster wheels and large wheels of a wheel chair when pivoting on a spot. (6) "Hearin, disabilities" means deafness or hearing impairments that might make an individual insecure in public areas because the individual is unable to communicate or hear warning signals. (7) ``Involved (involvement)" means a portion of the human anatomy or physiology, or both, which has a loss or impairment of normal function as a result of genesis, trauma, disease, inflammation, or degeneration. (8) "Nonambulatory disabilities" means impairments that, regardless of cause or manifestation, for all practical purposes confine individuals to wheel chairs. (9) "Ramps" or "ramps with gradients" means ramps with gradients, or ramps, with slopes, that deviate from what would otherwise be considered the normal level. An "exterior ramp", as distinguished from a "walk", means an appendage to a building leading to a level above or below existing ground level. As such, a ramp shall meet certain requirements similar to those imposed upon stairs. (10) "Semiambulatory•disabililies" means impairments that cause individuals to walk with difficulty or insecurity. Individuals using braces or crutches, amputees, arthritics, spastics, and those with pulmonary and cardiac ills may be semiambulatory. (11) "Sight disabilities' means total blindness or impairments affecting sight to the extent that the individual functioning in public areas is insecure or exposed to danger. (12)"Standard" means that when this term appears in small letters, it is descriptive and means typical type. (13) "Walk" means a predetermined, prepared-surface, exterior pathway leading to or from a building or a facility, or from one exterior area to another, placed on the existing ground level and not deviating from the level of the existing ground immediately adjacent thereto. 21 -~„ . . r^ ti..., 9-5-102. Applicability of standards. (1) The standards and specifications set forth in this article shall apply to all buildings and facilities used by the public which are constructed in whole or in part by the use of state, county, or municipal funds or the funds of any political subdivision of the state or which are constructed with private funds. All such buildings and facilities to be constructed from plans on which architectural drawings are started after July 1, 197, from any one of these funds or any combination thereof shall conform to each of the standards and specifications prescribed in this article. The govemmental unit responsible for the enforcement of this article shall grant exceptions to or modify any particular standard or specification when it is determined that it is impractical and would create an unusual hardship or would unreasonably complicate the construction, alteration, or repair in question. Any such exception or modification of the provisions of this article shall be made in writing as a matter of public record. These standards and specifications shall be adhered to in those buildings and facilities which will be constructed from architectural drawings prepared after July 1, 197, unless the authority responsible for the construction determines that the construction has reached a state where compliance is impractical. This article shall apply to permanent buildings. (2) Any building or facility which would have been subject to the provisions of this article but was under construction prior to July 1, 1976, shall comply with the standards and specifications set forth in this article when alterations, structural repairs, or additions are made to such building or facility. This requirement shall only apply to the area of specific alteration, structural repair, or addition and shall not be construed to mean that the entire structure or facility is subject to this article. (3) The general assembly finds and declares that the standards and specifications set forth in this article are of statewide concern. Nothing in this article shall prohibit any municipality or other governmental subdivision from making and enforcing standards and specifications that are more stringent than those set forth in this article. 9-~-103. Disabilities covered -purpose. (1) This article is concerned with nonambulatory disabilities, semiambulatory disabilities, sight disabilities, hearing disabilities, disabilities of incoordination, and aging. (2) It is intended to make all buildings and facilities covered by this article accessible to and functional for persons with disabilities to, through, and within their doors without loss of function, space, or facility where the general public is concerned. 9-5-103. Design criteria. Design criteria shall comply with the most current version of the "American National Standard for Buildings and Facilities Providing Accessibility and Usability for Physically Handicapped People", promulgated by the American national standard institute, commonly cited as "ANSI Al 17.1". 9-5-105. Repealed 1998 9-5-106. Repealed 1998 9-5-107. Repealed 1998 f -2- 22 ~ .~ -~. ,,, 9-5-108. Repealed 1998 9-5-109. Repealed 1998 9-~-110. Responsibility for enforcing standards. (1) The responsibility for enforcement of this article is as follows: (a) Where state funds are utilized, by the department of personnel; (b) Where funds of counties, municipalities, or other political subdivisions are utilized, by the governing bodies thereof; (c) Where wholly private funds are utilized, by the building department, or its equivalent, of the political subdivision having jurisdiction. (2) The government unit responsible for enforcement of this article may exempt any building or facility from any provision of this article upon a finding that compliance with such provision would subject an undue hardship on the taxpayers of the governmental unit liable for the cost of such compliance in relation to the benefits to persons with disabilities that are derived from such compliance. 9-~-111. Exemptions for certain privately funded projects. This article does not apply to privately funded projects for the construction of separate houses designed as single-family residences or to other types of residential property containing less than seven residential units. For larger residential and transient accommodation projects, this article shall apply to one unit for each seven units or major fraction thereof, as follows: Number of Units required to Units comply 7 0 s-14 1 u-z 1 '- 72_28 3 29-3~ 4 36-43 5 etc. 9-5-112. Residential building project requirement. Before any construction of a residential building project may be started, which project includes seven or more residential units, a contract shall be entered into with the governing body of the municipality, city, town, county, or city and county where said project is to be located. Said contract shall guarantee to the governing body that the specific number of residential units for persons with disabilities, as provided in section 9-~- l l ],shall be constructed in such a manner as to be easily accessible and adaptable for persons with disabilities and shall require the builder of such project to certify that said accessible and adaptable units will comply with the most current version of the "American National Standard for Buildings and Facilities Providing Accessibility and Usability for Physically Handicapped People", promulgated by the American national standard institute, commonly cited as "ANSI A117.1". -3- 23 ~"^+. NOTE THAT THE COLORADO LAW ON THE PRECEDING PAGES DIFFERS FROM THE FAIR HOUSING ACTS IN THE FOLLOWING RESPECTS: 1) It applies not only to new buildings, but also to alterations, structural repairs and additions; the seven accessibility requirements of the Fair Housing Acts apply only to new buildings; 2) It applies to residential and commercial building, the Fair Housing Acts apply only to residential construction; 3) It refers to the most recent version of the ANSI standard, whereas the Fair Housing Acts and the HUD design guidelines refer to the 1986 ANSI standard; 4) It applies to nroiects with seven or more units, whereas the federal and Colorado Fair Housing Acts apply on a building-by- building basis, to anv building containing four or more residential units; 5) It requires approximately one out of seven units in the project to be made accessible, whereas the Fair Housing Act accessibility standards apply to all units in elevator buildings and ground floor units in non-elevator buildings. However, the ANSI standards for those units are in some cases stricter and provide more accessibility for persons with disabilities than the standards in the Fair Housing Acts; 6) Section 9-5-111 applies, not only to housing, as do the Fair Housing Acts, but places the same requirement for one-in-seven accessible units to "transient accommodation projects." 7) Because the older state law requires the use of the ANSI standards, it contains some requirements for sight and hearing disabilities, whereas the requirements of the two Fair Housing Acts are for mobility impairments only; and, 8) It allows the unit of local government to modify or grant exceptions to the requirements for impracticality or unusual hardship. However, mandates of federal law would still prevail; thus no local government could waive any requirements of the Federal Fair Housing Act, or any other federal law, such as the ADA or the 1973 Rehabilitation Act, which prescribes accessibility features for projects and entities receiving federal money. 00003x ~. J • 24 g ~4u/ MEMORANDUM TO: Joyce Ohlson, Community Development Deputy Director FROM: James Lindt, Planner RE: Fractional Ownership Data Summary DATE• Mav 16 2002 SUMMARY: In investigating the scope of impacts of the proposed fractional ownership code amendments, Staff performed a GIS data analysis in ArcView. Staff found that seven multi-family structures that have been condominiumized in the L/TR zone district would be eligible for the fractional ownership exemption that is proposed. According to our GIS data, there aze a total of thirty-three multi-family building that have been condominiumized in the L/TR zone district, of which twenty-six of them contained more than six units. In addition, the R/1viF' zone district that was being considered for eligibility for the fractional ownership exemption was investigated in the same manner as the L/TR zone district. Staff found that eighteen multi-family structures would be eligible for the proposed fractional ownership exemption if it were extended to the R/NIF' zone district. In total, there aze thirty- six multi-family structures of more than six units in R/1viF' zone district out of 54 total condominiumized multi-family structures. Condo. Multi-famil Streuctures Less Than 6 Units More Than 6 Units L/TR 7 26 R/MF' 18 36 ~~i MEMORANDUM TO: Mayor Klanderud and City Council THRU: Julie Ann Woods, Community Development Director FROM: Joyce A. Ohlson, Deputy Directozil~V SUBJECT: 2nd Reading, Ordinance No. 21, Series of 2002, Timeshaze Regulations, Public Hearing for Code Amendment (Continued from September 23, 2002) DATE: October 15, 2002 Background: In late 2001, the City Council directed Staff to initiate code amendments that would address fractional ownership projects, hereinafter called, "Timeshaze/s". The project started off with research and evaluation of the City's current regulations, resulting in the writing and presentation at a Council work session on February 12, 2002 of Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options. This report was prepared by planning consultant, Alan Richman who assisted the City in this project. The primary conclusion of that report was that timeshare development can have positive impacts on Aspen, provided its potential negative impacts are properly managed. The project proceeded with a number of work sessions and public hearings with the Planning Commission and the public. On June 11th, the Planning and Zoning Commission completed their work on the timeshare code amendments and forwazded a positive recommendation to the City Council to adopt the attached ordinance. The City Council passed Ordinance No. 21, Series of 2002 on 1st Reading on June 24, 2002. Summary: The positive and negative impacts of timeshares, as concluded in Fractional Fee Ownership - Summazy of Research and Identification of Regulatory Options aze as follows: Positive Impacts: • Increased tourism and vitality • Ownership units that turn over instead of being vacant; and • Re-investment to upgrade older lodges. Negative Impacts: • Loss of traditional lodge inventory; • Inappropriate marketing and sales practices; and • Short-term residents in long term neighborhoods. The current timeshare provisions within the Land Use Code aze proposed for repeal as part of the attached ordinance and many of the other sections aze affected and therefore, amended as well. Instead of analyzing the ordinance section-by-section, the following Outline of Proposed Timeshare Code Amendments is intended to give you a sense of the basic directions taken in the code amendment. Essentially, there are two main aspects to the ordinance: the provisions that are intended to encourage timeshare development to occur, given its positive impacts, and the provisions that are intended to manage and thereby limit its potential negative impacts. Following is an outline of these. Outline of Proposed Timeshare Code Amendments: 1. New provisions proposed to encourage timeshare lodge development: • Timesharing would be permitted use instead of a conditional use. • Elimination of the "density penalty" in the L/TR zone district for any lodge unit that has a kitchen, enabling timeshare lodge units to contain kitchens. • Elimination of LP zone district provision that limited timesharing to only 6 months of the year. This provision will apply only to lodges, which are not timeshared ensuring availability to visitors. Repealing of the "Conversion of the Lodge Reconstruction Credits to Residential Dwelling Units" provisions, in order to not create an incentive for redevelopment of lodges to residential units. • Submission contents for timesharing considerably reduced. An applicant will not have to produce required legal documents until the project has received at least conceptual approval, or for smaller projects, until the PUD is to be recorded. • Simple exemption process for certain types of timeshaze conversions. • Timesharing would be classified as a lodge use (instead of a residential use) for GMQS review, making projects eligible for a larger allocation bucket. 2. New requirements proposed to better manage timesharing: • Timeshare would be reviewed as a PUD (either 2 or 4 step). • Establishment of a "menu" of mandatory and optional physical elements and operational practices that are to be included in timeshare projects. • Each timeshare lodge unit must be split into at least 7 estates. • Timeshare developments must comply with the City's business license requirements. • Review standards have been updated to address current community concerns; some former standards and application requirements have been deleted. Discussion (New information for October 15 hearing): Section 26.590.070, Review Standards for Timeshare Lodge Development has been amended since the last public hearing on August 26`h on this ordinance. The ordinance now includes a review standard requiring that applicants proposing to convert a traditional lodge to a timeshare lodge provide a fiscal impact analysis. The components of the fiscal impact analysis are specifically itemized and have to do with the history and projections for sales tax, real estate transfer tax, property tax and, in general, any other information that is relevant to understanding the tax consequences of the proposed development. If the fiscal impact study demonstrates there will be an annual loss to the City from the conversion of an existing lodge to a timeshare lodge, then the applicant shall be required to propose a mitigation program that is entered into between ORDINANCE N0.21 (SERIES OF 2002) AN ORDINANCE OF THE CITY OF ASPEN TO AMEND CHAPTER 26.590 26.590, TIMESHARE, AND RELATED SECTIONS OF THE CODE, THESE BEING SECTION 26.104.100, DEFINITIONS; 26.710.320, LODGE PRESERVATION OVERLAY ZONE DISTRICT; 26.710.190, LODGE/TOURIST RESIDENTIAL ZONE DISTRICT; 26.710.330, SKI AREA BASE ZONE DISTRICT; 26.710.140, COMMERCIAL CORE ZONE DISTRICT; 26.710.200, COMMERCIAL LODGE ZONE DISTRICT; 26.480.030 SUBDIVISION EXEMPTIONS; 26.480.040 SUBDIVISION PROCEDURES; 26.510.030, PROCEDURES FOR SIGN PERMIT APPROVAL; AND 26.470.070, GMQS EXEMPTIONS WHEREAS, the City Council and the Planning and Zoning Commission of the City of Aspen directed the Community Development Department to propose amendments to the Land Use Code to better address the emerging types of timeshare and fractional fee projects that are being planned in Aspen; and, WHEREAS, in response to this direction, the Community Development Director prepared the research paper Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options, dated January, 2002; and, WHEREAS, a work session was held with the Aspen City Council and the Planning and Zoning Commission on February 12, 2002, at which time a discussion of the research paper was held and direction was given to the Community Development Director to prepare the appropriate amendments to the Aspen Land Use Code; and, WHEREAS, a work session was held with the Planning and Zoning Commission on March 26, 2002, to review a first draft of these proposed amendments to the Land Use Code, at which time it was determined that a public hearing should be scheduled to consider the proposals; and, WHEREAS, pursuant to Section 26.310 of the Aspen Land Use Code, applications to amend the text of Title 26 of the Municipal Code shall be reviewed and recommended for approval, approval with conditions, or denial by the Cormunity Development Director and then by the Planning and Zoning Cormission at a public heazing. Final action shall be by City Council after reviewing and considering these recommendations; and, WHEREAS, the Community Development Director recommended approval of the amendments to the Land Use Code as are described herein; and, WHEREAS, the Planning and Zoning Commission conducted a duly noticed public hearing on May 21, June 4, and June 11, 2002, to consider these amendments to the Aspen Land Use Code, took public testimony, and considered the recommendations of the Planning Director; - 1 - ,.~~ ._,~ ..,r .. and, WHEREAS, at the conclusion of the public hearing, the Planning and Zoning Commission recommended approval of these amendments by a vote of 4 (four) in favor to 1 (one) against; and, WHEREAS, the City Council reviewed and considered the recommendations of the Community Development Director and the Planning and Zoning Commission during a duly noticed public hearing; and, WHEREAS, the City Council finds that the amendments to the Aspen Land Use Code, as described herein, meet or exceed all applicable standazds and their approval is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, the City Council finds that this Ordinance furthers and is necessary for the promotion of the public health, safety, and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN COLORADO: Section 1• That Chapter 26.590 of the Aspen Municipal Code be repealed and re-enacted to read as follows: Chapter 26.590 TIMESHARE DEVELOPMENT 26.590.010 Purpose and Intent. The purpose of this chapter is to establish the procedures and standards by which timeshaze development may be permitted within the City of Aspen. It is the City's intent to establish timeshaze regulations that provide for the protection of the character of Aspen as a resort community, and that help to promote increased tourism and vitality within the City. Specifically, the City intends that new timeshare projects in Aspen will implement the goals of the Aspen Area Community Plan, and will help to achieve the following public purposes: A. Increased Vitality. Timeshare developments can provide the opportunity for increased tourism to Aspen, can add to the level of community vitality, and can help to create a more sustainable local economy. This can be accomplished by expanding the number and variety of "hot beds" available to visitors, raising occupancy levels in the accommodations sector, and attracting "new trials" to Aspen, from persons who have not previously visited this community. B. Preserve and Enhance Lodging Inventory. Aspen's tourist accommodations inventory has - 2 - for some time included a significant percentage of traditional lodges. The community would like to preserve and enhance this lodging inventory, by encouraging timeshaze units to be contained in projects that look and operate in a manner similar to Aspen's traditional lodges. These regulations have been designed to accomplish this purpose by establishing standards for the physical and operational features of timeshare lodges, to ensure that new and re-developed timeshare lodges maintain Aspen's lodging traditions. C Upgrade Quality of Accommodations. It is important to Aspen's tourist economy that its accommodations are kept up-to-date. Timeshare development offers the opportunity to infuse capital into the short term accommodations inventory, so facilities can be modernized. It is equally important to ensure that once facilities are upgraded, the facility is managed to provide a quality visitor experience over time. These regulations are intended to ensure that timeshare lodges are properly maintained over the life of the development. D. Maintain Community Character. Aspen has a valued reputation as a quality resort community. The City intends to regulate timeshare mazketing and sales practices, to ensure that the way timeshare estates are mazketed and sold is consistent with the character of this community, and to minimize the potential for practices that would create an inappropriate image of Aspen. The City also intends to provide protection for its long term residential neighborhoods, to ensure that the impacts of timeshaze development do not adversely affect the character of these residential azeas, by limiting this use to the City's lodge and selected commercial zone districts. 26.590.020 Overview of Timeshare Development. A. Applicability. The requirements of this Chapter shall apply to all timeshare development within the City of Aspen. These requirements shall be in addition to all other applicable requirements set forth in this Title 26, and those set forth in the Colorado statutes. B. Types of Timeshare Development. There are two types of timeshare development that may be permitted within the City of Aspen, as follows: Timeshare lodge development is the basic form of timesharing permitted in Aspen. It applies to any application to convert lodge units or residential dwelling units to timesharing or to develop new units for timesharing, except for those applications that are eligible for an exemption, as described below. Timeshare lodge development is a permitted use in the Lodge/Tourist Residential (L/TR), Commercial Lodge (CL), Lodge Preservation Overlay (LP), Commercial Core (CC), and Ski Area Base (SHI) zone districts. To obtain approval of a timeshare lodge development, an applicant shall follow the procedures outlined in Section 26.590.040 and shall comply with the applicable characteristics of Section 26.590.060 and the applicable standards of Section 26.590.070. 2. Exempt timesharing is a more limited type of timesharing permitted in Aspen. The only units eligible for this exemption are single-family dwelling units, condominiumized duplex - 3 - .., . . dwelling units, and condominiumized multi-family dwelling units within any individual condominium complex or condominium project that contains no more than six (6) such units. Exempt timesharing is a permitted use in the Lodge/Tourist Residential (L/TR) and the Ski Area Base (SKI) zone districts. To obtain approval for exempt timeshazing, an applicant shall follow the procedures outlined in Section 26.590.030 B and shall comply with the standards of Section 26.590.030 C. 26.590.030 Exempt Timesharing. A. Eligibility For Exemption. 1. The following types of dwelling units aze eligible to apply for this exemption: a. Single-family dwelling units; b. Condominiumized duplex dwelling units; and c. Condominiumized multi-family dwelling units within any individual condominium complex or condominium project that contains no more than six (6) such units. 2. To be eligible to apply for the exemption, the single-family, duplex, or multi-family dwelling units must be located in the Lodge/Tourist Residential (L/TR) zone district or the Aspen Highlands Village PUD. B. Minimum Requirements To Obtain Exemption. 1. No more than six (6) estates may be created in any dwelling unit via this exemption. An applicant wishing to create more than six (6) estates in any unit may do so only via an application for a timeshare lodge development. 2. The ownership interests that may be created pursuant to this exemption shall be limited to "time-span estates" as defined in C.R.S. 38-33-110, where the annually recurring exclusive right to possession and occupancy is determined by a schedule or formula. 3. Applications for exempt timesharing shall be processed as a subdivision exemption, pursuant to Section 26.480.030 A.S. of this Code. 4. The minimum application contents for the subdivision exemption application shall be as follows: a. The applicable portions of the information described in Section 26.590.050 A., B., F and G.; and b. The general application contents required in Section 26.304.030, Application and Fees - 4 - C. Review Standards for Exemption. An applicant for exempt timesharing shall demonstrate compliance with each of the following standards. These standards aze in addition to those standazds applicable to the review of the subdivision exemption. 1. The proposal shall not conflict with any applicable deed restrictions or private covenants, or with any provisions of the Colorado statutes. If the proposal is for a condominium, it shall comply with the applicable provisions of Section 26.590.070 I. of this Code. 2. All units to be converted to timeshazing shall comply with the City's adopted fire, health, and building codes. If any unit does not comply with said codes, then no sale of an interest in that unit shall be closed until a certificate of occupancy has been issued that brings the unit into compliance. 3. All dwelling units to be converted to timesharing shall comply with the requirements of the zone district in which they aze located and all other applicable standazds of this Land Use Code, or with the requirements of any PUD or other site specific development approval granted to the property. 4. The conversion of any multi-family dwelling unit that meets the definition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. 5. The marketing, sales, management, and operation of the timeshaze estates shall comply with the provisions of Sections 26.590.070 F. and 26.590.070 J. of this Code. 6. A wall sign shall be mounted on each building stating that it has been approved by the City for timesharing and providing the name and phone number of a management entity or local contact person who can be called in the event of an emergency or to respond to neighborhood concerns. The sign shall comply with the requirements of Section 26.510.030 B.22. of this Code. 7. Development shall be in compliance with the provisions of the Subdivision requirements in Section 26.480 when new lots or units are created. 26.590.040 Procedure for Review of Timeshare Lodge Development Application. All timesharing that is not eligible for an exemption shall be processed as follows: A. PUD Review Required. Timeshare lodge development shall be processed as a Planned Unit Development (PUD), pursuant to Chapter 26.445 of this Code. B. Consolidated PUD Review. The Community Development Director may determine that - 5 - because a timeshare lodge development is a conversion of an existing building, or because of the limited extent of the issues involved in the proposal, the four step PUD review process should be consolidated into a two step review, pursuant to Section 26.445.030 B.2, Consolidated Conceptual and Final Review. Development of a timeshare lodge in the Lodge Preservation Overlay (LP) Zone District shall be processed as a two step review, pursuant to Section 26.445.030 B.3. The Community Development Director is also authorized to waive those PUD submission requirements from Section 26.445.060 and review standards from Section 26.445.050 that the Director finds aze not applicable to a proposed timeshaze development. C. Subdivision Review. Timeshare lodge development shall also require subdivision approval. Review of the subdivision application may be combined with final PUD review, as authorized by Section 26.304.060 B., Combined Reviews, and by Section 26.445.030 B.4, Concurrent Associated Reviews. D. Growth Management Quota System Review. Whenever a proposed timeshare lodge development or exempt timesharing is subject to review under the City's Growth Management Quota System (Chapter 26.470), the development shall be considered to be a "Tourist Accommodation" or a "Lodge" under that System. E Authority to Grant Variations. Variations from the requirements applied to timeshare lodge development may be authorized by the City Council. An applicant requesting a variation shall demonstrate that the provision requested to be varied is not applicable to the proposed development or cannot be met, and shall demonstrate that the proposed variation is reasonable, would not be contrary to the public interest, and better implements the purpose and intent of these timeshare regulations than the codified requirement. 26.590.050 Contents of Application. In addition to the general application information required in Section 26.304.030, Application and Fees, and those application contents for PUD and subdivision, the application for timeshaze lodge development shall include the following information: A. Timeshare Use Plan. A detailed description of the basic elements of the proposed timeshaze use plan. The use plan shall describe the number of estates being created in each unit, the total number of estates to be created, the expected price for each estate, and whether a purchaser is buying a specific unit for a specific time, a specific unit for a floating time, or whether there is no specific unit but just a specific time. It shall also describe whether owners will be able to participate in an exchange program, and if so, in which program(s) they will be eligible to participate. The use plan shall also provide a specific description of how the development will comply with the requirements of Section 26.590.060, Characteristics of a Timeshaze Lodge. B. Summary of Disclosure Statement and Timeshare Instruments. A detailed summary of each - 6 - of the key points that will be included in the disclosure statement and the timeshare development instruments (see Section 26.590.090) if the project receives approval from the City. C. Management Plan. A plan for how the timeshare development will be managed, describing whether the applicant will manage the project, or if it will be managed by a management company, a branded company, or other entity, and describing how the project will be operated. D. Marketing Plan. The marketing plan for the timeshaze development, including information on proposed sales techniques (including a description of gifts, premiums, or promotions to be offered), sales packaging, and whether a sales office will be established off-site. E Budget. A planned budget for the proposed homeowners/condominium association estimating the proposed costs and expenditures for the management and maintenance of the timeshaze development. F Upgrading Plan. For any existing project that is proposed to be converted to a timeshare lodge development, the applicant shall submit a plan of how the project will be physically upgraded and modernized. G. Tax Collection. A statement indicating the manner in which real estate transfer taxes and sales taxes will be collected. K Developer's Registration. A copy of the developer's registration with the Colorado Real Estate Commission. If the developer has not so registered at the time of submission of the application, then this information shall be submitted at the time the timeshare documents are submitted for recordation, pursuant to Section 26.590.090 of this Code. 26.590.060 Characteristics of a Timeshare Lodge Development It is the intent of the City of Aspen that all timeshare lodge developments incorporate some of the physical and operational features that are typically found in lodges in Aspen. The City recognizes that each timeshare development is unique, and that each development should not contain all of these features. In fact, considering the proposed location of the development and the intended method of operating the facility, certain of these features may not be appropriate. The City also recognizes that when owners occupy their units, the development will operate more like a private residential complex than like a lodge. But the City seeks to balance that form of use with opportunities for other guests to use the facility. Therefore, the City has identified a menu of timeshaze lodging features, including both mandatory and optional elements. All timeshaze lodge developments shall incorporate the mandatory physical and operational features listed herein. However, an applicant may instead propose to substitute optional operational features for one or more of the mandatory features listed herein, or may propose its own set of features which ensure that the development operates in a manner similar to a lodge when the owners are not using their - 7 - ~.., timeshare estates, as described further below. A. Mandatory Physical Elements. 1. All timeshaze lodge developments shall have a staffed on-site front desk, located within a lobby that is sized to meet the needs of the project. If the timeshare lodge is part of a multi- site development, there may be a single front desk for these sites. The staffed front desk shall be open at least during regular business hours, and shall be managed to provide full- time registration and reservation services, including provision for late check-in and for other off-hours guest needs. The front desk shall accommodate walk-in rentals. 2. A timeshare lodge development shall contain a sufficient level of recreational facilities (such as exercise equipment, a pool or spa, or similar facilities) and other amenities (such as a lobby, meeting spaces, and similaz facilities) to serve the occupants, including facilities that can be used in the winter and the summer seasons. The extent of the facilities provided should be proportional to the size of the timeshaze lodge development. The types of facilities should be consistent with the planned method and style of operating the development. 3. A timeshare lodge in the Commercial Core (CC) zone district shall not have any lodge rooms located on the ground floor. Instead, a timeshare lodge in the CC zone district shall contain at least one of the following elements: a baz, restaurant, or retail facilities. The element(s) provided shall be located along the street front, shall be accessible from the street, and shall be designed to serve the public, not just the occupants of the timeshaze lodge. B. Mandatory Operational Practices. The City wants to ensure that the units in a timeshare lodge development are available for rental to the public when they aze not being occupied by the owner, the owner's guests, or persons occupying the unit under an exchange program. The City has identified certain operational practices that will accomplish this intent, which are listed in this section. An applicant who agrees to include all of the practices listed below in the operation of the timeshare development shall be deemed to have complied with the requirements of this sub-section B and need not address any of the optional operational practices ofsub-section C. The City recognizes, however, that there may be other ways to comply with this intent, and will consider these and other operational practices. Applicants may propose to substitute one or more of the optional practices listed in Section C., below, for one or more of the mandatory practices listed in this Section B. Applicants may also propose other operational practices not listed in Section C. as a means of demonstrating compliance with this standard. Acceptance of the proposed optional practices as a substitute for one or more of the mandatory practices shall be at the sole discretion of the City Council. I . Timeshaze estates shall be made available for short-term rental when the estate is not in use - 8 - z%y `.., by the owner of the unit, the owner's guests, or persons occupying the unit under an exchange program. Units that are available for rental shall be listed at competitive rates in a central reservation system. Listing of the unit with a recognized central reservation system in Aspen, or through the central reservation system of the company that will manage the timeshaze development, is preferred. 2. The covenants of the homeowners association shall permit walk-in rental of units. The association shall not limit rental of units to such arrangements as only weekly rentals or Saturday-to-Saturday rentals; instead the association shall permit shorter stays, split-week rentals, and similaz flexible arrangements. 3. Owners of timeshaze estates shall be required to reserve their unit/time sufficiently far enough in advance to enable the public to obtain access to those units that aze not so reserved. 4. The owner of a timeshare estate shall not be permitted to occupy that estate for any period in excess of thirty (30) consecutive calendar days. 5. The units that remain in the developer's inventory shall be made available for rental to the public while the estates are being sold, except for models and other units that are needed for mazketing or promotional purposes. C. Optional Operational Features. 1. Timeshaze lodge developments that subdivide each unit into a larger number of estates (more than 10 estates per unit) are preferred to those which subdivide each unit into a smaller number of estates (less than 10 estates per unit). 2. Applicants may formulate their timeshare use plan such that the purchaser would not expect to occupy the same unit each visit; instead the purchaser would purchase the right to occupy a certain type of unit for a certain period of time. Applicants may also include provisions in the homeowners association documents prohibiting owners from personalizing the unit they have purchased. 3. Applicants may design their development as a mixed project, which includes not only timeshare units, but also some units that would continue to be owned and operated by the applicant and his successors or assigns as traditional lodge units. Another type of use plan that is encouraged would be for the applicant to agree not to sell all of the shares in every unit, but to instead keep some time reserved for rental to the public at market rates during both the high seasons and the off-seasons. 4. Applicants may decide to sell on and off-season estates as a package. 5. Applicants may include in their use plan provisions that allow for a wide range of exchange - 9 - opportunities for owners, which will promote new Aspen trials. 26.590.070 Review Standards for Timeshare Lodge Development. An applicant for timeshare lodge development shall demonstrate compliance with each of the following standards, as applicable to the proposed development. These standazds are in addition to those standards applicable to the review of the PUD and Subdivision applications. A. Fiscal Impact Analysis and Mitigation. Any applicant proposing to convert an existing lodge to a timeshare lodge development shall be required to demonstrate that the proposed conversion will not have a negative tax consequence for the City. In order to demonstrate the tax consequences of the proposed conversion, the applicant shall prepare a detailed fiscal impact study as part of the final PUD application. The fiscal impact study shall contain at least the following comparisons between the existing lodge operation and the proposed timeshare lodge development: 1. A summary of the sales taxes paid to the City for rental of lodge rooms during the prior five yeazs of its operation. If the lodge has stopped renting rooms prior to the time of submission of the application, then the summary shall reflect the final five years the lodge was in operation. The summary of past taxes paid shall be compared to a projection of the sales taxes the proposed timeshare lodge development will pay to the City over the first five years of its operation. As part of this projection, the applicant shall specify the number of nights the applicant anticipates each timeshaze lodge unit will be available for daily rental to visitors (that is, the annual number of nights when the unit will not be occupied by the owner or the owner's guests), the expected visitor occupancy rate for these units, the expected average daily cost to rent the unit, and the resulting amount of sales tax that will be paid to the City. 2. An estimation of the real estate transfer taxes that would be paid to the City if the existing lodge were to be sold. If an actual sale of the property has occurred within the last 12 months, then the real estate taxes paid for that sale shall be used. This estimation shall be compared to a projection of the real estate transfer taxes the proposed timeshaze lodge development will pay to the City over the first five years of its operation. This projection shall include a statement of the expected sales prices for the timeshare estates, and the applicable tax rate that will be applied to each sale. 3. A summary of the City-portion of the property taxes paid for the lodge for the prior five years of its operation, and a projection of the property taxes the proposed timeshare lodge development will pay to the City over the first five years of its operation. This projection shall include a statement of the expected value that will be assigned to the property by the Tax Assessor, and the applicable tax rate. The fiscal impact study may also contain such other information that the applicant believes is relevant to understanding the tax consequences of the proposed development. - 10 - For example, the applicant may provide information demonstrating there will be "secondary", or "indirect" tax benefits to the City from the occupancy of the timeshare units, in terms of increased retail sales and other economic activity in the community as compared to the existing lodge development. The applicant shall be expected to prove definitively why the timeshare units would cause such economic advantages that would not be achieved by a traditional lodge development. Any such additional information provided shall compaze the taxes paid during the prior five years of the lodge's operation to the first five years of the proposed timeshaze lodge's operation. If the fiscal impact study demonstrates there will be an annual tax loss to the City from the conversion of an existing lodge to a timeshare lodge, then the applicant shall be required to propose a mitigation program that resolves the problem, to the satisfaction of the Aspen City Council. The accepted mitigation program shall be documented in the PUD Agreement for the project that is entered into between the applicant and the Aspen City Council. B. Upgrading of Existing Projects. Any existing project that is proposed to be converted to a timeshare lodge development shall be physically upgraded and modernized. The extent of the upgrading that is to be accomplished shall be determined as part of the PUD review, considering the condition of the existing facilities, with the intent being to make the development compatible in chazacter with surrounding properties and to extend the useful life of the building. 1. To the extent that it would be practical and reasonable, existing structures shall be brought into compliance with the City's adopted fire, health, and building codes. 2. No sale of any interest in a timeshaze lodge development shall be closed until a certificate of occupancy has been issued for the upgrading. C Preservation of Existing Lodging Inventory. An express purpose of these regulations is to preserve and enhance Aspen's existing lodging inventory. Therefore, any proposal to convert an existing lodge or other property that provides short term accommodations to a timeshaze lodge should, at a minimum, replace the existing number of units on the property in the planned timeshare lodge. If the applicant is unable to replace the existing number of units, then the timeshare lodge development shall replace the existing number of bedrooms on the property, or the applicant shall demonstrate how the proposal complies with the purposes of these regulations, even though the planned timeshare lodge will not replace either the existing number of units or bedrooms. D. Affordable Housing Requirements. Whenever a timeshaze lodge development is required to provide affordable housing, mitigation for the development shall be calculated by applying the standards of the City's housing designee for lodge uses. The affordable housing requirement shall be calculated - 11 - based on the maximum number of proposed lock out rooms in the development, and shall also take into account any retail, restaurant, conference, or other functions proposed in the lodge. 2. The conversion of any multi-family dwelling unit that meets the definition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. E. Parking Requirements. 1. The parking requirement for timeshare lodge development shall be calculated by applying the parking standard for the underlying zone district for lodge uses. The pazking requirement shall be calculated based on the maximum number of proposed lock out rooms in the development. 2. The timeshare lodge development shall also provide an appropriate level of guest transportation services, such as vans or other shuttle vehicles, to offer an alternative to having owners and guests using their own vehicles in Aspen. 3. The owner of a timeshare estate shall be prohibited from storing a vehicle in a pazking space on-site when the owner is not using that estate. F Appropriateness of Marketing and Sales Practices. The marketing and sale of timeshare estates shall be governed by the real estate laws set forth in Title 12, Article 61, C.R.S., as may be amended from time to time. The applicant and licensed mazketing entity shall present to the City a plan for marketing the timeshare development. The following mazketing and sales practices for a timeshaze development shall not be permitted: a. The solicitation of prospective purchasers of timeshaze units on any street, mall, or other public property or facility; and b. Any unethical sales and marketing practices which would tend to mislead potential purchasers. 2. Giving of gifts to encourage potential purchasers to attend a sales presentation or to visit a timeshaze development is permitted, provided the gift reflects the local Aspen economy. For example, gifts for travel to or accommodations in Aspen, restaurants in Aspen, and local attractions (ski passes, concert tickets, rafting trips, etc.) are permitted. Gifts that have no relationship to the local Aspen economy are not permitted. The following gifts are also not permitted: - 12 - a. Any gift for which an accurate description is not given; b. Any gift package for which notice is not given to the prospective purchaser that the purchaser will be required to attend a sales presentation as a condition of receiving the gifts; and a Any gift package for which the printed announcement of the requirement to attend a sales presentation is in smaller type face than the information on the gift being offered. G. Adequacy of Maintenance and Management Plan. The applicant shall provide documentation and guazantees that the timeshare lodge development will be appropriately managed and maintained in an manner that will be both stable and continuous. This shall include an identification of when and how maintenance will be provided, and shall also address the following requirements: 1. A fair procedure shall be established for the estate owners to review and approve any fee increases which may be made throughout the life of the timeshare development, to provide assurance and protection to timeshaze owners that management/assessment fees will be applied and used appropriately. 2. The applicant shall also demonstrate that there will be a reserve fund to ensure that the proposed timeshare development will be properly maintained throughout its lifetime. K Compliance with State Statutes. The applicant shall demonstrate that the proposed timeshare lodge development will comply with all applicable requirements of Title 12, Article 61, C.R.S.; Title 38, Article 33, C.R.S.; and Title 38, Article 33.3, C.R.S.; including the requirements concerning the five (5) day period for rescission of a sales contract, and the procedures for holding deposits or down payments in escrow. 1 Approval By Condominium Owners. If the development that is proposed to be timeshazed is a condominium, the applicant shall submit written proof that the condominium declaration allows timesharing, that one hundred (100) percent of the owners of the condominium units have approved the timeshare development, including any improvements to the common elements that the applicant may propose, that all mortgagees of the condominium have approved the proposed timeshaze development, and that all condominium units in the timeshare development will be included in the same sales and mazketing program. J Prohibited Practices and Uses. Without in any way limiting any requirement contained in this Chapter, it is unlawful for any person to knowingly engage in any of the following practices: 1. The creation, operation or sale of a right-to-use interest or any other timeshare concept which is not specifically allowed and approved pursuant to the requirements of this section. - 13 - 4! -. ./ Right-to-use timeshare concepts (e.g. lease-holds and vacation clubs) aze considered inappropriate in Aspen and aze not permitted. 2. Misrepresentation of the facts contained in any application for timeshaze approval, timeshare development instruments, or disclosure statement. 3. Failure to comply with any representations contained in any application for timesharing or misrepresenting the substance of any such application to another who may be a prospective purchaser of a timeshare interest. 4. Manage, operate, use, offer for sale or sell a timeshare estate or interest therein in violation of any requirement of this Chapter or any approval granted pursuant hereto, or cause or aid and abet another to violate any requirement of this Chapter, or an approval granted pursuant to this Chapter. 26.590.080 Business License and Sales Tax Payments. A. Business License. It shall be unlawful for any timeshare development to operate in the City of Aspen without first obtaining a business license in accordance with the standard procedures of the City of Aspen. B. Sales Tax Payments. Occupancy of any timeshare unit by anyone who pays a rental fee for the use of the unit (other than the owner thereof) shall be subject to the City's sales tax the same as if such occupancy were of a hotel or lodge unit. Any timeshare development, as a condition of its approval, shall be required to obtain an Aspen Sales Tax/Lodging Tax License, which shall establish how this tax shall be collected and paid to the City. The manager of the association shall be responsible for the timely collection of the City sales tax for the City of Aspen. 26.590.090 Timeshare Documents. At the same time the applicant submits the PUD Development Plan and PUD Agreement to the City for recordation, pursuant to Section 26.445.070, or submits the necessary documents to record the subdivision exemption, the applicant shall also submit the following timeshare documents in a form suitable for recording. The Community Development Director may require the applicant to submit a draft version of these timeshare documents at the time of submission of the Final PUD application. A. Disclosure Statement. The applicant shall submit a disclosure statement that contains the following information: The name and address of the developer of the timeshaze development as well as a summary of the developer's business experience, including all background and experience in the development of timeshare development, and the present financial condition of the - 14 - fir:/ ~. a developer. 2. The name and address of the manager/management company for the development, if any, and a description of the manager's/management company's responsibilities, powers, duties, authority and business experience. All information on the managers background and experience specifically related to timeshare development shall be provided. 3. The names and addresses of the marketing entity and the listing broker and a statement of whether there are any lawsuits pending or investigations that have been undertaken against the marketing entity or listing broker, and if so, a description of the status or disposition of said lawsuits or investigations. A summary of the mazketing entity's business experience including all background and experience related to timeshare development. 4. A description of the timeshaze units, including the developer's schedule for completion of all buildings, units, and amenities, with dates of availability. 5. If the timeshaze plan consists of a condominium or a similar form of ownership, a description of the development and any pertinent provisions of the condominium instruments. 6. Any restraints on the transfer of the purchaser's interest in the timeshare units or plan. 7. The timeshare use plan, which shall include a description of the rights and responsibilities under the plan. 8. Notice of any liens, title defects or encumbrances on or affecting the title to the units or plan and, if there are encumbrances or liens, a statement as to whether, when and how they will be removed. 9. Notice of any pending or anticipated legal actions that aze material to the timeshaze units or plan of which the applicant has, or should have, knowledge. 10. The total financial obligation of the purchaser, which shall include the initial price and any additional chazges to which the purchaser may be subject in purchasing the unit. 11. An estimate of the dues, maintenance fees, real property taxes, sales taxes, real estate transfer tax and similar periodic expenses, and the method or formula by which they are derived and apportioned, which shall include whether maintenance fees are determined by unit, time of year, or prorated share of the overall maintenance costs, or any other means utilized to compute maintenance fees. 12. A statement demonstrating the manner in which management/assessment fees will be held, utilized and accounted for. - 15 - ., , 13. A description of any financing offered by the applicant. 14. The terms and significant limitations of any warranties provided, including statutory warranties and limitations on the enforcement thereof or on damages. 15. A statement that the proposed development will comply with all applicable requirements of Title 12, Article 61, C.R.S. Upon request from the City, the applicant shall provide a copy of the documents submitted to the State of Colorado for the registration and certification of the timeshaze developer. 16. The extent to which a timeshaze unit may become subject to a tax or other lien arising out of claims against other timeshare owners of the same timeshaze unit. 17. The minimum percentage of units the developer will require be sold before the developer will proceed with the completion of the timeshaze development. 18. A description of the maintenance to be supplied to the timeshare development, including how and when such maintenance will be provided. 19. Whether any or all the units in the proposed development will be available for participation in an exchange program. The applicant shall disclose which exchange program(s) the timeshare estate owners will be eligible to utilize. 20. A description of all insurance covering the property. 21. A description of the on-site amenities and recreational facilities which aze available for use by the unit owners. All on-site amenities shall be owned by the homeowner's association and the developer shall not be allowed to charge any additional fees for use of the amenities. If there are any off-site facilities that aze related to the property, these shall also be described, including a summary of any fees that timeshaze owners would have to pay to use those off-site facilities. 22. A statement that any timeshare interest shall be expressly subject to all requirements and representations set forth in the disclosure statement. 23. For any timeshaze development that is a conversion of an existing project, a statement shall be provided by the developer, based on a report prepazed by an independent architect or engineer, licensed by the State of Colorado, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the timeshaze units. The statement shall also provide a list of any outstanding notices of uncured violations of building code or other municipal regulations, together with the estimated cost of curing those violations. B. Timeshare Development Instruments. The applicant shall submit the following timeshare - 16 - ,.> ~.. development instruments: 1. Instruments for the interval estate or time span estate including: a. The legal description, street address or other description sufficient to identify the property. b. Identification of timeshare time periods by letter, name, number or combination thereof. c. Identification of the timeshaze estate and the method whereby additional timeshare estates may be created. d. The formula, fraction or percentage of the common expenses and any voting rights assigned to each timeshare estate. e. Any restrictions on the use, occupancy, alteration or alienation of timeshare units. Any other matters that the applicant or the City Council deems reasonably necessary. 2. All timeshaze development instruments shall provide for the following: a. That a homeowners association shall be established. Responsibility for maintenance of the development shall reside within the association. The association shall designate a managing agent. The management contract with the managing agent shall allow for either party to terminate, for cause, upon thirty (30) days notice. In the event the manager is terminated, a new managing agent shall be designated as quickly as possible by the association. Any management agreement shall specify the managing agent's duties and responsibilities to maintain the development. b. A stipulation by the owner of the timeshare interest irrevocably designating the homeowners association and/or the managing agent as an agent for the service of legal notices for any legal action, proceeding or hearing pertaining to the timeshare interest or for the service of process (in a manner sufficient to satisfy the requirements of personal service in the state, pursuant to Rule 4 C.R.C.P., as amended). c. Each timeshare interest with a multiple ownership shall be required to designate one managing agent as the spokesperson and voter for all of the owners involved. d. That the association shall have the ability to compel a timeshare owner to pay maintenance fees and if any owner's fees are not paid, his interest shall be subject to a lien and foreclosure or other divestment. In the event an owner or his guests violate the rules and regulations of the association, the association shall have the right to enjoin the violation and the prevailing party in such suit shall be awarded his court costs and reasonable attorney's fees. - 17 - e. Provisions addressing reconstruction or repair of all or a portion of the timeshaze development following its willful or non-willful destruction. Provisions should also be included addressing termination of the association, including the percentage of owners that must agree for the termination to become effective, what happens to the common elements in the event of a termination, and how the proceeds shall be distributed in the event the property is taken due to condemnation or eminent domain. 3. Updating and filing. a. The developer and his successors and assigns (other than individual unit purchasers) shall have a continuing duty to update the disclosure statement and file with the City all amendments to the timeshaze development's instruments. Such amendments shall comply with the requirements of this section. No amendment which shall significantly alter the disclosure statement or the timeshare development instruments shall be effective unless approved and accepted by the City and filed in the office of the Pitkin County Clerk and Recorder. All amendments shall be initially submitted for review to the Community Development Director who shall have authority to either approve a proposed amendment as in compliance with the requirements of this section or refer the proposed amendment for appropriate subdivision or PUD approval. b. The condominium association and/or the homeowners association, or both if there be multiple associations, and not individual unit owners shall have the continuing responsibility to submit to the City any amendments to the condominium documents and/or timeshare development instruments that would alter any condition imposed by the City or any prior representation made by the applicant to obtain approval of the timeshare development. Once the condominium association has been formed, the City shall not accept any amendments for review without prior approval thereby. 4. Before transfer of a timeshare unit and no later than the date of execution of any contract of sale, the applicant or any other seller of a timeshare unit shall provide the intended transferee with a copy of the disclosure statement and any amendments thereto, except this requirement shall not apply to the owner of a single timeshaze estate in a development who is attempting to sell the estate. 5. No conveyance of a timeshaze interest shall be valid unless the instrument of conveyance shall indicate that title is being transferred subject to the condominium declaration which shall include the disclosure statement as an exhibit thereto. Section 2: That the following definitions be revised or added to Section 26.104.100 of the Aspen Municipal Code: Timeshare Lodge. A development or a unit that has been approved for timesharing, pursuant to - 18 - ,a, Chapter 26.590, and has the characteristics of a timeshaze lodge, as specified in Section 26.590.060. Each unit in a timeshaze lodge shall be subdivided into no less than seven (7) time span or interval estates. A timeshare lodge unit may contain a kitchen and still be considered to be a lodge unit (not a residential dwelling unit) for purposes of this Land Use Code (although the City's adopted building codes will consider a unit with a kitchen to be a dwelling unit, and the City may, therefore, require it to comply with the applicable provisions of those codes for a dwelling unit). Lodge. Same as hotel. Section 3• That Section 26.710.320 B.1. of the Aspen Municipal Code, permitted uses in the LP Zone District, be amended to read as follows: 1. Lodge, provided: a. All lodge units within the LP Overlay Zone District may have kitchens within individual lodge rooms. b. All lodge units must be available for overnight lodging by the general public on a short- term basis for at least six (6) months of each calendar year. This requirement shall not apply to a timeshare lodge. CecNnn 4. That Section 26.710.190 D.2.d. of the Aspen Municipal Code, minimum lot area per dwelling unit requirement for lodge units in the L/TR Zone District, be amended to read as follows: d. Lodge units (including timeshare lodge units). No requirement. Whenever kitchen facilities are installed in a lodge unit in the L/TR zone district, such unit shall be deemed a multi-family dwelling unit, and the lodge shall be required to satisfy the minimum lot area requirements for amulti-family dwelling, as provided above, unless the development is a timeshaze lodge, which shall have no minimum lot area per dwelling unit requirement. Section 5: That Sections 26.710.140 C., 26.710.190 C., 26.710.200 C., 26.710.320 C. and 26.710.330 C. of the Aspen Municipal Code be amended to delete "timesharing" as a conditional use. Section 6• That Sections 26.710.140 B., 26.710.200 B., and 26.710.320 B. of the Aspen Municipal Code be amended to add "timeshare lodge" as a permitted use, and that Sections 26.710.190 B. and 26.710.330 B. of the Aspen Municipal Code be amended to add "timeshare lodge" and "exempt - 19 - ,._ .... timeshazing" as permitted uses. Section 7• That Section 26.480.030 A. of the Aspen Municipal Code, General Exemptions, be amended to add a new sub-section 5., to read as follows: 5. Exempt Timesharing. The creation of time-span estates that comply with the requirements for exempt timeshazing, pursuant to Section 26.590.030 of the Code. This subdivision exemption shall not be used to create any new lots or dwelling units. Cectinn R~ That sub-section A. of Section 26.480.040 of the Aspen Municipal Code, Procedures for Review, be amended to read as follows: A. Lot Line Adjustment and Exempt Timesharing. After an application for a lot line adjustment or exempt timesharing has been determined to be complete by the Community Development Director, the Director shall approve, approve with conditions, or deny the application. Cectinn 9~ That a new sub-section 22. be added to Section 26.510.030 B. of the Aspen Municipal Code, Exempt Signs, to read as follows 22. Timeshaze identification signs. A building that is approved for exempt timeshazing, pursuant to Section 26.590.030, shall have awall-mounted sign with an area not exceeding two (2) squaze feet, stating that it has been approved for timesharing and identifying the name and phone number of a contact person or management entity for the property. Section 10: That Section 26.470.070 O. of the Aspen Municipal Code, Conversion of Lodge Reconstruction Credits to Residential Dwelling Units, be repealed. Section 11: That the City Clerk is directed, upon adoption of this Ordinance, to record a copy of this Ordinance in the office of the Pitkin County Clerk and Recorder. Cectinn 12~ This Ordinance shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as - 20 - ,..~ ..~ herein provided, and the same shall be conducted and concluded under such prior ordinances. Cectinn 1"i~ If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. Section 14• A public hearing on the Ordinance was held on August 26, then continued to September 23, and finally heard on the 15th day of October, 2002 in the City Council Chambers, Aspen City Hall, Aspen Colorado, fifteen (15) days prior to which hearing a public notice of same was published in a newspaper of general circulation within the City of Aspen. INTRODUCED, READ, AND ORDERED PUBLISHED as provided by law, by the City Council of the City of Aspen on this 24"' day of June, 2002. Attest: Kathryn S. Koch, City Clerk Helen Kalin Klanderud, Mayor FINALLY, adopted, passed and approved this _ day of , 2002. Attest: Kathryn S. Koch, City Clerk Approved as to form: John Worcester, City Attorney Helen Kalin Klanderud, Mayor - 21 - .~ EXHIBIT A AMENDMENT TO THE LAND USE CODE REVIEW CRITERIA a4t STAFF FINDINGS Section 26.310.040, Text Amendment Standards of Review In reviewing an amendment to the text or the official zone district map, the City Council and the Planning and Zoning Commission shall consider: A. Whether the proposed amendment is in conflict with any applicable portions of this title. Staff Finding: The proposed code amendments are not in conflict with any applicable portions of this title or the Municipal Code. Staff feels the proposed code amendments will further the city's goal of preserving the character of Aspen as a resort community and will increase the vitality of the city. B. Whether the proposed amendment is consistent with aU elements of the Aspen Area Comprehensive Plan. Staff Finding: The proposed code amendments will contribute to the promotion and enhancement of the lifestyle and character that is Aspen. Staff finds that the proposed amendment is consistent with the elements of the Aspen Area Comprehensive Plan, especially as the AACP supports economic sustainability, community vitality and enhancement of the community as a resort community. C. Whether the proposed amendment is compatible with surrounding Zone districts and land uses, considering existing land use and neighborhood characteristics. Staff Finding: The proposed code amendments will require timeshaze lodging to be developed through a Planned Unit Development (PUD). Timeshaze applications will have to comply with all PUD and subdivision regulations. The requirements of a PUD aze that they follow the regulations of the underlying zoning, evaluate the impact of the development in the context of the neighborhood in which it is located and determine appropriate levels of density and development standazds for the specific site. Staff finds the proposed amendment to be compatible with surrounding zone districts and land uses. D. The effect of the proposed amendment on traffic generation and road safety. Staff Finding: There is already a traffic program in place, including provisions in the Aspen Area Community Plan for improvements in transportation which help to minimize the impact of new development and require for mitigation. There is also an existing public transportation system that serves the city. Many lodges and new lodge proposals provide shuttle transportation for their guests, which minimizes traffic generation and contributes to the .._., safety of the roads. It is anticipated that through the PUD process, the development will address traffic generation, parking and safety and mitigate appropriately based on impacts. Staff feels that the proposed amendment will not have any significant effects on traffic generation and road safety. E. Whether and the extent to which the proposed amendment would result in demands on public facilities, and whether and the extent to which the proposed amendment would exceed the capacity of such facilities, including, but not limited to, transportation facilities, sewage facilfries, water supply, parks, drainage, schools, and emergency medical facilities. Staff Finding: The proposed code amendments affect areas of the city that are already developed or are ready for redevelopment. There will not be any significant population growth generated by the proposed amendment. Staff feels that the infrastructure and public facilities that are already in place in the city are either sufficient to meet any needs generated by the timeshare developments or would have to be upgraded by the development. F. Whether and the extent to which the proposed amendment would result in significant adverse impacts on the natural environment. Staff Finding: Staff does not feel that the proposed code amendment will result in any significant adverse impacts on the natural environment. C. Whether the proposed amendment is consistent and compatible with the community character in the City of Aspen. Staff Finding: The proposed code amendments are intended to preserve and enhance community chazacter in Aspen. The proposed timeshare development regulations are intended to help achieve the goal of the City, especially as they relate to tourism accommodations, community vitality and economic sustainability. The regulations are intended to have timeshare developments be like lodges with a high level of turnover, high occupancy and increased availability. Therefore, Staff finds these criteria to be met. H. Whether there have been changed conditions affecting the subject parcel or the surrounding neighborhood which support the proposed amendment. Staff Finding: These criteria do not apply to the proposed amendments in that this criterion is site specific. I. Whether the proposed amendment would be in conflict with the public interest, and is in harmony with the purpose and intent of this title. Staff Finding: The purpose of the proposed amendments is to increase opportunity for tourism in Aspen, as well as ensure the upgrade and enhancement of the quality of lodging opportunities. The proposed amendments will establish regulations for timeshares that will be in the public's ,~. .w.~ interest. Staff finds the proposed amendments to be in harmony with the purpose and intent of the title and promote health, safety and welfare. ~~ MEMORANDUM TO: Mayor and City Council THRU: Julie Ann Woods, Community Development Director FROM: Joyce A. Ohlson, Deputy Director~~ SUBJECT: 15` Reading, Ordinance No. 21, Series of 2002, Timeshaze Regulations (Code Amendment) DATE: June 24, 2002 In late 2001, the City Council duetted Staff to initiate code amendments that would address fractional ownership projects, hereinafter called, "Timeshaze/s". The project started off with research and evaluation of the City's current regulations, resulting in the writing and presentation at a Council work session on February 12, 2002 of Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options. This report was prepared by planning consultant, Alan Richman who assisted the City in this project. The primary conclusion of that report was that timeshare development can have positive impacts on Aspen, provided its potential negative impacts aze properly managed. The project proceeded with a number of work sessions and public hearings with the Planning Commission and the public. On June 11`x, the Planning and Zoning Commission completed their work on the timeshare code amendments and forwazded a positive recommendation to the City Council to adopt the attached ordinance (Exhibit A). Summary: The positive and negative impacts of timeshazes, as concluded in Fractional Fee Ownership - Summary of Research and Identification of Regulatory Options are as follows: Positive impacts: * Increased tourism & vitality; * Ownership units that tum over instead of being vacant; and * Re-investment to upgrade older lodges. Negative Impacts: * Loss of traditional lodge inventory; * Inappropriate marketing and sales practices; and 1 Short term residents in long term neighborhoods. ,.,,R ~f The current timeshare provisions within the Land Use Code aze proposed for repeal as part of the attached ordinance and many of the other sections aze affected and therefore, amended as well. Instead of analyzing the ordinance section-by-section, the following Outline of Proposed Timeshaze Code Amendments is intended to give you a sense of the basic directions taken in the code amendment. Essentially, there aze two main aspects to the ordinance: the provisions that are intended to encourage timeshare development to occur, given its positive impacts, and the provisions that are intended to manage and thereby limit its potential negative impacts. Following is an outline of these. Outline of Proposed Timeshaze Code Amendments: New provisions proposed to encourage timeshare lodge development ~ Timeshazing would be a permitted use instead of a conditional use. ~ Elimination of the "density penalty" in the L/TR zone district for any lodge unit that has a kitchen, enabling timeshaze lodge units to contain kitchens. ~ Elimination of LP zone district provision that limited timesharing to only 6 months of the yeaz. This provision will apply only to lodges which aze not timeshared ensuring availability to visitors. Repealing of the "Conversion of the Lodge Reconstruction Credits to Residential Dwelling Units" provisions, in order to not create an incentive for redevelopment of lodges to residential units. ~ Submission contents for timesharing considerably reduced. An applicant will not have to produce required legal documents until the project has received at least conceptual approval, or for smaller projects, until the PUD is to be recorded. ~ Simple exemption process for certain types of timeshaze conversions. ~ Timesharing would be classified as a lodge use (instead of a residential use) for GMQS review, making projects eligible for a lazger allocation bucket. 2. New requirements proposed to better manage timesharing. ~ Timeshare would be reviewed as a PUD (either 2 or 4 step). ~ Establishment of a "menu" of mandatory and optional physical elements and operational practices that are to be included in timeshaze projects. ~ Each timeshaze lodge unit must be split into at least 7 estates. ~ Timeshaze developments must comply with the City's business license requirements. ~ Review standazds have been updated to address current community concerns; some former standazds and application requirements have been deleted. At Council's work session on June 4`~, Staff indicated we would further pursue legal consultation ~, ..ter regarding a Security Exchange Commission filing and its impact on regulating timeshare projects. Specifically, the issue has to do with whether the City's proposed ordinance too strongly favors that owners put units into a rental pool if not being used by the owner; an owner' family, friends, etc.; or through an exchange program. We do not want the timeshaze units to fall under the SEC ruling and be considered a security which only security brokers could sell. The intent is for the units to be handled and sold as real estate. We have initiated this review with a legal expert in the field of resort development and will provide that analysis at 2nd Reading. Review Procedure: Text Amendment: Pursuant to Section 26.310, the City Council may approve, recommend alternative language, or deny a proposed text amendment after considering a recommendation by the Planning and Zoning Commission, Community Development Director and following a public hearing. Planning and Zoning Commission Recommendation: On June 11, 2002, the Planning and Zoning Commission adopted Resolution No. 16, Series of 2002, by a vote of 4 (four) to 1 (one) recommending that the City Council approve the proposed ordinance, amending the Land Use Code to address Timeshaze development. The Planning Commission's recommendation for the code amendment language differs only slightly from what Staff has provided to the Council. These changes are not substantive, only clarifying, and aze shown in your ordinance by underlining. (Staff has not provided an additiona122 page copy of the Commission's resolution in order to save paper.) Minutes of the June 4d' and June 11'h public hearing aze provided as Exhibit B. Recommendation: Staff recommends that City Council approve the 1" Reading of the proposed ordinance approving the code amendments as contained within the ordinance and set 2"d Reading and public hearing for July 8, 2002. Recommended Motion: "I move to approve Ordinance No. 21, Series of 2002, at ls' Reading, approving Land Use Code Amendments regazding Timeshare Development and related code sections, and setting the date for 2"d Reading and public hearing for July 8, 2002." City Manager Comments: 3 .,~. Attachments: Exhibit A -Proposed Ordinance No., Series of 2002 Exhibit B -Planning and Zoning Commission Draft Minutes of June 4 and June 11, 2002 Exhibit C -Letter from Bert L. Myrin Jr. .~, ~. ~ ~ ~. ORDINANCE N0.21 (SERIES OF 2002) AN ORDINANCE OF THE CITY OF ASPEN TO AMEND CHAPTER 26.590 26.590, TIMESHARE, AND RELATED SECTIONS OF THE CODE, THESE BEING SECTION 26.104.100, DEFINITIONS; 26.710.320, LODGE PRESERVATION OVERLAY ZONE DISTRICT; 26.710.190, LODGE/TOURIST RESIDENTIAL ZONE DISTRICT; 26.710.140, COMMERCIAL CORE ZONE DISTRICT; 26.710.200, COMMERCIAL LODGE ZONE DISTRICT; 26.480.030 SUBDIVISION EXEMPTIONS; 26.480.040 SUBDIVISION PROCEDURES; 26.510.030, PROCEDURES FOR SIGN PERMIT APPROVAL; AND 26.470.070, GMQS EXEMPTIONS WHEREAS, the City Council and the Planning and Zoning Commission of the City of Aspen directed the Community Development Department to propose amendments to the Land Use Code to better address the emerging types of timeshaze and fractional fee projects that aze being planned in Aspen; and WHEREAS, in response to this direction, the Community Development Director prepazed the reseazch paper Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options, dated January, 2002; and WHEREAS, a work session was held with the Aspen City Council and the Planning and Zoning Commission on February 12, 2002, at which time a discussion of the reseazch paper was held and direction was given to the Community Development Director to prepaze the appropriate amendments to the Aspen Land Use Code; and WHEREAS, a work session was held with the Planning and Zoning Commission on March 26, 2002, to review a fast draft of these proposed amendments to the Land Use Code, at which time it was determined that a public hearing should be scheduled to consider the proposals; and WHEREAS, pursuant to Section 26.310 of the Aspen Land Use Code, applications to amend the text of Title 26 of the Municipal Code shall be reviewed and recommended for approval, approval with conditions, or denial by the Community Development Director and then by the Planning and Zoning Commission at a public hearing. Final action shall be by City Council after reviewing and considering these recommendations; and WHEREAS, the Community Development Duector recommended approval of the amendments to the Land Use Code as aze described herein; and WHEREAS, the Planning and Zoning Commission conducted a duly noticed public hearing on May 21, June 4, and June 11, 2002, to consider these amendments to the Aspen Land Use Code, took public testimony, and considered the recommendations of the Planning Director; and WHEREAS, at the conclusion of the public hearing, the Planning and Zoning Commission ~l~~b~+ ~ n ~~. .~.~ recommended approval of these amendments by a vote of 4 (four) in favor to 1 (one) against; and WHEREAS, the City Council reviewed and considered the recommendations of the Community Development Director and the Planning and Zoning Commission during a duly noticed public hearing; and WHEREAS, the City Council finds that the amendments to the Aspen Land Use Code, as described herein, meet or exceed all applicable standazds and their approval is consistent with the goals and elements of the Aspen Area Community Plan; and WHEREAS, the City Council fmds that this Ordinance firrthers and is necessazy for the promotion of the public health, safety, and welfaze. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN COLORADO: Section 1: That Chapter 26.590 of the Aspen Municipal Code be repealed and re-enacted to read as follows: Chapter 26.590 TIMESHARE DEVELOPMENT 26.590.010 Purpose and Intent. The purpose of this chapter is to establish the procedures and standards by which timeshaze development may be permitted within the City of Aspen. It is the City's intent to establish timeshaze regulations that provide for the protection of the chazacter of Aspen as a resort community, and that help to promote increased tourism and vitality within the City. Specifically, the City intends that new timeshaze projects in Aspen will implement the goals of the Aspen Area Community Plan, and will help to achieve the following public purposes: A. Increased Vitality. Timeshaze developments can provide the opportunity For increased tourism to Aspen, can add to the level of community vitality, and can help to create a more sustainable local economy. This can be accomplished by expanding the number and variety of "hot beds" available to visitors, raising occupancy levels in the accommodations sector, and attracting "new trials" to Aspen, from persons who have not previously visited this community. B. Preserve and Enhance Lodging Inventory. Aspen's tourist accommodations inventory has for some time included a significant percentage of traditional lodges. The community would like to preserve and enhance this lodging inventory, by encouraging timeshaze units Timeshare Ord. No. 21, 2002 2 ~, , e~ `.~ to be contained in projects that look and operate in a manner similar to Aspen's traditional lodges. These regulations have been designed to accomplish this purpose by establishing standazds for the physical and operational features of timeshare lodges, to ensure that new and re-developed timeshaze lodges maintain Aspen's lodging traditions. C Upgrade Quality of Accommodations. It is important to Aspen's tourist economy that its accommodations aze kept up-to-date. Timeshaze development offers the opportunity to infuse capital into the short term accommodations inventory, so facilities can be modernized. It is equally important to ensure that once facilities aze upgraded, the facility is managed to provide a quality visitor experience over time. These regulations aze intended to ensure that timeshaze lodges are properly maintained over the life of the development. D. Maintain Community Character. Aspen has a valued reputation as a quality resort community. The City intends to regulate timeshare marketing and sales practices, to ensure that the way timeshare estates aze mazketed and sold is consistent with the character of this community, and to minimize the potential for practices that would create an inappropriate image of Aspen. The City also intends to provide protection for its long term residential neighborhoods, to ensure that the impacts of timeshaze development do not adversely affect the chazacter of these residential areas, by limiting this use to the City's lodge and selected commercial zone districts. 26.590.020 Overview of Timeshare Development. A. Applicability. The requirements of this Chapter shall apply to all timeshaze development within the City of Aspen. These requirements shall be in addition to all other applicable requirements set forth in this Title 26, and those set forth in the Colorado statutes. B. Types of Timeshare Development There aze two types of timeshare development that may be permitted within the City of Aspen, as follows: Timeshare lodge development is the basic form of timesharing permitted in Aspen. It applies to any application to convert lodge units or residential dwelling units to timesharing, except for those applications that aze eligible for an exemption, as described below. Timeshare lodge development is a permitted use in the Lodge/Tourist Residential (L/'I'R), Commercial Lodge (CL), Lodge Preservation Overlay (LP), and Commercial Core (CC) zone districts. The standards and procedures for timeshaze lodge development are described in Sections 26.590.040 through 26.590.070. 2. Exempt timesharing is a more limited type of timesharing permitted in Aspen. The only units eligible for this exemption aze single-family dwelling units, condominiumized duplex dwelling units, and condominiumized multi-family dwelling units within any individual condominium complex or condominium Timeshare Ord. No. 21, 2002 ,~, , ~~ project that contains no more than six (6) such units. Exempt timesharing is a permitted use in the Lodge/Tourist Residential (L/TR) zone district and the Aspen Highlands Village PUD. The standazds and procedures for exempt timesharing aze described in Section 26.590.030. 26.590.030 Exempt Timesharing. A. Eligibility For Exemption. The following types of dwelling units aze eligible to apply for this exemption: a. Single-family dwelling units; b. Condominiumized duplex dwelling units; and c. Condominiumized multi-family dwelling units within any individual condominium complex or condominium project that contains no more than six (6) such units. 2. To be eligible to apply for the exemption, the single-family, duplex, or multi-family dwelling units must be located in the Lodge/Tourist Residential (L/TR) zone district or the Aspen Highlands Village PUD. B. Minimum Requirements To Obtain Exemption. No more than six (6) estates may be created in any dwelling unit via this exemption. An applicant wishing to create more than six (6) estates in any unit may do so only via an application for a timeshaze lodge development. 2. The ownership interests that may be created pursuant to this exemption shall be limited to "time-span estates" as defined in C.R.S. 38-33-110, where the annually recurring exclusive right to possession and occupancy is determined by a schedule or formula. Applications for exempt timesharing shall be processed as a subdivision exemption, pursuant to Section 26.480.030 A.S. of this Code. 4. The minimum application contents for the subdivision exemption application shall be as follows: a. The applicable portions of the information described in Section 26.590.050 A., B., F and G.; and Timeshare Ord. No. 21, 2002 .. b. The general application contents required in Section 26.304.030, Application and Fees. C Review Standards for Exemption. An applicant for exempt timesharing shall demonstrate compliance with each of the following standazds. These standards aze in addition to those standazds applicable to the review of the subdivision exemption. 1. The proposal shall not conflict with any applicable deed restrictions or private covenants, or with any provisions of the Colorado statutes. If the proposal is for a condominium, it shall comply with the applicable provisions of Section 26.590.070 I. of this Code. 2. All units to be converted to timesharing shall comply with the City's adopted fire, health, and building codes. If any unit does not comply with said codes, then no sale of an interest in that unit shall be closed until a certificate of occupancy has been issued that brings the unit into compliance. 3. All dwelling units to be converted to timesharing shall comply with the requirements of the zone district in which they aze located and all other applicable standazds of this Land Use Code, or with the requirements of any PUD or other site specific development approval granted to the property. 4. The conversion of any multi-family dwelling unit that meets the definition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. 5. The mazketing, sales, management, and operation of the timeshaze estates shall comply with the provisions of Sections 26.590.070 F. and 26.590.070 J. of this Code. 6. A wall sign shall be mounted on each building stating that it has been approved by the City for timesharing and providing the name and phone number of a management entity or local contact person who can be called in the event of an emergency or to respond to neighborhood concerns. The sign shall comply with the requirements of Section 26.510.030 B.22. of this Code. 7. Development shall be in compliance with the provisions of the Subdivision requirements in Section 26.480 when new lots or units aze created. 8. When exempt timeshaze lodge development is subject to review under the City's Growth Management Quota System ,the development shall be considered to be a "Tourist Accommodation" or a "Lodge" under that system. Timeshare Ord. No. 21, 2002 5 ,~... ....- ,; 26.590.040 Procedure for Review of Timeshare Lodge Development Application. All timesharing that is not eligible for an exemption shall be processed as follows: A. PUD Review Required. Timeshare lodge development shall be processed as a Planned Unit Development (PUD), pursuant to Chapter 26.445 of this Code. B. Consolidated PUD Review. The Community Development Director may determine that because a timeshaze lodge development is a conversion of an existing building, or because of the limited extent of the issues involved in the proposal, the four step PUD review process should be consolidated into a two step review, pursuant to Section 26.445.030 B.2, Consolidated Conceptual and Final Review. Development of a timeshaze lodge in the Lodge Preservation Overlay (LP) Zone District shall be processed as a two step review, pursuant to Section 26.445.030 B.3. The Community Development Director is also authorized to waive those PUD submission requirements from Section 26.445.060 and review standards from Section 26.445.050 that the Director finds aze not applicable to a proposed timeshare development. C Subdivision Review. Timeshae lodge development shall also require subdivision approval. Review of the subdivision application may be combined with final PUD review, as authorized by Section 26.304.060 B., Combined Reviews, and by Section 26.445.030 B.4, Concurrent Associated Reviews. D. Growth Management Quota System Review. Whenever a proposed timeshaze lodge development or exempt timesharing is subject to review under the City's Growth Management Quota System (Chapter 26.470), the development shall be considered to be a "Tourist Accommodation" or a "Lodge" under that System. E Authority to Grant Variations. Variations from the requirements applied to timeshaze lodge development may be authorized by the City Council. An applicant requesting a variation shall demonstrate that the provision requested to be varied is not applicable to the proposed development or cannot be met, and shall demonstrate that the proposed variation is reasonable, would not be contrary to the public interest, and better implements the purpose and intent of these timeshare regulations than the codified requirement. 26.590.050 Contents of Application. In addition to the general application information required in Section 26.304.030, Application and Fees, and those application contents for PUD and subdivision, the application for timeshare lodge development shall include the following information: A. Timeshare Use Plan. A detailed description of the basic elements of the proposed Timeshare Ord. No. 21, 2002 6 ,,, W 4y timeshaze use plan. The use plan shall describe the number of estates being created in each unit, the total number of estates to be created, the expected price for each estate, and whether a purchaser is buying a specific unit for a specific time, a specific unit for a floating time, or whether there is no specific unit but just a specific time. It shall also describe whether owners will be able to participate in an exchange program, and if so, in which program(s) they will be eligible to participate. The use plan shall also provide a specific description of how the development will comply with the requirements of Section 26.590.060, Chazacteristics of a Timeshare Lodge. B. Summary of Disclosure Statement and Timeshare Instruments. A detailed summary of each of the key points that will be included in the disclosure statement and the timeshare development instruments (see Section 26.590.090) if the project receives approval from the City. C. Management Plan. A plan for how the timeshaze development will be managed, describing whether the applicant will manage the project, or if it will be managed by a management company, a branded company, or other entity, and describing how the project will be operated. D. Marketing Plan. The maketing plan for the timeshare development, including information on proposed sales techniques (including a description of gifts, premiums, or promotions to be offered), sales packaging, and whether a sales office will be established off-site. E. Budget. A thorough account of the proposed homeowners/condominium association budget, giving a true indication of proposed costs and expenditures. F. Upgrading Plan. For any existing project that is proposed to be converted to a timeshare lodge development, the applicant shall submit a plan of how the project will be physically upgraded and modernized. G. Tax Collection. A statement indicating the manner in which real estate transfer taxes and sales taxes will be collected. H. Developer's Registration. A copy of the developer's registration with the Colorado Real Estate Commission. If the developer has not so registered at the time of submission of the application, then this information shall be submitted at the time the timeshare documents are submitted for recordation, pursuant to Section 26.590.090 of this Code. 26.590.060 Characteristics of a Timeshare Lodge Development It is the intent of the City of Aspen that all timeshaze lodge developments incorporate some of the physical and operational features that are typically found in lodges in Aspen. The City recognizes that each timeshaze development is unique, and that each development should not contain all of Timeshare Ord. No. 21, 2002 ,~ - a,. d,r these features. In fact, considering the proposed location of the development and the intended method of operating the facility, certain of these features may not be appropriate. The City also recognizes that when owners occupy their units, the development will operate more like a private residential complex than like a lodge. But the City seeks to balance that form of use with opportunities for other guests to use the facility. Therefore, the City has identified a menu of timeshare lodging features, including both mandatory and optional elements. All timeshare lodge developments shall incorporate the mandatory physical and operational features listed herein. However, an applicant may instead propose to substitute optional operational features for one or more of the mandatory features listed herein, or may propose its own set of features which ensure that the development operates in a manner similaz to a lodge when the owners aze not using their timeshare estates, as described further below. A. Mandatory Physical Elements. 1. All timeshare lodge developments shall have an manned on-site front desk, located within a lobby that is sized to meet the needs of the project. If the timeshaze lodge is part of a multi-site development, there may be a single front desk for these sites. The manned front desk shall be open at least during regulaz business hours, and shall be managed to provide full-time registration and reservation services, including provision for late check-in and for other off-hours guest needs. The front desk shall accommodate walk-in rentals. 2. A timeshare lodge development shall contain a sufficient level of recreational facilities and other amenities to serve the occupants, including appropriate facilities for both the winter and the summer seasons. 3. A timeshare lodge in the Commercial Core (CC) zone district shall not have any lodge rooms located on the ground floor. Instead, a timeshare lodge in the CC zone district shall contain at least one of the following elements: a bar, restaurant, or retail facilities. The element(s) provided shall be located along the street front, shall be accessible from the street, and shall be designed to serve the public, not just the occupants of the timeshare lodge. B. Mandatory Operational Practices. The City wants to ensure that the units in a timeshare lodge development are available for rental to the public when they aze not being occupied by the owner, the owner's guests, or persons occupying the unit under an exchange program. The City has identified certain operational practices that will accomplish this intent, which aze listed in this section. An applicant who agrees to include all of the practices listed below in the operation of the timeshaze development shall be deemed to have complied with this intent. The City recognizes, however, that there may be other ways to comply with this intent, and will consider these and other operational practices. Applicants may propose to substitute Timeshare Ord. No. 21, 2002 9 .~. ,.-, ..,.+i one or more of the optional practices listed in Section C., below, for one or more of the mandatory practices listed in this Section B. Applicants may also propose other operational practices not listed in Section C. as a means of demonstrating compliance with this standard. Acceptance of the proposed optional practices as a substitute for one or more of the mandatory practices shall be at the sole discretion of the City Council. 1. Timeshaze estates shall be made available for short-term rental in a managed program when the estate is not in use by the owner of the unit, the owner's guests, or persons occupying the unit under an exchange program. The purchasing disclosure documents shall state that the purchaser must sign an agreement with the management company to rent the estate when it is not being occupied by the purchaser, guests or exchangers. 2. The covenants of the homeowners association shall permit walk-in rental of units. The association shall not limit rental of units to such arrangements as only weekly rentals or Saturday-to-Saturday rentals; instead the association shall permit shorter stays, split-week rentals, and similaz flexible arrangements. 3. Owners of timeshaze estates shall be required to reserve their unit/time sufficiently far enough in advance to enable the public to obtain access to those units that aze not so reserved. 4. The owner of a timeshaze estate shall not be pemutted to occupy that estate for any period in excess of thirty (30) consecutive calendar days. 5. The units that remain in the developer's inventory shall be made available for rental to the public while the estates aze being sold, except for models and other units that are needed for marketing or promotional purposes. 6. Units that are available for rental shall be listed at competitive rates in a central reservation system. Listing of the unit with a recognized central reservation system in Aspen, or through the central reservation system of the company that will manage the timeshare development, is preferred. C. Optional Operational Features. 1. Timeshare lodge developments that subdivide each unit into a lazger number of estates (more than 10 estates per unit) are preferred to those which subdivide each unit into a smaller number of estates (less than 10 estates per unit). 2. Applicants may formulate their timeshare use plan such that the purchaser would not expect to occupy the same unit each visit; instead the purchaser would purchase the right to occupy a certain type of unit for a certain period of time. Applicants Timeshare Ord. No. 21, 2002 9 `~ Y ~,.A may also include provisions in the homeowners association documents prohibiting owners from personalizing the unit they have purchased. Applicants may design their development as a mixed project, which includes not only timeshare units, but also some units that would continue to be owned and operated by the applicant and his successors or assigns as traditional lodge units. Another type of use plan that is encouraged would be for the applicant to agree not to sell all of the shares in every unit, but to instead keep some time reserved for rental to the public at market rates during both the high seasons and the off-seasons. 4. Applicants may decide to sell on and off-season estates as a package. 5. Applicants may include in their use plan provisions that allow for a wide range of exchange opportunities for owners, which will promote new Aspen trials. 26.590.070 Review Standards for Timeshare Lodge Development. An applicant for timeshaze lodge development shall demonstrate compliance with each of the following standazds, as applicable to the proposed development. These standazds are in addition to those standards applicable to the review of the PUD and Subdivision applications. A. Fiscal Impact Analysis and Mitigation. Any applicant proposing to convert an existing development to a timeshaze lodge development shall prepaze a fiscal impact analysis of the proposed development, which demonstrates whether there would be any negative sales, property, or other tax consequences to the City from the approval of the proposed conversion. The applicant shall, as a condition of approval of the timeshaze lodge development, be required to mitigate any negative tax consequences the project will cause. 2. The City of Aspen Finance Deparirnent has created a model which evaluates the tax consequences of a proposed timeshaze conversion. The model evaluates the direct sales tax implications from having fewer days of occupancy by guests that pay sales taxes in a timeshare lodge as compared to a traditional lodge. The model also considers the indirect sales tax benefits that may accrue from increased occupancy in timeshaze lodge units as compazed to other types of accommodations within the City. Finally, the model considers any property tax implications due to the conversion of property that is assessed as a commercial use to property that is assessed as a residential use. Applicants shall meet with the City Finance Department before submitting their timeshare development application to review the model and to understand the factors the City will use in evaluating the tax impacts of their proposal. Timeshare Ord. No. 21, 2002 10 .~ ~~. ti.. ~.~ B. Upgrading of Existing Projects. Any existing project that is proposed to be converted to a timeshare lodge development shall be physically upgraded and modernized. The extent of the upgrading that is to be accomplished shall be determined as part of the PUD review, considering the condition of the existing facilities, with the intent being to make the development compatible in chazacter with surrounding properties and to extend the useful life of the building. To the extent that it would be practical and reasonable, existing structures shall be brought into compliance with the City's adopted fire, health, and building codes. 2. No sale of any interest in a timeshare lodge development shall be closed until a certificate of occupancy has been issued for the upgrading. C. Preservation of Existing Lodging Inventory. An express purpose of these regulations is to preserve and enhance Aspen's existing lodging inventory. Therefore, any proposal to convert an existing lodge or other property that provides short term accommodations to a timeshaze lodge should, at a minimum, replace the existing number of units on the property in the planned timeshaze lodge. If the applicant is unable to replace the existing number of units, then the timeshaze lodge development shall replace the existing number of bedrooms on the property, or the applicant shall demonstrate how the proposal complies with the purposes of these regulations, even though the planned timeshare lodge will not replace either the existing number of units or bedrooms. D. Affordable Housing Requirements. Whenever a timeshare lodge development is required to provide affordable housing, mitigation for the development shall be calculated by applying the standards of the City's housing designee for lodge uses. The affordable housing requirement shall be calculated based on the maximum number of proposed lock out rooms in the development, and shall also take into account any retail, restaurant, conference, or other functions proposed in the lodge. 2. The conversion of any multi-family dwelling unit that meets the defmition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. E. Parking Requirements. The pazking requirement for timeshare lodge development shall be calculated by applying the pazking standazd for the underlying zone district for lodge uses. The pazking requirement shall be calculated based on the maximum number of proposed lock out rooms in the development. Timeshare Ord. No. 21, 2002 it ~ -.~. ~... ~.,~ 2. The timeshaze lodge development shall also provide an appropriate level of guest transportation services, such as vans or other shuttle vehicles, to offer an alternative to having owners and guests using their own vehicles in Aspen. 3. The owner of a timeshaze estate shall be prohibited from storing a vehicle in a pazking space on-site when the owner is not using that estate. F. Appropriateness of Marketing and Sales Practices. The marketing and sale of timeshaze estates shall be governed by the real estate laws set forth in Title 12, Article 61, C.R.S., as may be amended from time to time. The applicant and licensed marketing entity shall present to the City a plan for mazketing the timeshare development. The following mazketing and sales practices for a timeshaze development shall not be permitted: a. The solicitation of prospective purchasers of dmeshaze units on any street, mall, or other public property or facility; b. Sales campaigns using phone solicitations; and c. Any unethical sales and marketing practices which would tend to mislead potential purchasers. 2. Giving of gifts to encourage potential purchasers to attend a sales presentation or to visit a timeshare development is permitted, provided the gift reflects the local Aspen economy. For example, gifts for travel to or accommodations in Aspen, restaurants in Aspen, and local attractions (ski passes, concert tickets, rafting trips, etc.) are permitted. Gifts that have no relationship to the local Aspen economy aze not permitted. The following gifts are also not permitted: a. Any gift for which an accurate description is not given; b. Any gift package for which notice is not given to the prospective purchaser that the purchaser will be required to attend a sales presentation as a condition of receiving the gifts; and c. Any gift package for which the printed announcement of the requirement to attend a sales presentation is in smaller type face than the information on the gift being offered. G. Adequacy of Maintenance and Management Plan. The applicant shall provide documentation and guarantees that the timeshare lodge development will be appropriately Timeshare Ord. No. 21, 2002 12 ,.., .~. managed and maintained in an manner that will be both stable and continuous. This shall include an identification of when and how maintenance will be provided, and shall also address the following requirements: 1. A fair procedure shall be established for the estate owners to review and approve any fee increases which may be made throughout the life of the timeshare development, to provide assurance and protection to timeshaze owners that management/assessment fees will be applied and used appropriately. 2. The applicant shall also provide documentation establishing the adequacy of a reserve fund to ensure that the proposed timeshaze development will be properly maintained throughout its lifetime. H. Compliance with State Statutes. The applicant shall demonstrate that the proposed timeshare lodge development will comply with all applicable requirements of Title 12, Article 61, C.R.S.; Title 38, Article 33, C.R.S.; and Title 38, Article 33.3, C.R.S.; including the requirements concerning the five (5) day period for rescission of a sales contract, and the procedures for holding deposits or down payments in escrow. 1. Approval By Condominium Owners. If the development that is proposed to be timeshared is a condominium, the applicant shall submit written proof that the condominium declazation allows timesharing, that one hundred (100) percent of the owners of the condominium units have approved the timeshaze development, that all mortgagees of the condominium have approved the proposed timeshare development, and that all condominium units in the timeshaze development will be included in the same sales and mazketing program. J. Prohibited Practices and Uses. Without in any way limiting any requirement contained in this Chapter, it is unlawful for any person to knowingly engage in any of the following practices: 1. The creation, operation or sale of a right-to-use interest or any other timeshaze concept which is not specifically allowed and approved pursuant to the requirements of this section. Right-to-use timeshaze concepts (e.g. lease-holds and vacation clubs) aze considered inappropriate in Aspen and aze not permitted. 2. Misrepresentation of the facts contained in any application for timeshaze approval, timeshare development instruments, or disclosure statement. 3. Failure to comply with any representations contained in any application for timesharing or misrepresenting the substance of any such application to another who may be a prospective purchaser of a timeshaze interest. Timeshare Ord. No. 21, 2002 13 .N.. .~, ~.~ <~- 4. Manage, operate, use, offer for sale or sell a timeshare estate or interest therein in violation of any requirement of this Chapter or any approval granted pursuant hereto, or cause or aid and abet another to violate any requirement of this Chapter, or an approval granted pursuant to this Chapter. 26.590.080 Business License and Sales Tax Payments. A. Business License. It shall be unlawful for any timeshaze development to operate in the City of Aspen without first obtaining a business license in accordance with the standard procedures of the City of Aspen. B. Sales Tax Payments. Occupancy of any timeshaze unit by anyone who pays a fee for the use of the unit (other than the owner thereof) shall be subject to the City's sales tax the same as if such occupancy were of a hotel or lodge unit. Any timeshaze development, as a condition of its approval, shall be required to obtain an Aspen Sales Tax/Lodging Tax License, which shall establish how this tax shall be collected and paid to the City. The manager of the association shall be responsible for the timely collection of the City sales tax for the City of Aspen. 26.590.090 Timeshare Documents. At the same time the applicant submits the PUD Development Plan and PUD Agreement to the City for recordation, pursuant to Section 26.445.070, or submits the necessary documents to record the subdivision exemption, the applicant shall also submit the following timeshare documents in a form suitable for recording. The Community Development Director may require the applicant to submit a draft version of these timeshaze documents at the time of submission of the Final PUD application. A. Disclosure Statement. The applicant shall submit a disclosure statement that contains the following information: The name and address of the developer of the timeshare development as well as a summary of the developer's business experience, including all background and experience in the development of timeshare development, and the present financial condition of the developer. 2. The name and address of the manager/management company for the development, if any, and a description of the manager's/management company's responsibilities, powers, duties, authority and business experience. All information on the manager's background and experience specifically related to timeshare development shall be provided. Timeshare Ord. No. 21, 2002 19 ~-.. ~ , ~. 3. The names and addresses of the mazketing entity and the listing broker and a statement of whether there aze any lawsuits pending or investigations that have been undertaken against the mazketing entity or listing broker, and if so, a description of the status or disposition of said lawsuits or investigations. A summary of the marketing entity's business experience including all background and experience related to timeshare development. 4. A description of the timeshaze units, including the developer's schedule for completion of all buildings, units, and amenities, with dates of availability. 5. If the timeshare plan consists of a condominium or a similar form of ownership, a description of the development and any pertinent provisions of the condominium instruments. 6. Any restraints on the transfer of the purchaser's interest in the timeshaze units or plan. 7. The timeshare use plan, which shall include a description of the rights and responsibilities under the plan. 8. Notice of any liens, title defects or encumbrances on or affecting the title to the units or plan and, if there are encumbrances or liens, a statement as to whether, when and how they will be removed. 9. Notice of any pending or anticipated legal actions that aze material to the timeshare units or plan of which the applicant has, or should have, knowledge. 10. The total financial obligation of the purchaser, which shall include the initial price and any additional charges to which the purchaser may be subject in purchasing the unit. 11. An estimate of the dues, maintenance fees, real property taxes, sales taxes, real estate transfer tax and similar periodic expenses, and the method or formula by which they aze derived and apportioned, which shall include whether maintenance fees are detemuned by unit, time of yeaz, or prorated shaze of the overall maintenance costs, or any other means utilized to compute maintenance fees. 12. A statement demonstrating the manner in which management/assessment fees will be held, utilized and accounted for. 13. A description of any financing offered by the applicant. Timeshare Ord. No. 21, 2002 15 14. The terms and significant limitations of any warranties provided, including statutory warranties and limitations on the enforcement thereof or on damages. I5. A statement that the proposed development will comply with all applicable requirements of Title 12, Article 61, C.R.S. Upon request from the City, the applicant shall provide a copy of the documents submitted to the State of Colorado for the registration and certification of the timeshaze developer. 16. The extent to which a timeshare unit may become subject to a tax or other lien arising out of claims against other timeshaze owners of the same timeshare unit. 17. The minimum percentage of units the developer will require be sold before the developer will proceed with the completion of the timeshare development. 18. A description of the maintenance to be supplied to the timeshare development, including how and when such maintenance will be provided. 19. Whether any or all the units in the proposed development will be available for participation in an exchange program. The applicant shall disclose which exchange program(s) the timeshaze estate owners will be eligible to utilize. 20. A description of all insurance covering the property. 21. A description of the on-site amenities and recreational facilities which are available for use by the unit owners. All on-site amenities shall be owned by the homeowner's association and the developer shall not be allowed to chazge any additional fees for use of the amenities. If there aze any off=site facilities that aze related to the property, these shall also be described, including a summary of any fees that timeshaze owners would have to pay to use those off-site facilities. 22. A statement that any timeshare interest shall be expressly subject to all requirements and representations set forth in the disclosure statement, which shall be placed of record with the Pitkin County Clerk and Recorder. 23. For any timeshare development that is a conversion of an existing project, a statement shall be provided by the developer, based on a report prepazed by an independent azchitect or engineer, licensed by the State of Colorado, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the timeshare units. The statement shall also provide a list of any outstanding notices of uncured violations of building code or other municipal regulations, together with the estimated cost of curing those violations. Timeshare Ord. No. 21, 2002 i6 .-~ . ,. ~~. .~~ B. Timeshare Development Instruments. The applicant shall submit the following timeshare development instruments: L Instruments for the interval estate or time span estate including: a. The legal description, street address or other description sufficient to identify the property. b. Identification of timeshare time periods by letter, name, number or combination thereof. c. Identification of the timeshaze estate and the method whereby additional timeshaze estates may be created. d. The formula, fraction or percentage of the common expenses and any voting rights assigned to each timeshaze estate. e. Any restrictions on the use, occupancy, alteration or alienation of timeshare units. f Any other matters that the applicant or the City Council deems reasonably necessary. 2. All timeshaze development instruments shall provide for the following: a. That a homeowners association shall be established. Title to the common areas of the development and responsibility for maintenance of the development shall reside within the association. The association shall designate a managing agent. The management contract with the managing agent shall allow for either party to terminate, for cause, upon sixty-f69~ thirty (30) days notice. In the event the manager is terminated, a new managing agent shall be designated as quickly as possible by the association. Any management agreement shall specify the managing agent's duties and responsibilities to maintain the development. b. A stipulation by the owner of the timeshare interest irrevocably designating the homeowners association and/or the managing agent as an agent for the service of legal notices for any legal action, proceeding or hearing pertaining to the timeshaze interest or for the service of process (in a manner sufficient to satisfy the requirements of personal service in the state, pursuant to Rule 4 C.R.C.P., as amended). c. Each timeshaze interest with a multiple ownership shall be required to Timeshare Ord. No. 21, 2002 17 ,~ designate one managing agent as the spokesperson and voter for all of the owners involved. d. That the association shall have the ability to compel a timeshaze owner to pay maintenance fees and if any owner's fees are not paid, his interest shall be subject to a lien and foreclosure or other divestment. In the event an owner or his guests violate the rules and regulations of the association, the association shall have the right to enjoin the violation and the prevailing party in such suit shall be awazded his court costs and reasonable attorney's fees. e. Provisions addressing reconstruction or repair of all or a portion of the timeshaze development following its willful or non-willful destruction. Provisions should also be included addressing termination of the association, including the percentage of owners that must agree for the termination to become effective, what happens to the common elements in the event of a termination, and how the proceeds shall be distributed in the event the property is taken due to condemnation or eminent domain. 3. Updating and filing. a. The developer and his successors and assigns (other than individual unit purchasers) shall have a continuing duty to update the disclosure statement and file with the City all amendments to the timeshaze development's instruments. Such amendments shall comply with the requirements of this section. No amendment which shall significantly alter the disclosure statement or the timeshaze development instruments shall be effective unless approved and accepted by the City and filed in the office of the Pitkin County Clerk and Recorder. All amendments shall be initially submitted for review to the Community Development Director who shall have authority to either approve a proposed amendment as in compliance with the requirements of this section or refer the proposed amendment for appropriate subdivision or PUD approval. b. Fhc-foregoing--updating-arid--filing-~equi Ingle-unit ewner~ I=Iewgv~~~ The condominium association and/or the homeowners association, or both if there be multiple associations, and not individual unit owners, shall have the continuing responsibility to update the filing, the disclosure statement, and any amendments to the condominium documents and/or timeshaze development instruments with the City and, subject to applicable City approvals, to file the same in the Office of the Pitkin County Clerk and Recorder as soon as practicable after City approval has been granted. Once the condominium association has been formed, the City shall Timeshare Ord. No. 21, 2002 la .~~ not accept any amendments for review without prior approval thereby. 4. Before transfer of a timeshare unit and no later than the date of execution of any contract of sale, the applicant or any other seller of a timeshaze unit shall provide the intended transferee with a copy of the disclosure statement and any amendments thereto, except this requirement shall not apply to the owner of a single timeshaze estate in a development who is attempting to sell the estate. 5. No conveyance of a timeshaze interest shall be valid unless the instrument of conveyance shall indicate that title is being transferred subject to the condominium declazation which shall include the disclosure statement as an exhibit thereto. Cerfinn 2e That the following definitions be revised or added to Section 26.104.100 of the Aspen Municipal Code: Timeshare Lodge. A development or a unit that has been approved for timesharing, pursuant to Chapter 26.590, and has the characteristics of a timeshaze lodge, as specified in Section 26.590.060. Each unit in a timeshare lodge shall be subdivided into no less than seven (7) time span or interval estates. A timeshare lodge unit may contain a kitchen and still be considered to be a lodge unit (not a residential dwelling unit) for purposes of this Land Use Code (although the City's adopted building codes will consider a unit with a kitchen to be a dwelling unit, and the City may, therefore, require it to comply with the applicable provisions of those codes for a dwelling unit). Lodge. Same as hotel. Certinn 'i~ That Section 26.710.320 B.1. of the Aspen Municipal Code, permitted uses in the LP Zone District, be amended to read as follows: 1. Lodge, provided: a. All lodge units within the LP Overlay Zone District may have kitchens within individual lodge rooms. b. All lodge units must be available for overnight lodging by the general public on a short-term basis for at least six (6) months of each calendar year. This requirement shall not apply to a timeshaze lodge. Crrfinn d~ Timeshare Ord. No. 21, 2002 19 That Section 26.710.190 D.2.d. of the Aspen Municipal Code, minimum lot area per dwelling unit requirement for lodge units in the L/TR Zone District, be amended to read as follows: d. Lodge units (including timeshare lodge units). No requirement. Whenever kitchen facilities are installed in a lodge unit in the L/TR zone district, such unit shall be deemed a multi-family dwelling unit, and the lodge shall be required to satisfy the minimum lot azea requirements for amulti-family dwelling, as provided above, unless the development is a timeshaze lodge, which shall have no minimum lot area per dwelling unit requirement. Section 5• That Sections 26.710.140 C., 26.710.190 C., 26.710.200 C. and 26.710.320 C. of the Aspen Municipal Code be amended to delete "timesharing" as a conditional use. Section 6• That Sections 26.710.140 B., 26.710.200 B., and 26.710.320 B. of the Aspen Municipal Code be amended to add "timeshaze lodge" as a permitted use, and that Section 26.710.190 B. of the Aspen Municipal Code be amended to add "timeshare lodge" and "exempt timesharing" as permitted uses. Section 7: That Section 26.480.030 A. of the Aspen Municipal Code, General Exemptions, be amended to add a new sub-section 5., to read as follows: 5. Exempt Timesharing. The creation of time-span estates that comply with the requirements for exempt timesharing, pursuant to Section 26.590.030 of the Code. This subdivision exemption shall not be used to create any new lots or dwelling units. Section 8• That sub-section A. of Section 26.480.040 of the Aspen Municipal Code, Procedures for Review, be amended to read as follows: A. Lot Line Adjustment and Exempt Timesharing. After an application for a lot line adjustment or exempt timesharing has been determined to be complete by the Community Development Director, the Director shall approve, approve with conditions, or deny the application. Crrtinn 9~ That a new sub-section 22. be added to Section 26.510.030 B. of the Aspen Municipal Code, Exempt Signs, to read as follows: Timeshare Ord. No. 21, 2002 20 22. Timeshaze identification signs. A building that is approved for exempt timesharing, pursuant to Section 26.590.030, may shall have awall-mounted sign with an azea not exceeding two (2) square feet, stating that it has been approved for timesharing and identifying the name and phone number of a contact person or management entity for the property. Section 1D~ That Section 26.470.070 O. of the Aspen Municipal Code, Conversion of Lodge Reconstruction Credits to Residential Dwelling Units, be repealed. Section 11: That the City Clerk is directed, upon adoption of this Ordinance, to record a copy of this Ordinance in the office of the Pitkin County Clerk and Recorder. Section 12~ This Ordinance shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 13: If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a sepazate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. Section 14: A public hearing on the Ordinance was held on the _ day of , 2002 at 5:00 in the City Council Chambers, Aspen City Hall, Aspen Colorado, fifteen (15) days prior to which hearing a public notice of same shall be published in a newspaper of general circulation within the City of Aspen. INTRODUCED, READ, AND ORDERED PUBLISHED as provided by law, by the City Council of the City of Aspen on this 24'" day of June, 2002. Attest: Timeshare Ord. No. 21, 2002 zi .,. .., Kathryn S. Koch, City Clerk Helen Kalin Klanderud, Mayor FINALLY, adopted, passed and approved this _ day of , 2002. Attest: Kathryn S. Koch, City Clerk Approved as to form: John Worcester, City Attorney Helen Kalin Klanderud, Mayor Timeshare Ord. No. 21, 2002 22 ASPEN PLANN$rG & ZONING COMMISSION`~Minutes JUNE 4 2002 COMMISSIONER, STAFF and PUBLIC COMMENTS ........................................ 2 DECLARATION OF CONFLICTS OF INTEREST ............................................... 2 311 FIRST STREET REZONING and LAND USE CODE AMENDMENT......... 3 FRACTIONAL OWNERSHIP CODE AMENDMENTS ........................................ 4 1 ~~ ~LJ i~ r*+ „~ ASPEN PLANNING & ZONING COMMISSION~Minutes JUNE 4, 2002 Jasmine Tygre opened the special Planning and Zoning Meeting after the Growth Management meeting in Sister Cities Meeting Room with Eric Cohen, Ruth Kruger, Bert Myrin, Ron Erickson and Steven Buettow. Roger Haneman was excused. Staff in attendance were: David Hoefer, Assistant City Attorney; James Lindt, Amy Guthrie, Community Development; Kathryn Koch, City Clerk. COMMISSIONER, STAFF and PUBLIC COMMENTS Ron Erickson asked to have city council review single-family residences in the commercial core. Amy Guthrie noted that the office district might present some problems for historic homes. Erickson said that he did not think that this was very controversial. MOTION: Ron Erickson moved to ask staff to begin review of a code amendment to no longer allow single-family residences in the commercial core, lodge and office zone districts. Bert Myrin seconded. APPROVED 6-0. Erickson asked if a rigid structure that covers an open space was an awning or a roof? Amy Guthrie responded that it was a roof. Guthrie said that she spoke to Harley Baldwin and he had some thoughts about how to comply; he has one month to comply. David Hoefer stated that the court case was continued for one month. Steven Buettow stated that his appointment was finished and this was his last meeting as a P&Z Member. Buettow said that this was a great honor and enjoyed working with all people from the different commissions and staff. He noted that eight years went by fast and said that he had the confidence in the commission to strive to make all of the projects the best as possible. Bert Myrin asked if Steven had served on any commissions or boards that needed a replacement for him. Buettow replied that he was the chair for DRAC; he served on the Burlingame COWOP, implemented the Residential Design Standards and with P&Z accomplished the Physics Building, Music Tent, West End Transportation and Snyder projects to name a few. Buettow encouraged the commission to stay involved in the COWOP process, especially since the projects may not come though the full P&Z review after COWOP. DECLARATION OF CONFLICTS OF INTEREST None stated. 2 PUBLIC HEARING: ~.. Minutes 2002 311 FIRST STREET REZONING and LAND USE CODE AMENDMENT Jasmine Tygre opened the public hearing. David Hoefer noted that proper notice was provided and the commission had jurisdiction to proceed. Amy Guthrie said that the property was just less than 7,000 square feet and zoned R-15; the property was non-conforming in every possible way. The lot was not a large enough parcel for the zone district; there were 3 units on the parcel where only 1 was permitted. Staff has been in an enforcement action to have the property become more in compliance with the underlying zoning; the result has been to rezone to RMF, which exists around the neighborhood. Two units would be allowed the existing Victorian brick house and a modern building constructed next to it, which would bring the property into compliance. Guthrie said that the code amendment was discussed in a prior work session to allow acash-in-lieu payment as a form of mitigation in the RMF zone district; currently an ADU was the only allowable form of mitigation, which was not consistent with what other neighborhoods were allowed. Guthrie noted that an ADU on this site would add to the over-crowding and density on this site. Guthrie stated that the brick historic house and the new brick home were currently connected but that connection would be demolished, which HPC viewed as good thing to allow the historic structure to be returned to a smaller structure. Guthrie said that HPC was reviewing the FAR from the demolished connection to create a garage. David Hoefer said that there were 2 resolutions for this project. Raul Gawrys, architect, stated that what was presented summed up what the applicants wanted. Gawrys said that it was disgraceful to have the two buildings connected and thought that there should be a separation of landscaping and fencing to give an individual identity to the 2 pieces. Gawrys said that they were trying to correct mistakes made by prior owners. Guthrie said that in the RMF zone district the lot was large enough to subdivide or condominiumize. Gawrys thanked staff. Myrin asked if some of the space could be converted to an ADU rather than adding onto the building to work for the mitigation. Guthrie replied that would not really work because to receive any bonus for an ADU it had to be completely detached and mandatory deed-restricted. 3 ...., --, ASPEN PLANNING & ZONING COMMISSION~Minutes JUNE 4, 2002 No public comments. There was discussion of a lot split over condominiumization, the physical restraints on the property with the existing size of the buildings, no objections were raised for the change to the RMF zone district and the cash-in-lieu housing recommendation was acceptable. MOTION: Ron Erickson moved to approve P&Z Resolution #02-17 and to recommend City Council approve the rezoning from R-15 to RMF for a property located at 311 S First Street (2735-124-68-004). Steven Buettow seconded. Roll call vote: Kruger, yes; Myrin, yes; Cohen, yes; Erickson, yes; Buettow, yes; Tygre, yes. APPROVED 6-0. MOTION: Ron Erickson moved to approve P&Z Resolution #02-18 and to recommend City Council approve amending Section 26.710.090(B)(7) allowing cash-in-lieu as an acceptable form of housing mitigation at 311 S First Street; Ruth Kruger seconded. Roll call vote: Erickson, no; Cohen, yes; Kruger, yes; Myrin, yes; Buettow, yes; Tygre, yes. APPROVED 5-1. Eric Cohen said that he wanted to recommend that Council look at the cash-in-lieu one more time before it be accepted. CONTINUED PUBLIC HEARING (05/21/02): FRACTIONAL OWNERSHIP CODE AMENDMENTS Jasmine Tygre opened the continued public hearing on Fractional Ownership. Alan Richman stated that there were a few changes from the last hearing beginning on page 3 of the resolution in the overview section the word building was changed from pxejee-t. Under review standards for exemption # 1. the proposal shall not conflict with any applicable deed-restriction or private covenants language was added. On page 5 item #6 the sign was mounted on the building not on each units in the building. Page 6 under item "C" Management Plan was a new area added. On page 8 #B 1 the last word exchangers and #B3 sufficiently far enough in advance was added. On page 18 under the definition of Timeshare Lodge the language was modified to under the city's discretion as to whether it complies with the provisions. Staff researched timeshare in the RFM zone district and amended that multi-family units would be allowed in the LTR zone district. Joyce Olson distributed maps of the LTR and RMF zone districts. Ohlson said that there were exemptions that 4 ,~,. ,.., ASPEN PLANNING & ZONING COMMISSION Minutes JiJNE 4, 2002 could be applied to deeds that were divided with LLCs, duplexes, single-family homes and multi-family condos that currently existed with 6 units or less in the LTR zone. Ohlson said that the geographically the LTR zone was the best area because of the general statement of the LTR zone district. There was a coinciding spreadsheet that had the number of units and number of buildings with 6 or less units. Alan Richman said that there were 25 buildings in the LTR zone that could be exempted. The exempt projects do not have to have a front desk. Ohlson noted that the affordable housing units would not be allowed in the exemption. There were approximately 130 units that could be exempted through this process for timeshare. Ohlson said that the RMF district was out of the scope; the timeshare was focused on the core areas of the city and Aspen Highlands Village. Ohlson distributed maps of the zone districts. The conversion required replacement of affordable housing. Tygre asked why RMF was included. Ohlson and Richman responded that was not decided as yet, but the public was here to address that issue. Eric Cohen asked about the areas north of the river and there may be a few buildings west of the core, but he wouldn't go north of the river. Ron Erickson excused himself. Bert Myrin said that to extend the incentive for nightly stays to the RMF area had a big impact and changed the neighborhood and made it less desirable. Myrin agreed with the LTR but not the RMF because of the displacement of some community that was established in the area. Tygre said the purpose of enacting the timeshare legislation was to provide hotbeds; it was always part of the planning that hotbeds should be located near the facilities and the downtown core. Tygre noted that LTR made sense just as an option but to let everybody go into timeshare, there would be the risk of turning residential neighborhoods into tourist orientated neighborhoods. Tygre said that there was only so much audience available for the competition; tourists should be at the base of the mountain. Tygre said that leading into the RMF would lead to the profit taken by people being bought out of their houses because of the economics. Tygre noted that the area east of town was residential since the 1970's and many properties around East Hopkins had 6-month rental restrictions. Tygre stated that the incentives should occur in the areas where tourism was most appropriate in the LTR zone districts with plenty of opportunities for timeshare. 5 . a ,-., ASPEN PLANNI~G & ZONING COMMISSION~`~Minutes JUNE 4, 2002 Ruth Kruger agreed with supporting the exemption for the LTR zone district but not the RMF at this time. Kruger said that she also supported the residential character of those areas in the RMF at this time. David Mylar, public, introduced his client Charles Kennedy; he stated that he was present in the broader context because the subject was of great interest to him. Mylar said that he appreciated the opportunity to work with staff on the fashioning of this regulation. Mylar and Kennedy encouraged the expansion of the eligible area for the exempt timesharing to at least the portion of the RMF zone south of Cooper Street, the extension of Highway 82, which had demarcation of properties over time primarily second homes and tourists. Mylar said that there was no fundamental difference between properties on East Durant two blocks from the Gondola and ones in the LTR zone district, both would achieve the objective if allowed the exemption under this provision. Mylar said that he appreciated the limited scope of applicability of this experiment but until the results were in, then they could see if they were what was expected. Mylar said that it should be made big enough that there would be results; maybe there wasn't enough information as to which properties were eligible, not technically but practically for conversion. Mylar said that if the properties with housing replacement options were subtracted out or too small and in poor physical condition, there may not be that many viable units for the conversion market. Mylar said that by reducing the scope of the exemptions by reducing the size of the project makes more sense than reducing the area within which the exemptions would be applicable. Mylar said that 6 was a good number for the number of fractions as a maximum for previously condominiumized properties. Mylar said that people wanting to make an investment in Aspen and the community would buy these units. Mylar said that the market has not yet been tested. Scott Writer, public, said that one thing that was important in planning was to support a middle class in Aspen with a place to live rather than moving down valley to own a home. Writer said that he generally reacted negatively to provide an exemption and would rather see the project go through afull-blown process so the neighbors could have an opportunity to have input. Tygre said that an experiment that could have a lot of consequences should be started small and if successful then expand it rather than going big and pulling back. Tygre said that existing hotel sites were appropriate and to expand to LTR projects was the next logical place for the exemption. 6 ASPEN PLANNI~ & ZONING COMMISSION rfi~Iinutes JUNE 4, 2002 Mylar reiterated that this should be related to units that were already short-term rental and should not encourage the loss that could be available for long-term residents. Mylar suggested that special review or staff review because no judgment call would be required; it should be determined by circumstances with criteria as part of this review. Tygre noted that was very difficult to determine. Charles Kennedy, public, stated that he was a resident and contacted Dave Mylar because of a building that he had that would be a perfect opportunity for this kind of exemption. Kennedy said that there probably would not be a mad rush for this kind of exemption or enough buildings that were eligible for this exemption. Richman asked for the conditions that would be applicable. Tygre responded that she was reluctant to go any further on conditions without Ron and Roger's experienced input. Kruger agreed. Ohlson stated that it would allow some fine- tuning and rewritten conditions to review. Cohen agreed to revisit the criteria and to look at the multi-building projects, geographic area, better definitions and language on the whole. Ohlson noted that P&Z met with council next Tuesday (6/11) for a work session at 4 pm; she said that this topic could be continued to after that meeting at 5:30. Richman said that the last item was multi-family units in the LTR zone, which was to be addressed during the in-fill amendments. Myrin noted that this encouraged hotels to convert into a different kind of hotbed; the hotel hotbed did not require a retail space downtown that could have been shopped as a retail store downtown. Myrin said that the timeshare hotbed changed the vitality of the downtown core and community character. MOTION: Bert Myrin moved to continue the public hearing for the code amendment on Timeshare to June 11, 2002 after the work session with city council; seconded by Ruth Kruger. APPROVED 5-0. MOTION: Ruth Kruger moved to adjourn. Steven Buettow seconded. APPROVED 5-0. Tygre noted that the purpose and intent was clearly stated. Richman replied that the commission expressed the goals very clearly early on in the process. Transcribed by Jackie Lothian, Deputy City Clerk 7 ASPEN PLANNING & ZONING COMMISSION `°Minutes JUNE 11.2002 Jasmine Tygre opened the special Planning and Zoning Meeting at 5:15 p.m. after the work session with City Council in Council Chambers with Bert Myrin, Ron Erickson, Ruth Kruger and Roger Haneman. Eric Cohen was excused. Staff in attendance were: Joyce Ohlson, Community Development; Jackie Lothian, Deputy City Clerk. A1~ ~ ~ MOTION: Ron Erickson moved to approve the minutes 2002; seconded by Ruth Kruger. APPROVED 5-0. MOTION: Bert Myrin moved to approve the minutes from May 28, 2002; seconded by Ruth Kruger. APPROVED 5-0. DECLARATION OF CONFLICTS OF INTEREST None stated. CONTINUED PUBLIC HEARING (05/21/02 and 06/04/02): FRACTIONAL OWNERSHIP CODE AMENDMENTS Jasmine Tygre opened the continued public hearing on Fractional Ownership. Tygre explained that the exemptions were covered in the last meeting and the rest of the commission wanted to get input form Ron and Roger prior to the approval of the code amendments. Alan Richman noted that staff had additional research to provide the commission with additional information on the RMF zone district for the exemption to apply with conditions. Joyce Ohlson stated that the statistics were drawn from GIS in conjunction with assessors' plats, which produced 2 maps showing geographic boundaries along with a tally sheet of the number of buildings and the number of units in the (R/MF) Residential Multi-family Zone District. Richman noted that the criteria may not work on the west side but could possibly work on the east side. Ohlson said that if Cooper was used because it was closer to the activity center then it negates inclusion of these. Ron Erickson said that if second homes were to be timeshared they would probably get better usage. Erickson reviewed the list of condominiums pointing out the long-term residences; he said that he was not in favor of converting long-term local housing to timeshare. Erickson said that the LTR zone district was for the most part short-term rental properties; he said that more short-term rental properties were needed (studios, one and two bedrooms). Richman said that a member of the public asked about a certain area of the RMF zone district being included and it was up to the planning and zoning commission to decide if there was any interest ASPEN PLANNING & ZONING COMMISSION `'dMinutes JUNE 11, 2002 in pursuing the RMF zone district's inclusion or exclusion in the adopted resolution. Ohlson noted that only condominiums were to be included in the exemption. Richman stated that state law required that the buildings be condominiumized for the timeshare exemption. Richman reiterated that the question on the table, which was to limit th exemption to the LTR or expand to RMF. Ohlson said that there were 38 units on the south side of Cooper that could potentially convert. Erickson stated that he did not want to reduce the bed base in the RMF zone because condominiums haven't been built in the last 25 years. Ruth Kruger said that there would probably be many properties in the LTR zone district at the base of the mountain; she said that maybe this could be watched to see how it does in this zone district meeting the requirements of the exemption. Richman said that the properties that were eligible for the exemption were in the table and met the standards and on page 3 of the resolution for properties with 6 units or less in the LTR zone district. The sentence at the top of page 3 The City also intends to provide protection for its long term residential neighborhoods, to ensure that the impacts of timeshare development do not adversely affect the character of these residential areas by limiting the use to City's Lodging Commercial Zone districts was added. Kruger asked how the city would protect the long-term residences. Richman replied that by limiting timeshare to the LTR commercial zone districts. Roger Haneman said that he agreed with not going into the RMF with timeshare at this time; he did not want to see a reduction in the bed base and did not see any protection for that in the resolution. Haneman voiced concern for buildings going from 20 units down to 10 units when one of the goals was to preserve and enhance lodging inventory; there was nothing that would protect the current bedroom count, which would enlarge the units but not necessarily benefit the town. Ohlson replied that at a minimum it would turn into 7 owners per unit with a timeshare. Kruger said that maybe there would be an incentive to create more bedrooms. Richman said that presently there was a density penalty in the LTR which basically doesn't allow as many bedrooms as you may want; one bedroom per 1,000 square feet, which would be deleted in the conversion. The commission agreed that incentives, desirability, intent to be the same number of bedrooms or an increased number of bedrooms, for sale purposes, density and evaluation points would become part of the standards for review. Charles Kennedy, public, stated that he remodeled properties and was intrigued by the timeshare aspects. Kennedy said that what he wanted to do paralleled what the 2 ASPEN PLANNING & ZONING COMMISSION `"`Minutes JUNE 11, 2002 commission wanted to do, which was to take single-family properties that were not being used very much and convert them into luxury homes sold to 4 or 5 people with deeded interests. Kennedy said that if someone were allowed to step forward and apply based upon the building, upon the rental of the building that could add to the vitality of the neighborhood that the commission sought. Kennedy said that he wanted to take the steps; there were 4 units in this building and knew of 2 that may want to do this. Kennedy said that if there were language for site specific, this would apply to luxury properties. '_` ~ Bert Myrin said that an LLC couldn't be prevented from doing this; he aske t~~ advantage of a deeded inertest. Kennedy replied that he did not want to go wn ~a=-~ the securities path and did not want to do anything against the community. Kennedy gave a scenario of his plan with a deeded interest. Tygre stated that the original task was to develop the appropriate regulations for timeshare lodges and this has gone way beyond that. The commission felt uncomfortable in venturing into other areas that maybe very innovative and creative. The purpose of the charge was to revitalize the lodges in the LTR zone district by allowing with the appropriate recommendations for the regulation for the lodges that wanted to convert to timeshare. Also the language of not losing the bedrooms was an addition. The commission discussed lock-offs, size of the rooms, size of units, 2 and 3 bedroom condominiums, 4 to 5 bedrooms not needed, studios and 1 bedrooms were needed, room verses unit. Ohlson said that the occupancy level was what was important. Richman noted the additional changes on page 3 were T~,.° °':~:,.'° F ~',,° °~^*~^^ ~''° ~~^~~^ ^''^"''° replaced with Exempt timeshare. Page 19, section 6 identified that exempt timesharing was a use permitted only in the LTR zone district. Myrin said that the timeshare offices in town decreased the vitality and decreased the community character; he said that the offices should be in a hotel room on site or on the second floor of a building or outside the commercial core. Myrin said that he didn't know if there was a way to address this issue in this resolution rather than wait until another ordinance came along, there was a tremendous impact on commercial core. Myrin said that these projects require an office in town unlike a hotel or luxury apartment. Richman said that they were required to disclose the offsite location of the office but there was no review standard at this point; he said that this would be handled in the infill review. Erickson said that he understood Bert's concern but felt that it was a separate issue and he didn't think that just 3 ASPEN PLANNING & ZONING COMMISSION "Minutes JUNE 11, 2002 timeshare offices should be restricted but maybe all real estate offices in the commercial core should be restricted. Erickson said that would be a difficult piece of legislation and he said that he did not want this piece of legislation delayed or muddied by this issue. Erickson noted that it was an ancillary problem but was not restrictive to just timeshare office. Myrin stated that the timeshare office was a highly intensive sales office unlike a regular real estate office because many shares of each unit had to be sold; he felt it was a direct impact of this ordinance on how it changed town. Myrin said that he could not support passing the ordinance unless there was something to mitigate the impacts of the vitality and character that it was zapping from the core. Kruger said that this was not the sale of a one time residential home or condominium but the sale of something more viable to the community than a home that was used one month a year. Kruger agreed with Ron on the legislation that has been labored over for a long time and needed to be put in place; this was to be addresses as a separate issue. Kruger said that it was viable retail space that was used to sell property. Tygre commented that Bert's point of view was well taken but should be kept as a separate issue and considered in the infill review. MOTION: Ruth Kruger moved to approve P&Z Resolution #16, series 2002 as amended. Seconded by Ron Erickson. Roll call vote: Haneman, yes; Kruger, yes; Erickson, yes; Myrin, no; Tygre, yes. APPROVED 4-1. MOTION: Ron Erickson moved to adjourn at 6:30 p.m. Bert Myrin seconded. APPROVED. S-0. Jackie Lothian, Deputy City Clerk DRAFT 4 -~ ,..~ CUTHBERT L. MYRIN JR. 300 PUPPY SI~RTH ST. #203-101 ASPEN, COLORAD081611 TELEPHONE: (97O) 9Z$-2691 FACSIMrz.e: ($62) 268-9628 E-MAIL: BERT A~MYRIN.COM June 18, 2002 City Hall Galena Street Aspen, Colorado 81611 RE: Timeshare Ordinance - Vitality and Community Character Dear Madam Mayor and Council Members The Timeshare Ordinance addresses many concerns including "hot beds" and "new trials." However, it does not acknowledge adverse impacts on our retail core. This ordinance will encourage timeshare conversion and development and provide such wealth to a timeshare developer that the developer can pay more for a sales office than a retail tenant can in our downtown core. Historically relatively few real estate offices (non-timeshare) have replaced retailers. Despite the justification of enabling the revitalization of hotel rooms, the success of a timeshare requires an enormous sales force. A property is broken down into room size pieces and those pieces are then broken down into blocks of time which each must be sold. While Aspen prevents timeshare salespeople on the street, it is endorsing an ordinance and the corresponding wealth to allow a timeshare sales office to replace our retailers. Whether vitality and community character in the core along with retail stores generating sales tax is a priority to the City is a decision for Council to make. I would have supported the Timeshare Ordinance if it had acknowledged this direct impact perhaps by limiting sales offices to within the timeshare property itself or restricting them to non-ground floor space in the core. Very truly yours, ~~/`~ CUTHBERT L. MYRIN JR. Enclosure ~X~1 ~1 ~ ~ ,~, .~~ Chapter 26.590 TIMESHARE DEVELOPMENT 26.590.010 Purpose and Intent. The purpose of this chapter is to establish the procedures and standards by which timeshare development may be permitted within the City of Aspen. It is the City's intent to establish timeshare regulations that provide for the protection of the chazacter of Aspen as a resort community, and that help to promote increased tourism and vitality within the City. Specifically, the City intends that new timeshare projects in Aspen will implement the goals of the As en Area Community Plan, and will help to achieve the following public purposes: imeshare developments can provide the opportunity for increased ourtsm o pen, can add to the level of community vitality, and can help to create a more sustainable local economy. This can be accomplished by expanding the number and variety of "hot beds" available to visitors, raising occupancy levels in the accommodations sector, and attracting "new trials" to Aspen, from persons who have not previously visited this community. B. Preserve and Enha~ace Lodging Ltventory. Aspen's tourist accommodations inventory has for some time included a significant percentage of traditional lodges. The community would like to preserve and enhance this lodging inventory, by encouraging timeshare units to be contained in projects that look and operate in a manner similar to Aspen's traditional lodges. These regulations have been designed to accomplish this purpose by establishing standards for the physical and operational features of timeshare lodges, to ensure that new and re-developed timeshare lodges maintain Aspen's lodging traditions. C. Upgrade Quality of Accommodations. It is important to Aspen's tourist economy that its accommodations are kept up-to-date. Timeshare development offers the opportunity to infuse capita] into the short term accommodations inventory, so facilities can be modernized. It is equally important to ensure that once facilities are upgraded, the facility is managed to provide a quality visitor experience over time. These regulations are intended to ensure that timeshare lodges are properly ' g~g Aspen has a valued reputation as a quality resort community.-'1' a ~ty mten s to regulate timeshare marketing and sales practices, to ensure that the way timeshare units are marketed and sold is consistent with the character of this community, and to minimize the potential for practices that would create an inappropriate image of Aspen. N7rst Drag of Revisions to Aspen's Timeshare Regulations - 3/26/02 Page 1 f nw.. ~..` ll ~~ ~. ~ ~~ ~~ .•.~ ~ .; ~~ /" ~~z~,~ .. ~ ~~ ., Z 2 :~ ~" r ~`~` ~ ,,a w pN S N pyp7 n V r~V/ x.. .Y ~~ ~ MEMORANDUM TO: Aspen Planning and Zoning Commission THRU: Joyce A. Ohlson, Deputy Planning Director~7 FROM: Alan Richman Planning Services SUBJECT: Section-by-Section Summary of the Proposed Resolution DATE: May 16, 2002 Attached for your review is a Resolution that contains the proposed changes to Chapter 26.59Q, Timeshare Development, and associated sections of the Code. The Resolution is similar to the draft of the regulations you reviewed at the work session held on March 26. The language has been revised in response to the comments made at the work session. Further changes were made based on direction provided by the City Manager, City Attorney, and Community Development Director at a follow-up meeting I held with them. The key principles these senior staff members directed me to implement are as follows: 1. L/TR is a zone district with a limited area, and limited remaining development potential. It is critical to the economic viability of Aspen as a resort community, since it is the place where much of the community's tourist inventory is located. Therefore, future development in this zone district must support the tourist economy, and not result in the loss of additional lands to second homes that are occupied during a limited portion of the year. Consequently, the group decided to recommend elimination of the opportunity to develop any new multi-family developments in the L/TR zone district, but to maintain existing L/TR uses as conformine uses, with all of the rights these uses have today (remodeling, additions, creation of new units, etc.). The group also supported repeal of the recently adopted GMQS exemption that allows lodge reconstruction credits to be converted to residential units. 2. In our earlier discussions with the Planning and Zoning Commission, we had decided not to address timeshare conversions of single-family and duplex dwellings, out of the belief that this was a minor issue compared to lodge conversions, and that we should focus our attention on lodges first. Staff was not comfortable with this conclusion acid felt that the City should address these conversions in a simple, but limited manner. One benefit to the City of doing so is it provides the opportunity to keep track of the units so converted, so over time the City can monitor whether this activity is becoming a problem. It also provides the City with the opportunity to implement some effective standards to better manage this activity, so it will not have significant impacts on the City's residential neighborhoods. This procedure will also be of benefit to applicants, who would prefer to be able to provide a deed for the interests they convey, rather than enter into apartnership-type of interest. ~-~ ,.., e.r ~,, 3. As an outcome of these two directions, the group also decided to recommend establishing a minimum standard for the number of estates for each timeshare lodge unit. The minimum standard proposed is 7 estates per -unit. Following this meeting, I held several additional meetings with Community Development Department staff to revise the text of the proposed Code Amendments. Considering all of this work, and considering the findings contained in our original research paper (Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options, January, 2002), following is asection-by-section summary of the contents of the Resolution, including highlights of the changes made since the work session. Section 1 -Chapter 26.590 Section 26.590.010 identifies the City's primary reasons for adopting these regulations. It sets the stage for the standards that are contained in this Chapter. Section 26.590.020 is a newly-named section which introduces the two types of timesharing permitted in Aspen, these being timeshare lodge development and exempt timesharing. It also states the applicability of these regulations to all timeshare development in Aspen. Section 26.590.030 is a new section that defines the eligibility requirements and minimum standards for exempt timesharing. It limits this exemption to single-family and duplex units, and multi-family units in projects that contain no more than 6 units, provided the units are located in the L/I'R zone district or the Aspen Highlands PUD. Each unit may be split into no more than 6 estates using this exemption; the creation of more than 6 estates per unit may only be accomplished as a timeshare lodge. The exemption would be granted using the subdivision exemption process, and standards to manage this activity have been established. Section 26.590.040 makes all timeshare development subject to PUD review and describes how the four step PUD process can be consolidated down to a two step process. It also clarifies that timeshare development requires subdivision review, and that timeshare development is considered to be a tourist accommodation or a lodge for GMQS review, not a residential development. Finally, it expands the authority for the City Council to grant variations, which was established as part of the recent review of the Grand Aspen project. Section 26.590.050 establishes the required application contents for timeshare development. It allows applicants to apply for this use without first having to prepare all of the disclosure documents, timeshare instruments, and covenants that will ultimately be needed. Instead, the applicant is required to outline the key principals that will be included in these documents. Other key documents, such as the marketing plan, budget, and upgrading plan, must also be submitted. A requirement has been added for the developer to provide a copy of his or her Colorado Real Estate Commission registration. 2 ~-~• , , w. , ` ,, Section 26.590.060 identifies the physical and operational characteristics of what would constitute a timeshare lodge in Aspen. This section has been written as a menu of mandatory and optional features, so each development can adopt practices that are consistent with its intended style of operation. It tries to avoid dictating a uniform set of rules that govern how each timeshare development must look or operate. The most significant change to this section from the prior draft is that the requirement for a timeshare lodge to include a bar, restaurant, or retail space has been deleted, except in the CC zone. In addition, a new mandatory operational standard has been proposed (B.4), limiting occupancy of a timeshare estate by an owner to no more than 30 consecutive days, providing further assurance that these units operate like lodge units, not residential units. Section 26.590.070 contains the review standards for timeshare lodge development. These standards represent a combination of several of the standards in today's Code, along with several new or updated standards based on the research we conducted. Several standards now found in the City Code (such as E. and F.) have been revised from prescriptive to performance standards, giving applicants flexibility in their development plans. Other currently adopted standards (such as D. and G.) have been written to require compliance with State statutes, to eliminate the differences between local than State standards. Section 26.590.080 requires timeshare developments to comply with the City's business license procedures. It is unclear whether projects approved under the City's current standards have been complying with the adopted timeshare licensing requirements. This will replace that approach with an approach that should be easier to enforce. Section 26.590.090 establishes the requirements for the types of documents that must be recorded by a timeshare developer. These requirements are based on the City's adopted timeshare regulations, but have been edited to remove any requirements that no longer appear to be applicable. Related Code Sections Proposed to be Amended Section 2: This section of the Resolution amends two Code definitions, as follows: • It creates a new definition for "timeshare lodge", tied to Section 26.590.060, which establishes the mandatory and optional characteristics of this use. This definition allows kitchens to be included in any unit that has been approved for timesharing. An addition made to this definition since your last review is the requirement that each timeshare lodge unit be split into a minimum of seven (7) estates. • A "house-keeping" change to the definition of "lodge" is also proposed. It would delete the LP lodge standards from the definition of lodge and move them to the L/TR zone district section (see explanation of Section 3, below). 3 ,._ . 4• ? 4,.! Section 3: This section amends the LP zone district permitted use list, to include the language that was previously found in the definition of a lodge (see Section 2, above). The proposed language also eliminates the requirement that an LP timeshare lodge unit must be occupied at least 6 months per year by the public. Section 4: This section amends the L/I'R zone district dimensional requirements. It states that lodge units, including timeshare lodge units, are not subject to the minimum lot area per dwelling unit requirements of the L/TR zone district; residential units are the only units subject to the density requirements of this zone district. Section 5 & 6: These sections would make timeshare lodge a permitted, not a conditional use in the L/TR, CL, LP, and CC zone districts. Section 7: This section has been added subsequent to the P&Z work session. It would prohibit the development of new projects containing multi-family dwelling units in the LfTR zone district, but will allow this use to continue where it already exists or where there is currently a development approval for such units to be built. The purpose of this change is to focus the use of the City's primary lodge zone district on tourism and visitation, and to avoid the proliferation of residences that tend to remain vacant for large parts of the year. By keeping existing multi-family dwellings as permitted uses, all existing projects would be able to be remodeled, expanded, and otherwise re-developed, the same as today, but no new multi-family projects would be allowed in this zone. Therefore, the only way to develop new multi-family style dwelling units in this zone would be if the project complied with the requirements of a timeshare lodge, ensuring such projects will be available for short-term occupancy and high turnover. Sections 8 & 9: These are new sections added since you reviewed the last draft. Section 8 creates a new subdivision exemption, for exempt timesharing, while Section 9 states that the exemption can be granted administratively. Section 10: This is also a new section, authorizing an identification/contact sign to be placed on any dwelling unit approved for exempt timesharing. Section 11: This section of the Code authorizes a GMQS exemption to convert lodge unit reconstruction credits to residential credits. Since the Code now clarifies that timeshare lodge development requires lodge, not residential allotments, it is no longer necessary. Furthermore, given the desire of the City to promote short term accommodations in its limited areas of lodge zoning, this type of exemption is no longer seen as appropriate. Therefore, this section of the Resolution would repeal this provision. We recommend that you review all of the proposed changes and following the conclusion of the public hearing, that you adopt the proposed Resolution. 4 ,.~ s RESOLUTION OF THE ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THAT THE ASPEN CITY COUNCIL ADOPT AMENDMENTS TO THE ASPEN LAND USE CODE TO REPEAL AND RE-ENACT CHAPTER 26.590, TIMESHARE, AND RELATED SECTIONS OF THE CODE Resolution # 02 - WHEREAS, the City Council and the Planning and Zoning Commission of the City of Aspen directed the Community Development Department to propose amendments to the Land Use Code to better address the emerging types of timeshare and fractional fee projects that are being planned in Aspen; and WHEREAS, in response to this direction, the Community Development Director prepared the research paper Fractional Fee Ownership -Summary of Research and Identification of Regulatory Options, dated January, 2002; and WHEREAS, a work session was held with the Aspen City Council and the Planning and Zoning Commission on February 12, 2002, at which time a discussion of the research paper was held and direction was given to the Community Development Director to prepare the appropriate amendments to the Aspen Land Use Code; and WHEREAS, a work session was held with the Planning and Zoning Commission on March 26, 2002, to review a first draft of these proposed amendments to the Land Use Code, at which time it was determined that a public hearing should be scheduled to consider the proposals; and WHEREAS, pursuant to Section 26.310 of the Aspen Iand Use Code, applications to amend the text of Title 26 of the Municipal Code shall be reviewed and recommended for approval, approval with conditions, or denial by the Community Development Director and then by the Planning and Zoning Commission at a public hearing. Final action shall be by City Council after reviewing and considering these recommendations; and WHEREAS, the Community Development Director recommended approval of the amendments to the Land Use Code as are described herein; and WHEREAS, the Planning and Zoning Commission conducted a duly noticed public hearing on May 21, 2002, to consider these amendments to the Aspen Land Use Code, took public testimony, and considered the recommendations of the Planning Director; and WHEREAS, at the conclusion of the public hearing, the Planning and Zoning Commission approved these amendments by a vote of _ in favor to _ against. NOW, THEREFORE, BE IT RESOLVED by the Commission, that it recommends that the Aspen City Council adopt the following amendments to Chapter 26 of the Municipal Code, the Aspen Land Use Code: ~, Section 1• ~~ That Chapter 26.590 be repealed and re-enacted to read as follows: Chapter 26.590 TIMESHARE DEVELOPMENT 26.590.010 Purpose and Intent. The purpose of this chapter is to establish the procedures and standards by which timeshaee development may be permitted within the City of Aspen. It is the City's intent to establish timeshare regulations that provide for the protection of the character of Aspen as a resort community, and that help to promote increased tourism and vitality within the City. Specifically, the City intends that new timeshare projects in Aspen will implement the goals of the Aspen Area Community Plan, and will help to achieve the following public purposes: A. Increased Ytality. Timeshare developments can provide the opportunity for increased tourism to Aspen, can add to the level of community vitality, and can help to create a more sustainable local economy. This can be accomplished by expanding the number and variety of "hot beds" available to visitors, raising occupancy levels in the accommodations sector, and attracting "new trials" to Aspen, from persons who have not previously visited this community. B. Preserve and Enhance Lodging Inventory. Aspen's tourist accommodations inventory has for some time included a significant percentage of traditional lodges. The community would like to preserve and enhance this lodging inventory, by encouraging timeshare units to be contained in projects that look and operate in a manner similar to Aspen's traditional lodges. These regulations have been designed to accomplish this purpose by establishing standards for the physical and operational features of timeshare lodges, to ensure that new and re-developed timeshare lodges maintain Aspen's lodging traditions. C. Upgrade Quality of Accommodations. It is important to Aspen's tourist economy that its accommodations are kept up-to-date. Timeshare development offers the opportunity to infuse capital into the short term accommodations inventory, so facilities can be modernized. It is equally important to ensure that once facilities are upgraded, the facility is managed to provide a quality visitor experience over time. These regulations are intended to ensure that timeshare lodges are properly maintained over the life of the development. D. Maintain Community Character. Aspen has a valued reputation as a quality resort community. The City intends to regulate timeshare marketing and sales practices, to ensure that the way timeshare estates are marketed and sold is consistent with the 2 -~ ~. J \.. / character of this community, and to minimize the potential for practices that would create an inappropriate image of Aspen. 26.590.020 Overview of Timeshare Development. A. Applicability. The requirements of this Chapter shall apply to all timeshare development within the City of Aspen. These requirements shall be in addition to all other applicable requirements set forth in this Title 26, and those set forth in the Colorado statutes. B. Types of Timeshare Development. There are two types of timeshare development that may be permitted within the City of Aspen, as follows: 1. Timeshare lodge development is the basic form of timesharing permitted in Aspen. It applies to any application to convert lodge units or residential dwelling units to timesharing, except for those applications that are eligible for an exemption, as described below. Timeshare lodge development is allowed as a permitted use in the Lodge/Tourist Residential (L/TR), Commercial Lodge (CL), Lodge Preservation Overlay (LP), and Commercial Core (CC) zone districts. The standards and procedures for timeshare lodge development are described in Sections 26.590.040 through 26.590.070. 2. Exempt timesharing is a more limited type of timesharing allowed in Aspen. The only units eligible for this exemption are single-family dwelling units, condominiumized duplex dwelling units, and existing condominiumized multi- family dwelling units within a project that contains no more than six (6) such units, provided such units are located in the Lodge/Tourist Residential (L/TR) zone district or the Aspen Highlands Village PUD. The standards and procedures for exempt timesharing are described in Section 26.590.030. 26.590.030 Exempt Timesharing. A. Eligibility For Exemption. 1. The following types of dwelling units are eligible to apply for this exemption: a. Single-family dwelling units; b. condominiumized duplex dwelling units; and c. Existing condominiumized multi-family dwelling units (as such units are described in Section 26.710.190 B.4), provided the project in which the units are located contains no more than six (6) such units. 3 r, ... 2. To be eligible to apply for the exemption, the single-family, duplex, or multi- family dwelling units must be located in the Lodge/Tourist Residential (L!'TR) zone district or the Aspen Highlands Village PUD. B. Minimum Requirements To Obtain Exemption. 1. No more than six (6) estates may be created in any dwelling unit via this exemption. An applicant wishing to create more than six (6) estates in any unit may do so only via an application for a timeshare lodge development. 2. The ownership interests that may be created pursuant to this exemption shall be limited to "time-span estates" as defined in C.R.S. 38-33-110, where the annually recurring exclusive right to possession and occupancy is determined by a schedule or formula. 3. Applications for exempt timesharing shall be processed as a subdivision exemption, pursuant to Section 26.480.030 A.S. of this Code. 4. The minimum application contents for the subdivision exemption application shall be as follows: a. The applicable portions of the information described in Section 26.590.050 A., B., F and G.; and b. The general application contents required in Section 26.304.030, Application and Fees. C. Review Standards for Exemption. An applicant for exempt timesharing shall demonstrate compliance with each of the following standards. These standards are in addition to those standards applicable to the review of the subdivision exemption. 1. The proposal shall not conflict with any applicable private covenants or any provisions of the Colorado statutes. If the proposal is for a condominium, it shall comply with the applicable provisions of Section 26.590.070 H. 2. All units to be converted to timesharing shall be in compliance with the City's adopted fire, health, and building codes. If any unit does not comply with said codes, then no sale of an interest in that unit shall be closed until a certificate of occupancy has been issued that brings the unit into compliance. 3. All dwelling units to be converted to timesharing shall be in compliance with the requirements of the zone district in which they are located and all other applicable standards of this Land Use Code, or with the requirements of any PUD or other site specific development approval granted to the property. 4 4. The conversion of any multi-family dwelling unit that meets the definition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. 5. The marketing, sales, management, and operation of the timeshare estates shall comply with the provisions of Sections 26.590.070 D. and 26.590.070 I. of this Code. 6. A wall sign shall be mounted on each dwelling unit stating that the unit has been approved by the City for timesharing and providing the name and phone number of a management entity or local contact person who can be called in the event of an emergency or to respond to neighborhood concerns. The sign shall comply with the requirements of Section 26.510.030 B.22. of this Code. 26.590.040 Procedure for Review of Timeshare Lodge Development Application. All timesharing that is not eligible for an exemption shall be processed as follows: A. PUD Review Required. Timeshare lodge development shall be processed as a Planned Unit Development (PUD), pursuant to Chapter 26.445 of this Code. B. Consolidated PUD Review. The Community Development Director may determine that because a timeshare lodge development is a conversion of an existing building, or because of the limited extent of the issues involved in the proposal, the four step PUD review process should be consolidated into a two step review, pursuant to Section 26.445.030 B.2, Consolidated Conceptual and Final Review. Development of a timeshare lodge in the Lodge Preservation Overlay (LP) Zone District shall be processed as a two step review, pursuant to Section 26.445.030 B.3. The Community Development Director is also authorized to waive those PUD submission requirements from Section 26.445.060 and review standards from Section 26.445.050 that the Director finds are not applicable to a proposed timeshare development. C. Subdivision Review. Timeshare lodge development shall also require subdivision approval. Review of the subdivision application may be combined with final PUD review, as authorized by Section 26.304.060 B., Combined Reviews, and by Section 26.445.030 B.4, Concurrent Associated Reviews. D. Growth Management Quota System Review. Whenever a proposed timeshare lodge development or exempt timesharing is subject to review under the City's Growth Management Quota System (Chapter 26.470), the development shall be considered to be a "Tourist Accommodation" or a "Lodge" under that System. 5 .~,,. E. Authority to Grant Variations. Variations from the requirements applied to timeshare lodge development may be authorized by the City Council. An applicant requesting a variation shall demonstrate that the provision requested to be varied is not applicable to the proposed development or cannot be met, and shall demonstrate that the proposed variation is reasonable, would not be contrary to the public interest, and better implements the purpose and intent of these timeshare regulations than the codified requirement. 26.590.050 Contents of Application. In addition to the general application information required in Section 26.304.030, Application and Fees, and those application contents for PUD and subdivision, the application for timeshare lodge development shall include the following information: A. Timeshare Use Plan. A detailed description of the basic elements of the proposed timeshare use plan. The use plan shall describe the number of estates being created in each unit, the total number of estates to be created, the expected price for each estate, and whether a purchaser is buying a specific unit for a specific time, a specific unit for a floating time, or whether there is no specific unit but just a specific time. It shall also describe whether owners will be able to participate in an exchange program, and if so, in which program(s) they will be eligible to participate. The use plan shall also provide a specific description of how the development will comply with the requirements of Section 26.590.060, Characteristics of a Timeshare Lodge. B. Summary of Disclosure Statement and Timeshare Instrumettts. A detailed summary of each of the key points that will be included in the disclosure statement and the timeshare development instruments (see Section 26.590.090) if the project receives approval from the City. C. Marketing Plan. The marketing plan for the timeshare development, including information on proposed sales techniques (including a description of gifts, premiums, or promotions to be offered), sales packaging, and whether a sales office will be established off-site. D. Budget. A thorough account of the proposed homeowners/condominium association budget, giving a true indication of proposed costs and expenditures. E. Upgrading Plan. For any existing project that is proposed to be converted to a timeshare lodge development, the applicant shall submit a plan of how the project will be physically upgraded and modernized. F. Tax Collection. A statement indicating the manner in which real estate transfer taxes and sales taxes will be collected. .rte G. Developer's Registration. A copy of the developer's registration with the Colorado Real Estate Commission. If the developer has not so registered at the time of submission of the application, then this information shall be submitted at the time the timeshare documents are submitted for recordation, pursuant to Section 26.590.090 of this Code. 26.590.060 Characteristics of a Timeshare Lodge Development It is the intent of the City of Aspen that all timeshare lodge developments incorporate some of the physical and operational features that are typically found in lodges in Aspen. The City recognizes that each timeshare development is unique, and that each development should not contain al] of these features. In fact, considering the proposed location of the development and the intended method of operating the facility, certain of these features may not be appropriate. The City also recognizes that when owners occupy their units, the development will operate more like a private residential complex than like a lodge. But the City seeks to balance that form of use. with opportunities for other guests to use the facility. Therefore, the City has identified a menu of timeshare lodging features, including both mandatory and optional elements. All timeshare lodge developments shall incorporate the mandatory physical and operational features listed herein. However, an applicant may instead propose to substitute optional operational features for one or more of the mandatory features listed herein, or may propose its own set of features which ensure that the development operates in a manner similar to a lodge when the owners are not using their timeshare estates, as described further below. A. Mandatory Physical Elements. 1. All timeshare lodge developments shall be managed on-site, with a front desk that is located within a lobby that is sized to meet the needs of the project. If the timeshare lodge is part of a multi-site development, there may be a single front desk for these sites. The front desk shall be open at least during regular business hours, and shall be managed to provide full-time registration and reservation services, including provision for late check-in and for other off-hours guest needs. The front desk shall accommodate walk-in rentals. 2. The planned timeshare lodge development shall contain a sufficient level of recreational facilities and other amenities to serve the occupants, including appropriate facilities for both the winter and the summer seasons. 3. A timeshare lodge in the Commercial Core (CC) zone district shall not have any lodge roams located on the ground floor. Instead, a timeshare lodge development in the CC zone shall contain at least one of the following elements: a bar, restaurant, or retail facilities. The element(s) provided shall be located along the street front, shall be accessible from the street, and shall be designed to serve the public, not just the occupants of the timeshare lodge. 7 .,~, ..~ B. Mandatory Operational Practices. The City wants to ensure that the units in a timeshare lodge development are available for rental to the public when they are not being occupied by the owner or the owner's guests. The City has identified certain operational practices that will accomplish this intent, which are listed in this section. An applicant who agrees to include all of the practices listed below in the operation of the timeshare development shall be deemed to have complied with this intent. The City recognizes, however, that there may be other ways to comply with this intent, and will consider these and other operational practices. Applicants may propose to substitute one or more of the optional practices listed in Section C., below, for one or more of the mandatory practices listed in this Section B. Applicants may also propose other operational practices not listed in Section C. as a means of demonstrating compliance with this standard. Acceptance of the proposed optional practices as a substitute for one or more of the mandatory practices shall be at the sole discretion of the City Council. 1. Timeshare estates shall be made available for short-term rental in a managed program when the estate is not in use by the owner of the unit or the owner's guests. The purchasing disclosure documents shall state that the purchaser must sign an agreement with the management company to rent the estate when it is not being occupied by the purchaser or guests. 2. The covenants of the homeowners association shall permit walk-in rental of units. The association shall not limit rental of units to such arrangements as only weekly rentals or Saturday-to-Saturday rentals; instead the association shall permit shorter stays, split-week rentals, and similar flexible arrangements. 3. Owners of timeshare estates shall be required to reserve their unit/time sufficiently far in advance to enable the public to obtain access to those units that are not so reserved. 4. The owner of a timeshare estate shall not be permitted to occupy that estate for any period in excess of thirty (30) consecutive calendar days. 5. The units that remain in the developer's inventory shall be made available for rental to the public while the estates are being sold, except for models and other units that are needed for marketing or promotional purposes. 6. Units that are available for rental shall be listed at competitive rates in a central reservation system. Listing of the unit with a recognized central reservation system in Aspen, or through the central reservation system of the company that will manage the timeshare development, is preferred. 8 .-- ti..., C. Optional Operational Features. 1. Timeshare lodge developments that subdivide each unit into a larger number of estates (more than 10 estates per unit) are preferred to those which subdivide each unit into a smaller number of estates (less than 10 estates per unit). 2. Applicants may formulate their timeshare use plan such that the purchaser would not purchase an interest in a particular unit and would not expect to occupy the same unit each visit; instead the purchaser would purchase the right to occupy a certain type of unit for a certain period of time. Applicants may also include provisions in the homeowners association documents prohibiting owners from personalizing the unit they have purchased. 3. Applicants may design their development as a mixed project, which includes not only timeshare units, but also some units that would continue to be owned and operated by the applicant and his successors or assigns as traditional lodge units. Another type of use plan that is encouraged would be for the applicant to agree not to sell all of the shares in every unit, but to instead keep some time reserved for rental to the public at market rates during both the high seasons and the off-seasons. 4. Applicants may decide to sell on and off-season estates as a package. 5. Applicants may include in their use plan provisions that allow for a wide range of exchange opportunities for owners, which will promote new Aspen trials. 26.590.070 Review Standards for Timeshare Lodge Development. An applicant for timeshare lodge development shall demonstrate compliance with each of the following standards, as applicable to the proposed development. These standards are in addition to those standards applicable to the review of the PUD and Subdivision applications. A. Fiscal Impact Analysis and Mitigation. L Any applicant proposing to convert an existing development to a timeshare lodge development shall prepare a fiscal impact analysis of the proposed development, which demonstrates whether there would be any negative sales, property, or other tax consequences to the City from the approval of the proposed conversion. The applicant shall, as a condition of approval of the timeshare lodge development, be required to mitigate any negative tax consequences the project will cause. 9 ~~°~~ ~.,.. 2. The City of Aspen Finance Department has created a model which evaluates the tax consequences of a proposed timeshare conversion. The model evaluates the direct sales tax implications from having fewer days of occupancy by guests that pay sales taxes in a timeshare lodge as compared to a traditional lodge. The model also considers the indirect sales tax benefits that may accrue from increased occupancy in timeshare lodge units as compared to other types of accommodations within the City. Finally, the model considers any property tax implications due to the conversion of property that is assessed as a commercial use to property that is assessed as a residential use. Applicants shall meet with the City Finance Department before submitting their timeshare development application to review the model and to understand the factors the City will use in evaluating the tax impacts of their proposal. B. Affordable Housing Requirements. 1. Whenever a timeshare lodge development is required to provide affordable housing, mitigation for the development shall be calculated by applying the standards of the City's housing designee for lodge uses. The affordable housing requirement shall be calculated based on the maximum number of proposed lock out rooms in the development, and shall also take into account any retail, restaurant, conference, or other functions proposed in the lodge. 2. The conversion of any multi-family dwelling unit that meets the definition of residential multi-family housing to timesharing shall comply with the provisions of Chapter 26.530, Resident Multi-Family Replacement Program, even when there is no demolition of the existing multi-family dwelling unit. C Parking Requirements. 1. The parking requirement for timeshare lodge development shall be calculated by applying the parking standard for the underlying zone district for lodge uses. The parking requirement shall be calculated based on the maximum number of proposed lock out rooms in the development. 2. The timeshare lodge development shall also provide an appropriate level of guest transportation services, such as vans or other shuttle vehicles, to offer an alternative to having owners and guests using their own vehicles in Aspen. 3. The owner of a timeshare estate shall be prohibited from storing a vehicle in a parking space on-site when the owner is not using that estate. D. Appropriateness of Marketing and Sales Practices. The marketing and sale of timeshare estates shall be governed by the real estate laws set forth in Title 12, 10 Article 61, C.R.S., as may be amended from time to time. The applicant and licensed marketing entity shall present to the City a plan for marketing the timeshare development. 1. The following marketing and sales practices for a timeshare development shall not be permitted: a. The solicitation of prospective purchasers of timeshare units on any street, mall, or other public property or facility; b. Sales campaigns using phone solicitations; and c. Any unethical sales and marketing practices which would tend to mislead potential purchasers. 2. Giving of gifts to encourage potential purchasers to attend a sales presentation or to visit a timeshare development is permitted, provided the gift reflects the local Aspen economy. For example, gifts for travel to or accommodations in Aspen, restaurants in Aspen, and local attractions (ski passes, concert tickets, rafting trips, etc.) are permitted. Gifts that have no relationship to the local Aspen economy are not permitted. The following gifts are also not permitted: a. Any gift for which an accurate description is not given; b. Any gift package for which notice is not given to the prospective purchaser that the purchaser will be required to attend a sales presentation as a condition of receiving the gifts; and c. Any gift package for which the printed announcement of the requirement to attend a sales presentation is in smaller type face than the information on the gift being offered. E. Upgrading of Existing Projects. Any existing project that is proposed to be converted to a timeshare lodge development shall be physically upgraded and modernized. The extent of the upgrading that is to be accomplished shall be determined as part of the PUD review, considering the condition of the existing facilities, with the intent being to make the development compatible in character with surrounding properties and to extend the useful life of the building. 1. To the extent that it would be practical and reasonable, existing structures shall be brought into compliance with the City's adopted fire, health, and building codes. 11 ,-~ , , ~a.yA r,..J 2. No sale of any interest in a timeshare lodge development shall be closed until a certificate of occupancy has been issued for the upgrading. F. Adequacy of Maintenance and Management Plan. The applicant shall provide documentation and guarantees that the timeshare lodge development will be appropriately managed and maintained in an manner that will be both stable and continuous. This shall include an identification of when and how maintenance will be provided, and shall also address the following requirements: 1. A fair procedure shall be established for the estate owners to review and approve any fee increases which may be made throughout the life of the timeshare development, to provide assurance and protection to timeshare owners that management/assessment fees will be applied and used appropriately. 2. The applicant shall also provide documentation establishing the adequacy of a reserve fund to ensure that the proposed timeshare development will be properly maintained throughout its lifetime. G. Compliance with State Statutes. The applicant shall demonstrate that the proposed timeshare lodge development will comply with al] applicable requirements of Title 12, Article 61, C.R.S.; Title 38, Article 33, C.R.S.; and Title 38, Article 33.3, C.R.S.; including the requirements concerning the five (5) day period for rescission of a sales contract, and the procedures for holding deposits or down payments in escrow. H. Approval By Co~adomiraium Owners. If the development that is proposed to be timeshared is a condominium, the applicant shall submit written proof that the condominium declaration allows timesharing, that one hundred (100) percent of the owners of the condominium units have approved the timeshare development, that all mortgagees of the condominium have approved the proposed timeshare development, and that all condominium units in the timeshare development will be included in the same sales and marketing program. I. Prohibited Practices and Uses. Without in any way limiting any requirement contained in this Chapter, it is unlawful for any person to knowingly engage in any of the following practices: 1. The creation, operation or sale of a right-to-use interest or any other timeshare concept which is not specifically allowed and approved pursuant to the requirements of this section. Right-to-use timeshare concepts (e.g. lease- holds and vacation clubs) are considered inappropriate in Aspen and are not permitted. 12 2. Misrepresentation of the facts contained in any application for timeshare approval, timeshare development instruments, or disclosure statement. 3. .Failure to comply with any representations contained in any application for timesharing or misrepresenting the substance of any such application to another who may be a prospective purchaser of a timeshare interest. 4. Manage, operate, use, offer for sale or sell a timeshare estate or interest therein in violation of any requirement of this Chapter or any approval granted pursuant hereto, or cause or aid and abet another to violate any requirement of this Chapter, or an approval granted pursuant to this Chapter. 26.590.080 Business License and Sales Tax Payments. A. Business License. It shall be unlawful for any timeshare development to operate in the City of Aspen without first obtaining a business license in accordance with the standard procedures of the City of Aspen. B. Sales Tax Payments. Occupancy of any timeshare unit by anyone who pays a fee for the use of the unit (other than the owner thereof) shall be subject to the City's sales tax the same as if such occupancy were of a hotel or lodge unit. Any timeshare development, as a condition of its approval, shall be required to obtain an Aspen Sales Tax/L.odging Tax License, which shall establish how this tax shall be collected and paid to the City. The manager of the association shall be responsible for the timely collection of the City sales tax for the City of Aspen. 26.590.090 Timeshare Documents. At the same time the applicant submits the PUD Development Plan and PUD Agreement to the City for recordation, pursuant to Section 26.445.070, or submits the necessary documents. to record the subdivision exemption, the applicant shall also submit the following timeshare documents in a form suitable for recording. The Community Development Director may require the applicant to submit a draft version of these timeshare documents at the time of submission of the Final PUD application. A. Disclosure Statement. The applicant shall submit a disclosure statement that contains the following information: 1. The name and address of the developer of the timeshare development as well as a summary of the developer's business experience, including all background and experience in the development of timeshare development, and the present financial condition of the developer. 13 ,~. ~~. 4 / ~~ 2. The name and address of the manager/management company for the development, if any, and a description of the manager's/management company's responsibilities, powers, duties, authority and business experience. All information on the manager's background and experience specifically related to timeshare development shall be provided. 3. The names and addresses of the marketing entity and the listing broker and a statement of whether there are any lawsuits pending or investigations that have been undertaken against the marketing entity or listing broker, and if so, a description of the status or disposition of said lawsuits or investigations. A summary of the marketing entity's business .experience including all background and experience related to timeshare development. 4. A description of the timeshare units, including the developer's schedule for completion of al] buildings, units, and amenities, with dates of availability. 5. If the timeshare plan consists of a condominium or a similar form of ownership, a description of the development and any pertinent provisions of the condominium instruments. 6. Any restraints on the transfer of the purchaser's interest in the timeshare units or plan. 7. The timeshare use plan, which shall include a description of the rights and responsibilities under the plan. 8. Notice of any liens, title defects or encumbrances on or affecting the title to the units or plan and, if there are encumbrances or liens, a statement as to whether, when and how they will be removed. 9. Notice of any pending or anticipated legal actions that are material to the timeshare units or plan of which the applicant has, or should have, knowledge. 10. The total financial obligation of the purchaser, which shall include the initial price and any additional charges to which the purchaser may be subject in purchasing the unit. 11. An estimate of the dues, maintenance fees, real property taxes, sales taxes, real estate transfer tax and similar periodic expenses, and the method or formula by which they are derived and apportioned, which shall include whether maintenance fees are determined by unit, time of year, or prorated share of the overall maintenance costs, or any other means utilized to compute maintenance fees. 14 ,~. ~", °!.,/ 4J 12. A statement demonstrating the manner in which management/assessment fees will be held, utilized and accounted for. 13. A description of any financing offered by the applicant. 14. The terms and significant limitations of any warranties provided, including statutory warranties and limitations on the enforcement thereof or on damages. 15. A statement that the proposed development will comply with all applicable requirements of Title 12, Article 61, C.R.S. Upon request from the City, the applicant shall provide a copy of the documents submitted to the State of Colorado for the registration and certification of the timeshare developer. 16. The extent to which a timeshare unit may become subject to a tax or other lien arising out of claims against other timeshare owners of the same timeshare unit. 17. The minimum percentage of units the developer will require be sold before the developer will proceed with the completion of the timeshare development. 18. A description of the maintenance to be supplied to the timeshare development, including how and when such maintenance will be provided. 19. Whether any or all the units in the proposed development will be available for participation in an exchange program. The applicant shall disclose which exchange program(s) the timeshare estate owners will be eligible to utilize. 20. A description of all insurance covering the property. 21. A description of the on-site amenities and recreational facilities which are available for use by the unit owners. All on-site amenities shall be owned by the homeowner's association and the developer shall not be allowed to charge any additional fees for use of the amenities. If there are any off-site facilities that are related to the property, these shall also be described, including a summary of any fees that timeshare owners would have to pay to use those off-site facilities. 22. A statement that any timeshare interest shall be expressly subject to all requirements and representations set forth in the disclosure statement, which shall be placed of record with the Pitkin County Clerk and Recorder. 23. For any timeshare development that is a conversion of an existing project, a statement shall be provided by the developer, based on a report prepared by 15 r^~ "~ ~.~ an independent architect or engineer, licensed by the State of Colorado, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the timeshare units. The statement shall also provide a list of any outstanding notices of uncured violations of building code or other municipal regulations, together with the estimated cost of curing those violations. B. Timeshare Development Instruments. The applicant shall submit the following timeshare development instruments: 1. Instruments for the interval estate or time span estate including: a. The legal description, street address or other description sufficient to identify the property. b. Identification of timeshare time periods by letter, name, number or combination thereof. c. Identification of the timeshare estate and the method whereby additional timeshare estates may be created. d. The formula, fraction or percentage of the common expenses and any voting rights assigned to each timeshare estate. e. Any restrictions on the use, occupancy, alteration or alienation of timeshare units. f. Any other matters that the applicant or the City Council deems reasonably necessary. 2. All timeshare development instruments shall provide for the following: a. That a homeowners association shall be established. Title to the ` common areas of the development and responsibility for maintenance of the development shall reside within the association. The association shall designate a managing agent. The management contract with the managing agent shall allow for either party to terminate, for cause, upon sixty (60) days notice. In the event the manager is terminated, a new managing agent shall be designated as quickly as possible by the association. Any management agreement shall specify the managing agent's duties and responsibilities to maintain the development. b. A stipulation by the owner of the timeshare interest irrevocably designating the homeowners association and/or the managing agent as 16 ,., ~.: F .~: an agent for the service of legal notices for any legal action, proceeding or hearing pertaining to the timeshare interest or for the service of process (in a manner sufficient to satisfy the requirements of personal service in the state, pursuant to Rule 4 C.R.C.P., as amended). c. Each timeshare interest with a multiple ownership shall be required to designate one managing agent as the spokesperson and voter for all of the owners involved. d. That the association shall have the ability to compel a timeshare owner to pay maintenance fees and if any owner's fees are not paid, his interest shall be subject to a lien and foreclosure or other divestment. In the event an owner or his guests violate the rules and regulations of the association, the association shall have the right to enjoin the violation and the prevailing party in such suit shall be awarded his court costs and reasonable attorney's fees. e. Provisions addressing reconstruction or repair of al] or a portion of the timeshare development following its willful or non-willful destruction. Provisions should also be included addressing termination of the association, including the percentage of owners that must agree for the termination to become effective, what happens to the common elements in the event of a termination, and how the proceeds shall be distributed in the event the property is taken due to condemnation or eminent domain. 3. Updating and filing. a. The developer and his successors and assigns (other than individual unit purchasers) shall have a continuing duty to update the disclosure statement and file with the City all amendments to the timeshare development's instruments. Such amendments shall comply with the requirements of this section. No amendment which shall significantly alter the disclosure statement or the timeshare development instruments shall be effective unless approved and accepted by the City and filed in the office of the Pitkin County Clerk and Recorder. All amendments shall be initially submitted for review to the Community Development Director who shall have authority to either approve a proposed amendment as in compliance with the requirements of this section or refer the proposed amendment for appropriate subdivision or PUD approval. b. The foregoing updating and filing requirements do not apply to a single unit owner. However, the condominium association and/or the 17 homeowners association, or both if there be multiple associations, shall have the continuing responsibility to update the filing, the disclosure statement, and any amendments to the condominium documents and/or timeshare development instruments with the City and, subject to applicable City approvals, to file the same in the Office of the Pitkin County Clerk and Recorder as soon as practicable after City approval has been granted. Once the condominium association has been formed, the City shall not accept any amendments for review without prior approval thereby. 4. Before transfer of a timeshare unit and no later than the date of execution of any contract of sale, the applicant or any other seller of a timeshare unit shall provide the intended transferee with a copy of the disclosure statement and any amendments thereto, except this requirement shall not apply to the owner of a single timeshare estate in a development who is attempting to sell the estate. 5. No conveyance of a timeshare interest shall be valid unless the instrument of conveyance shall indicate that title is being transferred subject to the condominium declaration which shall include the disclosure statement as an exhibit thereto. Section 2: That the following definitions be revised or added to Section 26.104.100: Timeshare Lodge. A development or a unit that has been approved for timesharing, pursuant to Chapter 26.590, and has the characteristics of a timeshare lodge, as specified in Section 26.590.060. Each unit in a timeshare lodge shall be subdivided into no less than seven (7) time span or interval estates. A timeshare lodge unit may contain a kitchen and still be considered to be a lodge unit (not a residential dwelling unit) for purposes of this Land Use Code (although the Uniform Building Code will consider a unit with a kitchen to be a dwelling unit, and it will be subject to all applicable requirements thereof). Lodge. Same as hotel. Section 3• That Section 26.710.320 B.1., permitted uses in the LP Zone District, be amended to read as follows: 1. Lodge, provided: 18 .~ . ~~ W~ a. All lodge units within the LP Overlay Zone District may have kitchens within individual lodge rooms. b. All lodge units must be available for overnight lodging by the general public on a short-term basis for at least six (6) months of each calendaz year. This requirement shall not apply to a timeshare lodge. Section 4• That Section 26.710.190 D.2.d., minimum lot area per dwelling unit requirement for lodge units in the L/I'R Zone District, be amended to read as follows: d. Lodge units (including timeshare lodge units). No requirement. Section 5• That Sections 26.710.140 C, 26.710.190 C., 26.710.200 C. and 26.710.320 C. be amended to delete "timesharing" as a conditional use. Section 6: That Sections 26.710.140 B., 26.710.190 B., 26.710.200 B., and 26.710.320 B. be amended to add "timeshare lodge" as a permitted use. Section 7• That Section 26.710.190 B.4, permitted uses in the L/TR zone district, be amended to read as follows: 4. Multi-family dwellings, provided that such dwellings shall only be permitted on the following types of properties: a. properties on which multi-family dwellings were in existence as of , 2002 (the effective date of this Code Amendment); or b. properties for which a development order for the development of multi-family dwellings has been issued by the City, pursuant to Section 26.304.070 of this Code as of 2002 (the effective date of this Code Amendment), provided a building permit for the multi-family dwellings is issued before the vested rights for the development expire. The intent of this section is to permit existing multi-family dwellings in the L/TR zone district to continue, and to permit these dwellings to be remodeled and expanded, including the addition of new units to any property on which there are existing or 19 ,-. approved multi-family dwellings, but not to allow this use to be initiated on any property where the use does not exist or has not been approved for development as of , 2002 (the effective date of this Code Amendment). Section 8• That Section 26.480.030 A., General Exemptions, be amended to add a new sub-section 5., to read as follows: 5. Exempt Timesharing. The creation of time-span estates that comply with the requirements for exempt timesharing, pursuant to Section 26.590.030 of the Code. This subdivision exemption shall not be used to create any new lots or dwelling units. Section 9• That sub-section A. of Section 26.480.040, Procedures for Review, be amended to read as follows: A. Lot Line Adjustment and Exempt Timesharing. After an application for a lot line adjustment or exempt timesharing has been determined to be complete by the Community Development Director, the Director shall approve, approve with conditions, or deny the application. Section 10: That a new sub-section 22. be added to Section 26.510.030 B., Exempt Signs, to read as follows: 22. Timeshare identification signs. A dwelling unit that is approved for exempt timesharing, pursuant to Section 26.590.030, may have awall-mounted sign with an area not exceeding two (2) square feet, stating that the unit has been approved for timesharing and identifying the name and phone number of a contact person or management entity for the unit. Section 11: That Section 26.470.070 O., Conversion of Lodge Reconstruction Credits to Residential Dwelling Units, be repealed. APPROVED by the Commission at its regular meeting on , 2002. 20 ,--, ,, APPROVED AS TO FORM: City Attorney ATTEST: Jackie Lothian, Deputy City Clerk .. PLANNING AND ZONING COMMISSION: Jasmine Tygre, Chairperson 21 cuy atmwy. am MEMORANDUM TO: Mayor and Members of Council FRONT: John P. Worcester DATE: Apri14, 2001 RE: Analysis of Fractional Fees Report Enclosed please fmd a copy of the "Analysis of Fractional Fees" report we engaged Freilich, Myler, Letiner & Cazlisle to prepaze for the Ciry. As you may know, this firm, which is associated with Dave Myler of Aspen, is one of the best in the country when it comes to land use issues. I don't know that they have reported anything new for us, but do give us some avenues for discussion. If nothing else, I think it is fair that we have received the best analysis that can be prepared on this topic since it is such a new development in the land use area. Please advise if you would like to schedule a work session with the Community Development staff to review the contents of the report. cc: City Manager Community Development Director Confidential Attorney-Client CommuNcation -Page 1 ~~~. k~ ANALYSIS OF FRACTIONAL FEES Submitted by: Freilich, Myler, Leitner & Carlisle Mazch 2001 +,,~ .., ANALYSIS OF FRACTIONAL FEES TABLE OF CONTENTS PAGE I. INTRODUCTION ................................... ....................1 II. DEFINITIONS ................................ 1 ...... 1. Fee Interests or Estates .................... .................... .................... 1 2. Non-fee Interests ........................ .................... 2 3. Colorado Law ........................... ....................3 4. Conclusion ............................. ....................4 III. THE PLANNING ISSUE GENERALLY ................. .................... 4 IV. REGULATORY ISSUES .............................. A. General . ................... 5 ...................................... 1. General regulatory provisions ............... ...................5 ................... 5 2. Fractional fees ............................ .................. 6 B. Regulation of Use . .............................. C. Subdivision ............................ ...................7 11 ....... D. Regulation by Aspen ............................ .................. ...........:......13 V. PLANNING ANALYSIS ...............................................16 A. Introduction .....................................................16 B. Single-family Residential - Conversion from Single owner to Fractional Fee Ownership ................................................17 1. Land Use Impacts ..........................................19 2. Impacts on Occupancy .......................................24 3. Summary ............................. ..25 C. Commercial units: Conversion of hotel or other multi-unit structures to Fractional Fees .......................................... ................ 26 1. Land Use Impacts ..........................................27 2. Impacts on Occupancy ....................................... 29 3. Summary .................................................38 VI. IMPACTS ON CITY REVENUE .......................................... 40 A. The RealPropertv Tax .............................................41 B. The Sales Tax ....................................................42 C. The Real Estate Transfer Tax ........................................ 43 D. Summarv .......................................................44 VII. CONCLUSION ........................................................45 M47424.wpd / 90782.001 Asprn Fracdonel Fces-Mach 2001 ~, s ANALYSIS OF FRACTIONAL FEES I. INTRODUCTION - Time shaze ownership of real estate, by which many people have rights to a single condominium unit, have been common in resort communities for many years. The City of Aspen has recently been faced with an increased use of one form of multiple use ownership, known as "fractional fee" ownership. City staff is concerned about the potential impact of fractional fee ownership on the City. At the request of the City, we have analyzed the planning and legal implications of fractional fee ownership; whether other states and cities have dealt with the issue, and, if so, how; and whether Colorado law permits the regulation of fractional fee ownership by a local government. II. DEFINITIONS There aze several different forms of ownership by which more than one person or family "owns" or has an interest in a single unit. The names of these interests vary significantly from state to state, with the same interest often having different names, or one name applying to different forms of ownership. General]y, these forms of ownership can be broken down into either fee ownerships, including, possibly, fractional fees, and non-fee interests. 1. Fee Interests or Estates. a. Owners have recurring/rotating estates for years, with a right to occupy the property for a specified period, and a remainder interest as tenants in common. Common names for this form of ownership: A47424.wpd / 90782.OOI 1 Aspen Fractional Fees-March 200! ., ~, w • timeshaze _ Interval estate • Interval ownership b. Each owner has an individual fractional interest as a tenant in common. Covenants aze recorded to give each owner a specified period of possession. It is also possible that the ownership period is not by some permanently recorded document, but by some annual agreement among the owners. Common names for this form of ownership: • Time span estate • Fractional interest, including fractional fee • Tenancy-in-common estate c. Each owner has fee simple ownership for given period each yeaz; time is treated as a conveyable dimension, in addition to width, height and depth. For the time period of ownership, owner is sole owner, not tenant in common. Common names for this form of ownership: • fee simple timeshaze 2. Non-fee Interests "Traditional" time shaze model, where each owner has a lease or license granting each such owner a right to occupy property during a specified time period, with no fee interest. These may be classified, depending on the state, as either real property or personal property interests. Common names for this form of ownership: • Timeshaze • Right-to-use interest • Vacation license or lease #47424.wpd / 90782.OOI 2 Aspen Fractional Fees-March 2001 __ f.. d L6./ Colorado Law Timeshares in Colorado aze defined in §38-33-110 ofthe Condominium Ownership Act, __ (timeshaze estates) and § 12-61-401(4) (timeshaze use).' Timeshaze estates aze divided into two types: interval estates and time-span estates. Although neither estate specifically provides for"fractional fee ownership," the definition of a "time-span estate" in §38-33-110(8), would appear to include fractional fee interests: "(a) an undivided interest in a present estate in fee simple, the magnitude of the interest having been established by the time of the creation of the time-span estate either by the project instruments or by the deed conveying the time-span estate; and (b) an exclusive right to possession and occupancy of the unit during an annually recurring period of time defined and established by a recorded schedule ...." The Aspen Land Use Regulations define timeshare use in a similaz manner, specifying that the right of occupancy is on a periodic basis for a set period of time. §26.104.100, Aspen Code. However, many fractional fee projects do not have recorded schedules for the time period of an owner's occupancy or provide for an annually recurring time for possession and occupancy, but, instead, have a rotating occupancy time, or occupancy determined by lottery. Thus, many fractional fees would not fit squazely within the definition of time span estate.2 Since they aze fee interests, they can not be interval estates.' Therefore, they may not even be time-shazes under state law. See, e.g., Bernhardt v. Hemphill, 878 P.2d 107 (Col. App. 1994): where the contract did not reserve to ' A "timeshaze use" is defined as a contractual or membership right of occupancy to a unit for an allotted period of time. 2 The Utah Timeshaze and Camp Resorts Project Act, § 59-19-1 et seq. Utah Code Ann. defines timeshare estates to include fractional fees, the definition of which is not tied to specific recurring periods of occupancy. s An interval estate is an estate for years. H47424.wpd /90782.001 3 Aspen Fractional Fees-March 2001 +' ° ~'~. +~, s ~S the purchasers exclusive right to a particular unit they did not transfer any interest in real estate and were not ttme-span estates. Although fractional fees do not appeaz to fit within the definition of timeshazes under Colorado law, the real estate community has taken the position that, at least with respect to developer registration, fractional fees are timeshares and fractional fee projects must be registered under § C.R.S. 4. Conclusion Not all fractional fees fit within the generally accepted definitions of timeshaze because all of the definitions which relate to fee ownership seem to require that there is a specified, annually recurring period of occupancy to which the timeshare owner is entitled." On the other hand, a fractional fee is not a traditional ownership interest, even as an interest in common with several other co-owners. Under traditional ownership definitions, [he owner of a common interest would be entitled to use the entire property at all times together with all co-owners. There aze no limitations on time. Although a fractional fee appeazs to be a hybrid, neither a traditional timeshare nor a traditional form of ownership, it is closer to a timeshaze than any other property interest. Therefore, regulation of fractional fees as a variation of a timeshaze would be appropriate. III. THE PLANNING ISSUE GENERALLY Aspen faces two issues arising from the development of fractional fee ownership properties. As single family homes in residential districts aze either converted to or developed as fractional fee 4 A fractional fee development in which the owners had specified annually recurring occupancy periods would be a timeshare. p47424.wpd /90782.001 4 Aspen Fractional Fces-March 2001 r P«v .~. interests, Aspen is concerned about the impact on the surrounding neighborhood from the potential increased use of the property. In commercial hotel districts, the issue is whether the change to fractional fee ownership properties, with a net decrease in the number of overnight beds available, is a problem for Aspen's tourist industry. Although both involve the use of fractional fee properties, the impacts on the City aze very different, as will be the decision on whether it is appropriate to regulate such interests. IV. REGULATORY ISSUES A. General 1. General regulatory provisions Timeshaze interests aze regulated by statute in many states. Regulation of timeshaze interests is often consumer protection legislation, controlling the creation and sale of timeshazes with specific disclosure requirements affecting the advertising for sale of such interests, as well as requirements for the sellers of timeshazes, similar to the regulation of the sale of other securities. Legislation in each state which regulates timeshazes varies widely, although there aze uniform acts which have been adopted by some states, including the Model Real Estate Time Shaze Act and the Uniform Reai Estate Time Shaze Act. Alabama, Arizona, Connecticut, Florida, Georgia, Hawaii, Nebraska, Nevada, North Cazolina, Oregon, South Cazolina, South Dakota, Tennessee, Utah, Virginia and Wisconsin all have specific timeshaze statutes. Since in most cases fee timeshaze units aze found in condominium properties, timeshazes may also, or in the alternative, be regulated by state laws controlling condominiums. In Colorado, as in other states, timeshazes aze part of the state regulatory system of the sale of condominiums and other g47424.wpd / 90782.001 5 Aspen Fractional Fees-March 2001 ~. -, -, ~.~ a similaz multiple-owner developments. Condominium Ownership Act, §38-33-110, et seq., Colo. Rev. Stat., and Common Interest Ownership Act, §38-33.3-101 et seg. Most states, including Colorado, do not regulate non-condominium fractional fee ownership, e.g., single family house fractional fees. Consumer protection-type timeshaze statutes generally contain detailed provisions controlling offering statements, advertising practices, and the rights of a purchaser. See, e.g., Article 57, Ch. 19, Utah Code Ann., "Timeshare and Camp Resort Projects." Developers of timeshaze projects aze often required to obtain approval from state licensing authorities. See § 12-61-401 et seq., Colo Rev. Stat.; North Cazolina Time Shaze Act, §93A-39 et seg., N.C. Gen. Stat. The purpose of these statutes is to protect the public from unscrupulous and misleading sales and advertising practices. Where timeshazes aze regulated as part of condominium regulations, the focus is, similazly, consumer protection, although these regulations generally also control the rights and responsibilities of condominium owners vis-a-vis the original developer and the other condominium owners. 2. Fractional fees. The term "fractional fee" is not defined by any state statute except the Utah Timeshaze and Camp Resorts Project Act. Under §57-19-2(17) Utah Code Ann., a timeshaze estate is.defined as a "small undivided fractional fee interest in real property by which the purchaser does not receive any right to use accommodations except as evidenced by contract, declaration or other instrument defining a legal right." This definition does not require that the occupancy period be a set annually recumng period. The application of the Utah regulations is not limited to timeshazes in condominiums. p47424.wpd / 90782.001 6 Aspen Fractional Fees-March 2001 ~~ ..,, ~r However, although other states do not use the term "fractional fee", some states seem to have made an attempt to distinguish fractional fee type ownership from general time sharing. For _. example, South Cazolina defines the conveyance of 13 or fewer interests held by tenants in common, trusts, or partnerships, as "vacation multiple ownership interests" ratherthan as "time sharing units," and does not subject them to the same degree of consumer protection legislation, presumably since the sale of such units is not as widely or generally advertised to the public. §27-32-250 S.C. Rev. Stat. B. Reeulation of Use Since the concern in Aspen is not the sales or advertising practices or the rights and responsibilities of owners or developers, but the impact of a particulaz use, i. e., fractional fees, on the City, general consumer protection statutes offer no assistance. Instead, it is useful to examine how other states have dealt with the physical attributes of multiple owned units, rather than merely the legal process of their creation and sale. Many states have explicit statutory prohibitions on treating particulaz developments differently from other projects which look the same but have a different form of ownership. In the majority of such states, state condominium acts provide that local zoning regulations, subdivision controls and building codes may not impose any requirement on a condominium which it does not impose on other physically similaz property. In some states, however, this prohibition explicitly applies to timesharing, not just condominiums, and prohibits zoning, subdivision or other regulations from discriminating against or imposing requirements on timeshare programs which it would not impose on "a similaz development under a different form of ownership." See, e.g., §66-32-104 Tenn. Code Ann. The Model Real Estate Time Shaze Act, adopted in Wisconsin, Massachusetts and Rhode g47424.wpd / 90782.001 7 Aspen Fraztional Fees-March 2001 +~;, ~,: Island, also specifically provides that no zoning or other land use regulation may prohibit timeshazes or impose any requirement on timeshazes they do not impose onphysically-identical development under a different form of ownership. See, e.g., Wis. Stat. §707.10. In Colorado, §38-33.3-106 of the Colorado Common Interest Ownership Act prohibits a local government from enacting any building codes, zoning, subdivision or other real estate use law which imposes "any requirement upon a condominium or cooperative which it would not impose upon a physically identical development under a different form of ownership. [emphasis addedJ" This prohibition does not specifically apply to timeshazes. It would apply to the condominium interest, but not the division of the individual units within the condominium. It would also not include the conversion ofsingle-family homes to timeshazes since the definition of common interest community requires that an ownership interest include obligations with respect to property outside of the unit itself. Asingle-family home fractional fee would, presumably, give an owner fee ownership of the entire property and no obligations or common property, and, thus, would not be a common interest community. CIOA contains no restriction against local governments adopting land use controls applicable tonon-common interest communities. Thus, there is nothing in state lawwhich explicitly prohibits zoning or subdivision regulations which distinguishtimeshares or fractional fees from other "ownership forms." The key to all of these provisions is that a local government may not regulate, through land use controls, the form of ownership of a property. This prohibition is derived from the purpose behind zoning controls, which is to regulate the uses of land and their impacts on other uses and people, rather than to regulate ownership. Thus, if the physical use of a property and its impacts on the community aze the same regazdless of whether there is a single owner or multiple owners having a N47424.wpd /90782.001 g Aspen Fractional Fees-March 2001 ..•-.. -. - t.. fractional ownership interest in the property, local regulation through zoning may not be possible since the purpose of zoning is to regulate such things as density and not ownership. Alternatively, if there aze different impacts from fractional fee projects than from individually owned units or houses, the regulation would not be of the ownership, but of the use, and would be valid. Although, as a city with home rule powers, Aspen is not limited by the strictures of Colorado's zoning enabling legislation for cities, Title 31, Article 23, Col. Rev. Stat., Aspen's ability to zone fractional fee ownerships is limited by the courts. First and foremost, zoning, as an aspect of a city's police power, must be reasonable and be substantially related to the public health, safety, or general welfare. See, e.g., Boulder County Commissioners v. Echternacht, 572 P.2d 143 (Co1.1977). Courts in states other than Colorado have dealt with the issue of ownership as compazed to use, and have generally held that a condominium is not a "use" of property. Since a condominium is not a use of property, these cases have held that it can not be regulated by zoning. See e.g., Bridge Park Co. v. Borough of Highland Park, 273 A2d 397, 399 (N.J. App. Div. 1971) ("A building is not `used' as a condominium for purposes of zoning'; Wentworth Hotel, Inc. v. Town ofNew Castle, 287 A.2d 615, 619 (N. Hampshire 1972) ("the proposed condominiums differ from apartments only in the type of ownership and the ordinance is not concerned with the type of ownership, but with the number of families per building, the size of lots, and the chazacter of the use's; City ofMiami Beach v. Arlen King Cole Condominium Association, Inc., 302 So.2d 777 (Fla. 3d. DCA 1974) (a conversion to condominium ownership was not a change of use and thus it did not affect an existing valid non- conforming use); FGL&L Property Corp. v. City ofRye, 485 N.E.2d 986 (N.Y.1985) ("zoning deals basically with a land use and not with the person who owns or occupies it"). #47424.wpd / 90782.001 9 Aspcn Fractional Fees-March 2001 . -, ~- .s ,~~, w.r There do not appeaz to be any cases examining whether zoning regulation of timeshazes or the division of interests within a unit is possible. The closest case is United Property Owners _ Association ofBelmar v. Borough of Belmar, 447 A.2d 933, 936 (N.J. Super 1982), in which aNew Jersey appellate court examined a resort community's zoning regulations which prohibited the seasonal rental of residential property except in certain limited residential zones. The court concluded that "[z]oning laws aze designed to control types of uses in particular zones and aze not ordinarily concerned with periods of occupancy or the property interest of the occupants." . The court viewed the time limitation on the renting of property (property could not be rented out for periods less than one yeaz) as an azbitrary and unreasonable restraint on the use of private property. Thus, such regulation was not permitted. Therefore, to the extent that Aspen wanted to regulate a type of ownership, i.e., fractional fee ownership, per se, it probably could not. Thus, for example, Aspen could not say that properties which were owned as fractional fees were prohibited while properties which had, e.g., 8 lessees, each with a lease for 6 weeks were permitted: the distinction would be based solely on the Type of ownership and not on the impact.. However, if Aspen defined fractional fees and similaz short term occupancies, regazdless of the form of ownership, as a different type of use from other uses because of different impacts, so that what was regulated was not the ownership but the use, such regulation could be possible. The Belmar case, while seeming to prohibit the regulation of occupancies based on the term of the rental period, focused primarily on the effect on property owners. In another New Jersey case, Hartman v. Township of Randolph, 155 A.2d 554 (N.J. Superior Ct. 1959), the Court examined the effect which a change from seasonal to year-round use of a bungalow colony would N47424.wpd /90782.001 1 ~ Aspen Fractional Fca-March 2001 ,M,,, ~.~ ~,~+ have on the general welfaze of a conununity and concluded that such change would be "a substantial and therefore an unlawful extension of anon-conforming use." 155 A.2d at 138. The purpose of the prohibition on regulating the form of ownership originally rose out of a concern that communities wanted to exclude the condominium form of ownership. A traditional condominium generally has the same number of units apartments as an identical rental apartment building and the units aze occupied in the same way, with an identical impact on the community. However, units owned as "fractional fees" and similaz multiple interests in a single unit have different impacts from a single occupancy unit, because instead of one family using the home as a vacation home for a short period of time during the year, the unit is fully occupied throughout the year. As the New Hampshire court in the Wentworth Hotel case recognized, the zoning ordinance is concerned with such factors as the number of families per building and the chazacter of the use, 287 A.2d at 119, and invalidated an ordinance which regulated condominiums solely on the basis of ownership and not with regard to these impact factors. Colorado ]aw gives local governments very broad authority to regulate land use. Under the Local Government Land Use Control Enabling Act, §29-20-101, et seq., Col. Stat. Rev., local governments can regulate the location of activities which result in significant changes in population density, §29-20-104(1)(e), as well as regulate the use of land "on the basis of the impact thereof on the community," §29-20-104(1)(g). C. Subdivision Condominiums, in addition to being a form of ownership, involve the subdivision ofwhat had formerly been a single pazcels into multiple units to allow the sepazate fee ownership of each. Thus, subdivision controls generally affect condominium development. Since fractional fee ownership g47424.wpd /90782.00! 1 1 Aspen Ftaztional Fees•March 2001 ~ 4 involves the separation of a single property or unit into multiple time ownerships, the creation of fractional fee interests in Aspen could, conceivably, be a subdivisions, subject to local subdivision __ laws e As with timeshaze regulations, subdivision regulation varies widely by state. In some states, condominiums aze specifically defined as subdivisions, while in other states, the definition of subdivision excludes condominiums. The specific defmition of subdivision in a state statute will determine whether or not these statutes are applicable to fractional fees. Generally, if a condominium is a subdivision, the definition will be broad enough to include fractional fee ownerships. If a fractional fee is a subdivision, then it is subject to the local review process created by local subdivision regulations. Subdivisions aze defined in different Colorado statutes depending on the purpose of the regulation. The Registration of Subdivision Developers Act defines subdivision as the division of real property into 20 or more interests for residential use, and specifically includes a group of 20 or more timeshazes. § 12-61-401(3) Col. Rev. Star. Under this definition, the conversion of a hotel to a condominium would be a subdivision. Different definitions are contained in Article 28 of Title 30 regarding county planning and Article 23, Title 31, regazding municipal planning and zoning. §30-28-101(10), Col. Rev. Star. provides, in relevant part, that a subdivision is any parcel of land which is to be used for multiple dwellings, including condominiums, or which is divided into two or more interests in common. Section 31-23-201(2) C.R.S. defines subdivision to include the s A subdivision is defined in the Aspen Code as: "The process, act, or result of dividing land into two or more lots, parcels, or other units of land or separate legal interests for the purpose of transfer of ownership, leasehold interest, building, or development." (Emphasis added.) b As a home rule city, Aspen is not controlled by state subdivision enabling legislation. A47424.wpd / 90782.001 12 Aspen Fractional Fees-March 2001 /'~. .' 1 ~i/ ".u/ condominiumization ofproperty, but does not include the division of land into two or more interests in common. All definitions of subdivision in Colorado, including in the Aspen Code, relate to the division of land or real property, although the Aspen Code, in addition, provides that subdivisions include time-sharing. ,However, the definition specifically excludes the division of land created by the acquisition of interests as tenants-in-common. The division of a unit in a condominium into fractional fee ownership interests is not a division of land, and, therefore, subdivision law should not be applicable to fractional fees. The conversion of, or the construction of, asingle-family home as fractional fee ownerships would be subject to subdivision regulation only if more than 20 fee interests were created. Excluding fractional fees from the definition of subdivision is consistent with the goals of subdivision regulation, which have included providing a more efficient method for selling land by providing for blocks and lots to define a pazcel, controlling urban development by requiring on-site improvements, ensuring adequacy ofpublic improvements by mandating dedication of land for these purposes, and by linking development to the control of sprawl. See Model Subdivision Regulations, Robert H. Freilich and Michael M. Shultz, APA 1995, pp. 1-4. D. Regulation by Aspen As a home rule city, Aspen has broad authority to legislate and control local land use, subject to its own charter and code. Article XX, §6, Colorado Constitution; see City of Colorado Springs v. Smartt, 620 P.2d 1060 (Col. 1980). A home rule city's zoning authority is governed by its own charter and ordinances. Zavala v. City and County of Denver, 759 P.2d 664, 669 (Col. 1988). #47424.wpd / 90782.001 13 Aspen Fractional Fees-March 2001 ~, Whether Aspen can regulate fractional fees thus depends on its charter and code as well as the provisions of state law. As discussed above, the only provision of Colorado law which might __ preclude such regulation is the prohibition on the treatment of condominiums differently from physically similaz property. To the extent that Aspen intends to adopt zoning or other regulations relating to the use of single family homes as fractional fees, there is nothing in Colorado law to prevent that. With respect to the use of zoning and other land use provisions to control fractional fees inmulti-family buildings, there would similazly be no problem unless the property were held in condominium ownership. If the property were a condominium, then §33-33.3-106 Col. Rev. Stat. might prevent Aspen from adopting such regulations. However, as discussed eazlier, the purpose of the prohibition on regulation ofcondominiums was to prevent the outright prohibition of condominiums, where the use of a property was considered the same as another use, and the only difference was ownership. As long as Aspen can show a different impact based on use, not ownership, the regulation of fractional fees in a condominium should be valid. In determining the applicability of state law to home rule cities, the Colorado courts have distinguished among matters of purely local concern, where the local ordinances take precedence; matters of statewide concern, where the local government has power only if expressly authorized by the Colorado General Assembly; and matters of mixed local and state concem. Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30 (Col. 2000). In matters of mixed state and local concem, home rule municipalities may adopt ordinances as long as they do not conflict with or aze g47424.wpd /90782.001 14 Aspen Fractional Fees-March 2001 r -~.. preempted by, state statute. See U.S. West Communication, Inc. v. City ofLongmont, 924 P.2d 1071 (Col. App. 1995). __ Section 38-33.3-106 clearly evidences an intent by the state to preempt the local regulatory control of condominiums to prevent them from being treated differently from other physically identical structures. However, §38-33.3-106 does not prohibit the regulation of timeshazes. Zoning and land use controls aze traditionally matters for local governments. A local government's interest in land use control is "one of orderly development and use of land in a manner consistent with local demographic and environmental concerns." Board of County Commissioners, La Plata County v. Bowen/Edwards Associates, Inc., 830 P.2d 1045, 1057 (Col. 1992). Orderly development of a city includes the ability to regulate density. See Di Salle v. Giggal, 261 P.2d 499 (Col. 1953). Similarly, a city can regulate intensity of use. The state's interest in controlling timeshazes, including fractional fees, is, presumably, to ensure that such form of ownership is available. Given the distinct nature of these interests, it is probable that any legislative intent to prohibit local land use regulation of timeshazes would be expressly stated. "A legislative intent to preempt local control over certain activities cannot be inferred merely from the enactment of a state statute addressing certain aspects of these activities." Bowen/Edwards Associates, Inc. at 1058. The purpose ofzoning regulations is to control development and use, not ownership. Although there is no state prohibition on land use regulation of timeshazes, any zoning ordinance must be directed to use and development. Therefore, as long as Aspen establishes zoning regulations on the use of property for fractional fees and other similaz multiple short-term occupancy no matter the N47424.wpd /90782.001 15 Aspcn Fractional Fees-March 2001 ~. .~~- ,.,, ...:. form of ownership, which aze intended to regulate the impact of such uses, and not the form of ownership, such regulation should be legally defensible. V. PLAIVNINGANALYSIS A. Introduction In the City of Aspen, fractional fee ownership will likely occur under one of two scenarios, either: 1) conversion of existing single-family homes' from whole ownership units to fractional fee ownership or 2) conversion of existing lodging and accommodation units from single or whole ownership into fractional fee ownership of individual units.e Under both scenarios there may be impacts not only within the zoning district where the conversion takes place, but throughout the city at-large. The discussion that follows is structured accordingly, and sets out the likely impacts of fractionalized ownership on the City ofAspen, at both the neighborhood and city-wide levels. In prepazation of this report, we have considered the plans and policies of approximately twelve resort communities nationwide, five of which aze in Colorado, that have dealt with a variety of accommodations including traditional hotels, timeshares, short-term rentals, and, in at least one case, fractional fee unit development. In general, the issues facing these communities, and which face Aspen today, affect both residential and commercial zoning districts, and may carry 7 In this report, "single-family homes" means detached residential structures consisting of a single dwelling unit. s Although conversion of existing properties is the most likely scenario, fractional fees may also be created in newly constructed buildings. The analysis would be the same. #47424.wpd / 90782.001 16 Aspen Fractional Fccs-March 2001 ~ -~ v implications faz beyond the boundaries of the zoning district in which they aze located. As Aspen considers whether to regulate fractional fee developments, it is useful to take from other communities their experience in regulating this and other forms of resort accommodations. In this section, we discuss the planning issues that have arisen in a number of other communities and the regulations they have implemented to address them. While some measure of caution should be taken when analogizing Aspen's circumstance to those of other local governments, by examining other resort communities we get a reliable indication of the sorts of planning impacts that fractional fee units may have, both at a neighborhood and a city- wide level. Although a number of the communities, both in Colorado and azound the country, have dealt with developments similar to, though distinct from, fractional fee ownership, it is important to note that only one community examined here, the Town of Vail, has attempted to regulate fractional fee projects as a use distinct from other traditional accommodations like hotels, timeshazes, or short-term rental ofsingle-family homes. Even though the form of ownership may be different, the experiences of these other communities offer an indication of the land use impacts fractional fee development may impart. The City of Aspen may fmd that some land use impacts aze best addressed with zoning and regulatory techniques that do not address, or apply strictly to, the fractional fee form of ownership. This is particulazly true where conversion of single-family housing stock is concerned. B. Sinele-family Residential BConversion from Sinele-owner to Fractional Fee Ownership g47424.wpd / 90782.001 1 ~ Aspcn Fractional Fccs-March 2001 .,., ...~ Ifsingle-family homes are converted to a fractional fee form ofownership, the City ofAspen may experience different land use impacts than cun•ently exist in its single-family residential neighborhoods. On the other hand, should the City decide to encourage short-teen occupancies in certain residential neighborhoods, there are a number of impacts that it should address so as to minimize negative land use impacts. As is discussed below, there aze a number of regulatory approaches the City of Aspen should consider in this regazd. First, for example, the City may continue to allow owners ofsingle-family homes to lease their homes to short-term tenants at certain times of the yeaz, and to allow fractional fee projects in single-family districts. Both Westhampton, New York, and Breckenridge, Colorado have taken this sort of approach to address the demand for seasonal, short-term rental of single-family homes and to curb potential land use impacts on affected neighborhoods. Second, Aspen may determine that in certain residential districts, use ofsingle-family homes should be restricted to permanent residents and all short-term use or fractional fee projects should be prohibited or severely restricted.9 Key West, Florida has taken this approach, by limiting short-term use to selected zoning districts. The regulatory schemes used in these three communities aze discussed in some detail below. It is important to beaz in mind that none of these communities regulate based on form of ownership, and that the regulations discussed below aze applied based entirely on the short-term nature of the rentals. However, if Aspen were to experience, or to allow in certain districts, conversion from traditional single family ownership to fractional fee ownership, the land use impacts 9 The term shon-term'rental refers to those units that are rented out as vacation rentals by the owner of a home. As used here, it is a use distinct from asingle-family home under fractional fee ownership. p47424.wpd /90782.001 1 g Aspen Fractional Fees-March 2001 ~... , may be similar to short-term rentals. That is, if the owners of these homes aze, in reality, short-term occupants, the City can expect, at least to some degree, land use impacts more akin to hoteUtourist uses than to traditional residential uses. If the City decides to expressly allow or encourage fractional fee projects within single-family districts, there aze several new impacts that it should anticipate at the neighborhood level, as well as impacts on occupancies in the City. 1. Land Use Impacts Most land use impacts peculiar to fractional fee, single-family homes and other short-tear occupancies will extend only to the immediate neighborhood. In neighborhoods where homes aze occupied yeaz azound by permanent residents, the threat of fractional fee interests causes obvious concerns with respect to noise, traffic, and other nuisance matters. However, these impacts aze, for the most part, limited to the zoning district in which the short-term, fractional fee use is occumng. Regazdless, the City should take these "neighborhood" impacts into account when determining whether to regulate fractional fee projects in single-family districts, and, if regulated, in which districts they should be allowed. In districts where short term rentals aze permitted, fractional fees should be similazly be allowed since land use impacts will be comparable: Furthermore, any regulatory restrictions applied to short term rentals should be similazly applied to fractional fee single-family homes, as well. Any distinction between the regulation of the two uses should be based entirely on identifiable distinctions between the impacts of the two uses, should they emerge. When dwelling units traditionally reserved for long-term use aze converted into short-term or lodging-type uses, the character oftheonce-residential district is likely to change. By considering the regulation ofshort-term rentals in other communities, Aspen can anticipate some of the impacts g47424.wpd / 90782.OOI I9 Aspen Fractional Fees-March 2001 ~,. _ ~„ that may result if fractional fee projects aze allowed in residential districts. Both the City of Key West, Florida and the Village of Westhampton, New York have had to cope with mounting pressure _, from homeowners to convert traditionally long-term, residential homes into short-term rental properties, at least during the height of tourist season. Both communities were experiencing undesirable neighborhood impacts as a result of this trend. Key West chose to prohibit short-term occupancies in most traditionally single-family districts, while Westhampton chose to accommodate them by specifically addressing potential negative land use impacts on the affected neighborhoods. Following a brief discussion of these two communities, is an analysis of the regulations the Town of Breckenridge adopted to address the neighborhood impacts ofshort-term rental ofsingle-family homes. a. Kev West. Florida In Key West, the short-term rental of whole ownership, single-family homes created considerable local controversy. Neighbors complained of the noise, traffic, and pazking problems that resulted from the short-term use of traditional, single-family homes. Short-term rentals were criticized for their impacts on the "chazacter and stability" of residential neighborhoods. Occupants of these rentals were chazacterized as "good citizens," but were dispazaged for their failure "to contribute to activities that strengthen a community." In response, the City of Key West adopted a transient living accommodations ordinance in 1998,10 The ordinance limits the ability of homeowners in residential districts to lease their property for periods of less than thirty (30) 10 City of Key West Ordinance #98-31. #47424.wpd /90782.001 20 Aspen Fractional Fees•March 2001 w consecutive days, in an effort to curb many of the district-level complaints that had become typical in established Key West neighborhoods. A copy of the Key West ordinance is attached at Appendix -- A to this report. Should the City of Aspen decide that fractional fee projects aze undesirable in certain residential districts, the City of Key West ordinance may provide some guidance for regulating this use. Specifically, the ordinance phases out pre-existing short-term rentals in districts where this use is considered incompatible with existing permanent residential uses, but permits it in other districts. In districts that allow short-term use of single-family homes, property owners must secure a city license and provide certain basic information that allows the City to track short-term uses in residential districts. Additionally, the City imposes regulations that ensure fire safety, pazking, and property owner accountability should noise or other nuisance matters arise. Finally, the ordinance provides for fees, penalties, and enforcement procedures. The Key West ordinance applies only to properties which aze leased for a short term; thus applying differently to properties based on .ownership. Although this has not been held to be invalid, to avoid any problems Aspen regulations should not depend on whether property is leased or owned for short periods, but whether the occupancies aze for short terms. Aspen may consider the licensing requirements used by the City of Key West as an appropriate means ofregulating fractional fee projects insingle-family, residential districts. " b. Westhampton. New York - "Due to administrative appeals made under Florida law, the implementation of Key West's ordinance has been delayed. These appeals are based largely on "area of critical state concern" guidelines peculiar to the Florida Keys and Florida's growth management program. #47424.wpd /90782.001 21 Aspen Fractional Fees-March 2001 ~. F~, a... The City of Aspen may identify residential districts in which increased tourism would be appropriate and even welcome, particularly in districts that aze unoccupied for long periods of the off-season. Should that be the case, the Village of Westhampton provides an excellent example of how a community can address the negative impacts of short-term rentals while continuing to accommodate this alternative use in residential districts. Unlike Key West, the Village of Westhampton has been more accommodating of the short-term use of single-family homes. This is likely due to the fact that demand for this alternative use was very strong and was limited to the summer months, whereas in Key West, demand was year azound and concentrated in neighborhoods with significant permanent residents, as opposed to second-home owners. Westhampton adopted an ordinance that limited the "multiple occupancy" of one- and two-family dwellings, in order to address overcrowding, excessive traffic, parking problems, noise, and an overburdening of public facilities. A copy of Westhampton's ordinance is included at Appendix B of this report. The ordinance requires permits to be secured for residential properties leased for the summer or any part of the summer. Special provisions apply to all permit holders, including a limitation on the number of vehicles parked on the premises, a limitation on the number of unrelated people occupying a unit, and a notice requirement so that all property owners within 200 feet of the summer rental property aze awaze of the short-term use.. The Westhampton ordinance is fairly restrictive and involves rather sophisticated guidelines and requirements, of both the tenant and the landowner. However, summer rentals remain in high demand, and the V illage seems to have found an acceptable means of curbing neighborhood impacts while responding to the mazket demand for this short-term residential use. The extent to which Aspen could follow the Westhampton example, would depend, p47424.wpd / 90782.001 22 Aspen Ffactlonal Fces-March 2001 F.,~ . , ~.. of course, on whether demand for fractional fee projects is or becomes significant in residential districts. If so, this regulatory scheme may offer some guidance to the City. -- c. Breckenridge, Colorado For the past five years, the Town of Breckenridge has allowed "chalet houses" as a distinct, allowable use in residential districts. Similar to the situation confronting Key West and Westhampton, Breckenridge developed the chalet house in response to the increased short-term rental ofsingle-family homes and the complaints that accompanied it. Neighbors complained of the traffic, unmet pazking demand, and noise that resulted from short-term rentals in largely residential districts. By merely adopting a definition of chalet house and identifying the districts in which they are allowed, Breckenridge has regulated the manner in which homes are rented, while continuing to allow the short-term rental ofsingle-family, detached homes. Homes that exercise the option of becoming a chalet house must limit rentals to tour groups and must employ the services of a professional property management company.12 Breckenridge defines a "chalet house" as asingle-family residence or duplex used for the temporary housing of tour groups for periods of between two (2) and thirty (30) consecutive nights. Homeowners must secure a license from the Town and identify a manager who will provide meals to the tour group, as well as management services like housekeeping and transportation. The town 12 Interestingly, short-lean rentals aze allowed in Breckenridge, even if the owner opts not to qualify as a chalet house. It seems the chalet house scheme was developed in anticipation of significant regulation of short-term rentals ofsingle-family homes. However, the latter never occurred, but "chalet houses" continue to be popular in Breckenridge. This is due to marketing possibilities that present themselves through local property management fums and tour operators. Regardless, its mention here is intended to provide a Colorado context to the discussion of short-term rental regulation. #47424.wpd / 90782.001 23 Aspen Fractional Fccs-March 2001 ~M has limited the negative impacts of short-term rentals by discouraging chalet house tenants from driving their own cazs; by requiring homeowners to provide housekeeping services; and by - prohibiting any alterations to the house that would change the "single-family residential chazacter" of the structure. Notably, the Breckenridge ordinance does not require a property owner to qualify as a chalet house in order to rent his or her house on a short-term basis. But, by setting forth chalet house criteria, the Town encouraged a number of homeowners to limit short-term rentals to the tour group model and to curb potentially negative impacts on affected neighborhoods. Essentially, homeowners have been provided with a rental scheme that may not have been appazent otherwise. Though not required, many homeowners have chosen to exercise this option in response to an appazent demand for alternative resort accommodations. Should the City of Aspen choose to regulate fractional fees projects in single-family districts, it may consider some of the limitations imposed on Breckenridge's chalet houses; specifically, the limit on private cazs, the mandatory management company, and the limitation on structural alteration of the home. 2. Impacts on Occupancy Impacts on city-wide occupancy rates aze difficult to predict. For the most part, they will depend on the extent to which occupancy of single family homes with fractional fee ownership interests have higher occupancies than what was typical when the home was held in traditional fee simple ownership. However, even if occupancy rates of individual homes is increased, there may not necessarily be a concurrent increase in occupancies city-wide. The extent to which additional visitors could be generated, as opposed to merely shifting occupancy from traditional N47424.wpd /90782.001 24 Aspen Fractional Fees-March 2001 .~ accommodations to single-family homes is beyond the scope of this report. The City will have to consider the extent to which fractional-fee ownership ofsingle-family homes will draw visitors that _. would not otherwise visit Aspen, and thereby increase the occupancy rates city-wide. Again, there is very little data to help answer these questions. However, as multi-unit fractional fee projects aze developed in Colorado and azound the country, their effect on occupancy, at both the project level and city-wide level, will become cleazer. As is discussed below, the Town of Vail has experienced increased occupancies inmulti-unit fractional fee projects themselves, but has been unable to discern the overall effect on the neighborhood or the town at-lazge. Summary As faz as could be ascertained, the homes subject to the regulations discussed here were whole ownership units, not held as fractional fee. However, should homes in Aspen convert from whole ownership to fractional fee units, increased neighborhood impacts become more likely, since durations of occupancy will decrease to accommodate short-term visitors to the area and there will be increased intensity or level of use. Also, single-family fractional fees may also remain occupied more often than do short term rentals which aze more likely to be occupied only during holidays and extended weekends during the season. The extent to which single-family conversions will alter a neighborhoods chazacter is difficult to predict, and depends on how "purely" residential the district was before the conversion occurred. On the other hand, fractional fee properties will have occupancies of longer duration than short term rentals, hotels and other lodging facilities. Unfortunately, of the communities queried for this report, none regulate the conversion of single-family residential homes to fractional fee ownership, or even view this sort of conversion as N47424.wpd / 90782.001 25 Aspen Fractional Fees-March 2001 d..• one to warrant attention. It remains to be seen whether single-family homes under fractional fee ownership would cause the noise, traffic, pazking, and property maintenance issues experienced by the local governments discussed here. Since single-family fractional fee owners occupy the unit, as opposed to a disinterested lessee, fractional fee projects will cause fewer negative impacts than short- term rentals. There is reason to believe that, unlike short-term renters, fractional owners have a pride of ownership in their property that fosters proper maintenance and a respect fot neighbors. Although the average ownership interest in a fractional fee ranges from six to twelve owners per unit, per yeaz, owners generally divide this time into one to two week increments throughout the yeaz. However, as is discussed in the section below, duration of occupancy varies widely from project-to-project, depending on the particulaz fractional fee arrangement. Ifsingle-family, fractional fee projects become commonplace in Aspen, the City should regulate the land use impacts that result depending on occupancy patterns that emerge. Additionally, neighborhood impacts should be measured in light of the existing chazacteristics of the affected district, taking into account whether the neighborhood has been more residential or more transient in nature, or whether homes aze occupied by permanent residents or by second home owners for limited times throughout the year. These considerations should guide the City as it determines whether fractional fee projects should be allowed in traditionally residential districts, and if so, which regulatory options should be exercised to address neighborhood-level land use impacts. C. Commercial units: Conversion of hotel or other multi-unit structures to Fractional Fees The second, and perhaps more likely, scenario under which the City of Aspen will address fractional fee projects, is the conversion from traditional hotel properties tomulti-unit fractional fee k47424.wpd / 90782.001 26 Aspcn Fractional Fees-March 2001 .... projects." If fractional Fee projects aze permitted in the City of Aspen, at least to some degree, there will be impacts the city can anticipate and should consider as future conversions occur. Of the communities examined in preparation for this report, the Town of Vail is the only one to specifically address fractional fee projects in its land use regulations. Vail's ordinance provisions are discussed below, and are examined in light of both the land use impacts fractional fee units have had in the community, as well as their impacts on occupancy rates. Subsection I, below, offers some insight into the land use impacts Aspen can anticipate should conversion to fractional fee ownership become widespread in the local lodge accommodation mazket. Subsection 2 analyzes the occupancy rates that may typify fractional fees. This discussion stems entirely from interviews with George Ruther, a planner in Vail; and Bill Sullivan, developer of the Austria House, Vail's first fractional fee project. Finally, this section concludes with an overview of the issues raised by this discussion of land use and occupancy impacts, and of the issues that remain unresolved at this eazly stage of what appears to be a trend towazds fractional fee projects in resort accommodations. Land Use Impacts Since most hotel conversions, or multi-unit fractional fee projects, will occur in districts where hotel and lodging uses aze widespread, many of the neighborhood-level impacts discussed in the section above have diminished relevance to the current discussion. In terms of immediate land use and planning impacts, multi-unit fractional fee projects will have impacts very similaz to traditional hotels ortimeshazes now operating in the commercial and lodging districts of Aspen. The 13 Note that the development of new fractional fee projects will have impacts on land use and occupancy that are similar to hotel conversions. Unless otherwise indicated, conclusions drawn with respect to conversions apply to new development as well. M47424.wpd / 90782.007 27 Aspen Fractional Fees-March 2007 .,. .w..r extent to which this will be the case is difficult to assess given how few communities have developed fractional fee projects, a lack of consistency between the communities that have developed them, and the varying configurations of the projects themselves. Some multi-unit fractional fees aze built and operated in a manner that is essentially indistinguishable from a hotel, while others aze more typical of a timeshaze, with guests limited almost entirely to the owners of the units. Typically, these developments aze less intense and generate less traffic per squaze foot than traditional hotels. In fact, some fractional fee projects may have fewer total units per squaze foot than a traditional hotel, so land use impacts, such as traffic, pazking, noise, and demand on infrastructure may be less than those generated by a hotel. An important caveat is required on this point, however. Fractional fee projects that make short-term accommodations available to "walk-in" guests cleazly will have neighborhood impacts similaz to traditional hotels. Many multi-unit fractional fee projects aze constructed so that individual bedrooms can operate as "lock-outs" and be rented on a nightly basis in a manner typical of a hotel.14 Fractional fee projects that operate in this manner may' generate increased traffic or pazking demand than those that do not. Aspen should consider regulations that address both types of multi-unit fractional fee projects, and apply them as developments aze proposed or altered in the future to accommodate hotel-type units. City-wide transportation and other vital infrastructure should be planned to accommodate fractional fee projects just as they would for hotels and other multi-unit lodging accommodations. _ 14 A "lock-out" refers to a bedroom, or portion of a dwelling unit, that can be rented individually, as a separate unit from [he larger dwelling. For example, athree-bedroom fractional fee unit can be designed so that the bedrooms are secured and rented separately. M47424.wpd / 90782.001 28 Aspcn Frectional Feu-March 2001 -- .m . >~ ~. Ofparticulaz concem, however, is the impact fractional fee projects may have on occupancies ' throughout the City. This, in large part, will depend on the extent to which the fractional fee projects operate as hotels, as compared to timeshazes. Vail has structured its regulations to ensure that fractional fee projects aze developed in conjunction with existing short-term accommodation uses and operate in a manner similar to a traditional hotel. 2. Impacts on Occupancy Like many of the Colorado communities examined, Aspen has in place a lodge preservation initiative to protect and enhance the supply ofshort-term accommodations available to Aspen's visitors. As fractional fee projects become more typical in resort development, the City's interest in preserving the long-term supply of these accommodations is clearly implicated. Of particulaz concern, of course, is the occupancies that will typify fractional fee projects in both the short-run as well as the long-run. Specifically, how do the occupancies of fractional fee projects compaze to those of hotels and traditional timeshazes? Data is somewhat limited at this eazly point in the fractional fee trend. Two sources of information have been examined in the prepazation of this report, the Town of Vail's estimates, discussed in subsection 2a, and Bill Sullivan's perspective on fractional fees and on anticipated occupancies, discussed in subsection 26, below. a. -Vail. Colorado The regulatory scheme that underlies the Town of Vail's control of fractional fee projects provides constructive insight into the case-specific issues that arise when local governments review and consider approval of these projects. As mentioned above, Vail's regulations aze deliberately designed to achieve two important goals: N47424.wpd / 90782.001 29 Aspcn Fractional Fees-March 2001 .., r~, ~... 1) to preserve existing lodge accommodations; and 2) to encourage new multi-unit fractional fee projects to operate more like hotels than traditional timeshazes. Vail planners believe that increased city-wide occupancies hinge on the extent to which they successfully accomplish these two objectives. i. The ordinance The Town of Vail adopted regulations to address fractional fee uses in 1997. The issue surfaced when a fractional fee project was proposed in a Public Accommodations district, and confusion azose as to the appropriate land use classification for the project. The Town was inclined to classify the project as a condominium, while the developer asserted the project was really a hotel, a use cleazly allowed in the Public Accommodations district. The regulations discussed here, and included as Appendix C to this report, resulted from this controversial project. Since this original fractional fee project, Vail has created a new use category called "fractional fee club." Fractional fee regulation stems largely from three definitions and the conditional use criteria discussed below. These three definitions aze as follows: Fractional fee: A tenancy in common interest in improved real property, including condominiums, created or held by person, partnership, corporations, or joint ventures or similaz entities, wherein the tenants in common have formally arranged by oral or written agreement or understanding, either recorded or unrecorded, allowing for the use and occupancy of the property by one or more cotenants during any period, whether annually recurring or not which is binding upon any assignee or future owner of a fractional fee interest or if such agreement continues to be in any way binding or effective upon any cotenant for the sale of any interest in property. Fractional fee club: A fractional fee project in which each condominium unit, pursuant to recorded project documentation as approved by the Town of Vail, has no fewer than six (6) and no more than twelve (12) owners per unit and whose use is established by a reservation system. Each of the fractional fee club units aze made available for short-term rental in a managed program when #47424.wpd / 90782.OOI 3 ~ Aspen Fractional Fees-March 2001 .~,. ._. ,~,: not in use by the club members. The project ismanaged on-site with a front desk operating twenty- four (24 hours a day, seven (7) days a week providing reservation and registration capabilities. The project shall include or be proximate to transportation, retail shops, eating and drinking establishments, and recreation facilities. Fractional fee club unit: A condominium unit in a fractional fee club described as such in the project documentation and not an accommodation unit within the fractional fee club. Fractional fee clubs aze allowed as a conditional use in only fcur zoning districts, al] of which aze oriented towards transient accommodations and tourist amenities. Conditional use criteria address the Town's concern that accommodation units be maintained to preserve existing lodging facilities. That is, additional fractional fee units aze not permitted unless existing hotel units aze preserved, either in number or floor azea. If the proposed fractional fee is a conversion from an existing hotel, the new project, once converted, must maintain an equivalent number of accommodation units as it had prior to conversion. However, equivalency may be achieved by either maintaining the same number of hotel units or by maintaining a squaze footage equivalent to that existing prior to the conversion. In other words, a conversion from ahotel to ahotel/fractional fee hybrid must not result in more hotel units than fractional fee units and cannot result in an overall reduction in total units.15 If the proposed fractional fee is a new development, Town provisions restrict the gross residential floor azea (GRFA) that can be given to fractional fee units. Specifically, accommodation unit GRFA must be at least as great as fractional fee GRFA. If a proposed project includes lock-out units, these units aze not calculated as traditional accommodation units, but rather as fractional fee units. In addition, applicants for a fractional fee club must demonstrate the ability to "create and maintain a high level Note that this "hybrid" of hotel rooms, or accommodation units, and fractional fee units, is the only manner in which Vail will permit fractional fee clubs. k47424.wpd /90782.001 31 Aspcn Fractional Fccs-March 2001 .~.,, of occupancy." Town provisions also address employee housing and require the owners' written approval of any development or conversion. Since the adoption of these ordinances the Town of Vail has processed two projects under their provisions. Planner George Ruther feels the regulations have served the Town well, helping it to protect the existing bed base, while at the same time encouraging hotel-type facilities in new fractional fee projects. ii. Factors Influencing Occupancy One of the most important land use impacts that widespread fractional fee projects may have is also the most difficult to predict: occupancies and impacts on the local bed base. This task is a difficult one, for three primary reasons. First, there are relatively few fractional fee projects that have been developed and in operation for any reasonable period of time. This makes long-term predictions of occupancy chazacteristics particulazly suspect. Second, of those that have been developed, many fractional fees operate in conjunction with other land uses, like hotels and traditional timeshazes, making it difficult to attribute a shifr in occupancy to the development of a particulaz fractional fee project. Third, even where occupancy rates for a particular fractional fee development have been documented, the extent to which the community's overall occupancy rate is affected is difficult to ascertain. However, should fractional fee projects become typical in Aspen, the City can regulate them in ways that may protect, and may well enhance, its inventory of accommodation units. Vail's sole fractional fee project has been in operation for about four yeazs. Mr. Ruther reports that occupancy rates for this project aze greater than those found at traditional hotels and A47424.wpd / 90782.001 32 Aspen Fractional Fees-March 2001 7~. ~./ lodging facilities. This project, which is a hybrid of traditional accommodation units and fractional fee units, experiences annual occupancy rates of about 75%, as compazed to traditional hotels in Vail, which typically experience annual rates of about 65°/n. The fractional fee units aze more likely to enjoy increased occupancies during the off-season than at other times of the yeaz. On balance, Mr. Ruther concludes that the fractional fee project has increased the Town of Vail's ability to maintain high occupancies. He feels that without this additional and distinct accommodation offering fractional fee owners would not have otherwise visited Vail. The extent to which the bed base ofAspen will be affected by fractional fee projects probably depends on the extent to which future projects aze built and operated in a manner similar to a hotel. Vail's land use regulations encourage short-term occupancies in fractional fee projects by requiring fractional fee projects to include hotel-type services, to limit the number of owners per unit, to include an equivalent number of accommodation units and fractional fee units, and to otherwise demonstrate, through a conditional use procedure, an ability to maintain high occupancy rates over the long-term. First, Vail requires all fractional fee clubs to be developed in a manner very similaz to traditional hotels. Specifically, it requires a front desk with 24-hour management and reservation services. Also, fractional fee clubs, by definition, must be situated so that club users have access to visitor amenities, including transportation, retail, restaurants, and recreation facilities. By requiring fractional fees to provide guest services and convenient access to visitor amenities, Vail has guided this emerging resort accommodation into the realm of traditional hotels and lodging facilities. Should Aspen choose to accommodate fractional fee development, it may include similar N47424.wpd 190782.001 33 Aspen Fractional Ftts-March 2001 _ ,~,, 4, . ~yI requirements. History has demonstrated that, over the long-term, occupancies aze generally stronger for hotels than traditional timeshazes. As such, Aspen's long-term interest in lodge preservation will be well-served to the extent fractional fees operate in concurrence with, and in response to, traditional hotel market demand. It is necessary to remember that fractional fee projects have not been in existence long enough to ascertain reliable ownership patterns and turnover rates over the long-term. The second way that Vail has encouraged fractional fees to operate like hotels is by limiting ownership to twelve (12) owners per unit. The result of this restriction, of course, is that fractional fee owners have access to their unit for at least four (4) weeks out of the yeaz.16 The Town was concerned that with a great number of owners using the property for shorter periods of time, fractional fee properties were more likely to deteriorate due to lack of maintenance and owner attention. A common criticism of traditional timeshares is that with so many estate holders the individual units are not properly maintained. As a result, resort communities have seen timeshaze property values decline, timeshaze estate holders disappeaz, and, eventually, timeshaze projects remain unoccupied for extended periods of time. Mr. Ruther anticipates that the Town's restriction on the number of owners per fractional fee unit may help Vail avoid this fate with respect to fractional fee developments. Note that Vail's code does not regulate any fractional fee projects with fewer than six (6) owners. This will likely encourage small-scale fractional fee projects that aze more akin to traditional ownership projects. to According to Mr. Ruther, ownership time-spans generally run about five (5) weeks per year. g47424.wpd / 90782.OOI 34 Aspen Fractional Fees•March 2001 ,.,~ ~.~ ~,, The third critical component in Vail's regulation of fractional fees is its requirement that fractional fee clubs maintain at least as many accommodation units as fractional fee units. Furthermore, by categorizing new fractional fee units as lock-out units the City may enhance the existing inventory of accommodation units available to the short-term visitors. Should the City of Aspen allow fractional fee projects, a provision similaz to Vail's may be appropriate so that fiuther fractional fee development and conversions do not undermine current lodge preservation initiatives. And, finally, Vail included as part of its conditional use review the requirement that a fractional fee club applicant demonstrate an ability to create and maintain a high level of occupancy. This places a reasonable burden on the developer to explain exactly the type of fractional fee project being proposed; specifically, whether the project is more like a hotel or a traditional timeshaze. This sort of information is of particulaz importance at this point in what appears to be a trend in resort development. Although occupancies aze generally higher in the fractional fee project examined in the Town of Vail, there is simply not enough evidence to indicate how long-term occupancies will respond over the long-term. With traditional timeshazes, occupancies deteriorated because the patterns of ownership grew unpredictable. Whether fractional fee ownership will follow suit is simply unknown. In addition to the provisions Vail has adopted, there aze several other techniques that Aspen may consider, should it decide to regulate fractional fee development in the future. Developers may be required to include a monthly break down of anticipated, or historical, occupancy rates for a given type of fractional fee project. Occupancies may be enhanced by rental pools and lock-outs that N47424.wpd /90782.001 35 Aspen Fractional Fces-March 2001 W -~. ®., ...~. would allow a new project to rent in a manner similaz to a hotel." Aspen may consider requiring new projects and fractional fee conversions to design units with lock-out capability. Although the Town of Telluride does not regulate fractional fee units in the manner Vail does, in an effort to preserve its bed base Telluride requires some timeshaze projects, whether fractional fee or otherwise, to restrict occupancies to periods ofless than thirty (30) consecutive days or sixty (60) total days in a calendaz yeaz. Steve Ferris, Telluride Planning Director, views this requirement, enforced by deed restriction, as one that accommodates the shifting demands oftoday's resort market, while protecting the Town's interest in lodge preservation. Again, should the City of Aspen determine that regulation of fractional fee projects is appropriate, deed restrictions of this sort may be useful. The Telluride provisions, including sample deed restriction language, is included as Appendix D to this report. b. Developer Perspective As is mentioned above, Bill Sullivan is one of the developers of Austria House, the first fractional fee project completed in Vail. An interview with Mr. Sullivan provided additional insight into a form of ownership and resort accommodation that remains lazgely a mystery to local governments. Mr. Sullivan describes a fractional fee project as one in which each owner is deeded a fractional interest in a particular unit. Owners then hold, in addition to a fee simple interest, a right to occupy, for a certain number of weeks per year, either the actual unit purchased or another unit of equivalent size. The right of occupancy is not part of the deed but is decided among the pool of '~ Note that developer will resist the "rental pool" concept because if the units become investment tools, various securities laws may apply. g47424.wpd / 90782.001 36 Aspen Fractional Fees-March 2001 ~~ e ,. `..o owners and recorded with the county clerk. Note that unlike traditional timeshare arrangements, though not explicitly precluded, these units aze not "exchangeable" for units in other resort towns. The Austria House has twelve owners per unit, an arrangement that Mr. Sullivan insists on in other projects. When an owner elects not to stay in his or her unit, the unit can be rented out, either to other owners or to a non-owner on a nightly or full-week basis. However, Mr. Sullivan points out, there is no rental pool arrangement at the Austria House. In an effort to keep units full, owners who fail to show up for their allocated time may have to pay a penalty to the homeowners board. On the issue of occupancy, particular over the long-term, Mr. Sullivan commented on two particular points. First, he disfavors Vail's equivalency requirement, favoring instead the ability to maximize density with 100% fractional fee units. Mr. Sullivan believes that fractional free occupancies aze running azotmd 85% annually, versus hotels that run about 20 percentage points lower.18 For this reason, he believes Vail's overall occupancies would be higher if more lodging units were of the fractional fee variety. Additionally, according to Mr. Sullivan, fractional fee owners contribute more to the local economy than do traditional hotel guests. He feels that the loyalty of visitors is a plus for communities that have fractional fee projects, and that fractional fee projects encourage visitor loyalty more than hotels. Also, Mr. Sullivan offered the following to local governments concerned that fractional fee developments will lose viability in the resort market and will experience diminished occupancies in is It is important to note that the occupancy rates offered by Mr. Sullivan and Mr. Ruther of Vail aze estimates and are not the product of an official accounting. X47424.wpd / 90782.001 3 ~ Aspen Frxtional Fees-March 2001 -- „~... .. ~ the long-run. First, as opposed to the relatively low cost of traditional timeshaze estates, fractional fee interests aze selling for approximately $250,000 per owner per unit. According to Mr. Sullivan, with an investment significantly greater than that required for a timeshaze fractional fee owners aze less likely than traditional timeshare interest holders to abandon their interest in the property. In other words, they are vested to a much greater extent than traditional timeshaze interest holders typically have been. And, finally, of the few units that have resold in the Austria House's brief history, all sales represent an appreciation in value. Cleazly, not enough time has passed to determine whether fractional fee units will continue to appreciate. However, as time passes and additional fractional fee projects aze developed, this is precisely the type of information the City of Aspen should maintain and seazch out. 3. Summary As the City of Aspen considers regulating multi-unit fractional fee projects, several land use impacts may be anticipated. Traditional planning concerns, like traffic, pazking, impacts on municipal services, and land use compatibility, will generally mirror impacts associated with traditional hotels and timeshazes. As is pointed out above, the nature of a particulaz fractional fee project will vary depending on the location, the jurisdiction, and customer-demand driving a particulaz project. Some fractional fee projects may include the ability to "lock-out" units and to otherwise rent units on a nightly basis to visitors other than an actual fractional fee owner. Other projects, however, will be oriented towards longer stays of at least a full week. These aze all fact- specific inquiries that the City must consider when assessing the land use impacts of proposed fractional fee projects. Regulations should reflect the fact that, although the form of ownership is A47424.wpd /90782.001 38 Aspen Fractional Fees-March 2001 ~. the same, fractional fee developments and conversions vary from project-to-project, and should be reviewed accordingly. While there is some evidence that fractional fee projects may increase local occupancies, the evidence is faz from conclusive. Regardless, Aspen will likely continue to receive applications for the development of multi-unit fractional fee projects. Short of prohibiting this form of ownership entirely, the City should incorporate provisions that will protect or enhance the local bed base, while simultaneously protecting the chazacter of this unique city. The information set out in this report provides the reader with an up-date of where fractional fee development stands from the point of view of a local government reviewing this new type of development. However, the authors caution the reader that several issues remain unresolved simply because fractional fee projects remain a relatively new product in today's resort mazkets. This section concludes with a list of factors the City of Aspen should consider and monitor as it considers possible regulation of fractional fee projects, in both the single-family and multi-unit context. As more data is available, and as several fractional fee projects in the region develop, the City will be better prepazed to assess the following: 1) long-term ownership trends in fractional fee developments, including turnover rates among owners; 2) occupancy rates on aproject-by-project basis; 3) the manner in which fractional fee developments will impact occupancy rates city-wide; 4) owner profiles and spending habits; and 5) job generation chazacteristics of fractional fee projects, as opposed to hotel, single-family and condos with short-term rentals, and timeshazes involving more than twelve (12) owners. p47424.wpd / 90782.001 39 Aspcn Fractional Fees-March 2001 - ,,.., VI. IMPACTS ON CITY REVENUE 19 Aside from the land use impacts and their effect on the local bed base, conversions from traditional hotels to fractional fee projects may have significant impacts on city revenues. There aze certain fiscal impacts that the City must consider as it assesses the extent to which fractional fee ownership will be allowed or encouraged in the future. There aze three city tax categories relevant here: the property tax, sales tax, and real estate transfer tax. According to the City finance department, fractional fee projects are considered residential uses for tax purposes. As such, conversions to fractional fee ownership from some other commercial uses, specifically accommodations and lodging, may have significant impact on City revenues. Alternatively, conversions of existing detached, residential units or timeshares to fractional fee projects will have very little impact on City revenues since these conversions do not involve a change from or to a commercial use. In order to get anidea ofhow acommercial-to-residential conversion may affect city property tax revenue, consider the conversion of a fictitious 100-room hotel to a 35-unit fractional fee residential building. Such a conversion will impact the amount ofrevenue that accrues to the City by way of the property tax, sales tax, and real estate transfer tax. Note that City revenues will be similarly impacted whether properties are being converted from commercial (hotel) to residential (fractional fee) or whether future development tends towazds fractional fee instead of traditional hotel ownership and use. 19 Information in this section was derived largely from interviews by Freilich, Myler, Leitner 8c Carlisle of Tabitha Miller, Finance Duector for the City of Aspen. R47424.wpd / 90782.OOI 4() Aspcn Fractional Fees-March 2001 _ „~-, . e.d A. The Real Property Property taxes collected on a structure converted from a hotel to a fractional fee arrangement will be less than property taxes collected on the same building prior to the conversion. Currently, the mill levy fora 100-room hotel would be based on a rate of 29% of its market value. For this discussion, assume the 100-room hotel would have a mazket value of about $20,000,000. The millage rate is presently .005401 in the City of Aspen. Under. this scenario, the City would collect approximately $31,325 annually from the fictitious hotel prior to conversion. However, once converted, this same building would be valued as a residential property at 9.74% of its mazket value, and the City could expect its annual revenue to fall to about $18,120 annually. This decline is due to two factors. First, conversions of this nature will likely involve a decline in the number of units on the property. This example assumes a 65% drop: from 100 hotel rooms to 35 individual, fractionalized, residential units. Fractional fee units will generally be of a squaze footage significantly higher than a hotel unit. As such, conversions can be expected to have fewer units of greater floor azea than a typical hotel unit. Although the mazket value of a fractional fee unit will be significantly higher than a hotel unit, the expected decrease in the number of total taxable units on the property leads to a substantial decline in overall revenues. The second factor that leads to declining revenues is that the assessed valuation for residential properties is approximately 1/3 of the valuation for commercial properties, including hotels. Currently, residential units aze taxed at a rate of 9.74%of mazket value, compared to the 29% tax rate applied to commercial properties. Given the likely decrease in total overall units and the residential tax rates that apply to the now-converted fractional fee unit, the City p47424.wpd 190782.001 41 Aspen Fractional Fees•March 2001 ,.~. ,,~. w ..,• can expect significant declines in property tax revenue when such conversions occur. Similaz declines should be anticipated if future additional units aze developed as fractional fee instead ofas traditional hotel units. B. The Sales Tax Direct sales taxes collected from a project will also decline significantly as a result of a conversion from a hotel to a fractional fee arrangement. The City assesses a 4.06% sales tax against each hotel room rented.20 The Aspen Chamber Resort Association estimates annual hotel room occupancy rates to have been about 60% in the yeaz 2000. Assuming an annual average room rate of $210/night,21 the City can expect to collect approximately $186,719.40 in sales tax revenue each year from the fictitious 100-unit hotel. However, once converted to a fractional fee arrangement, this source of sales tax revenue essentially disappeazs for the City. Since the now-converted fractional fee units aze re-categorized asowner-occupied residential property, no sales tax is assessed. It should be noted, however, that some fractional fee ownership properties include a "rental pool," or some other arrangement that would allow the lease of some units for periods of 30 days or less. To the extent a particulaz project provides this service, some sales tax revenue may be 20 Most of this revenue accrues directly to the City, although a small portion actually accrues to Pitkin County and is redirected back to the City of Aspen. Although Pitkin County also collects a separate sales tax, the County provides no significant municipal services to the City and allocates its sales tax revenue to services provided outside of the City of Aspen. Z' Average room rates based on Aspen Central Reservations. #47424.wpd / 90782.OOI 42 Aspen Fractional Fees-March 2001 generated for the City. As is discussed above, the Town of Vail only allows fractional fee projects that include a mix of long-term and short-term occupancies. Besides direct sales tax paid by the project, the conversion or development of fractional fee units may have an effect on indirect sales tax revenue generated from other sources. Although comment on the indirect effect fractional fee projects may have on city-wide sales tax revenue is beyond the scope of this report, if year around occupancies increase due to the development of or i conversion to fractional fee ownership projects, and if spending habits differ22, there may be some increase in other sales tax revenue generated by non-accommodation expenditures. C. The Real Estate Transfer Tax Real estate transfer taxes collected by the City will increase significantly where traditional hotels aze converted to fractional fee residential uses. The City receives approximately I.5% on the sale of all properties in Aspen." These monies do not contribute to Aspen's general operating fund, but instead have been earmazked to fund affordable housing initiatives in the City, as well as the operation of the Wheeler Opera House. Since this tax is not assessed against the lease of individual hotel units, a conversion from a hotel to a fractional fee residential property would generate previously unrealized revenue for the City.24 zz A recent article in Urban Land, for example, claims that fractional fee owners aze more affluent and will stimulate increased sales in the towns in which they are located. See Arthur O. Spaulding, Jr. Hrgh Fractions, p. 62, ULI, August 2000. z3 Note, however, that the first $100,000 of the purchase price is taxed at a rate of only .5%. 24 When a hotel property is sold in fee simple, the real estate transfer tax is assessed against that transaction, as it is against the transfer of any deed. R47424.wpd / 90782.001 43 Aspen Fractional Fees-March 2001 F w I Under the fictional hotel example, the newly-converted, 35-unit fraction fee property would generate approximately $524,000 for the city upon the initial sale of all units. Additionally, the City finance department estimates annual turnover rates for this type of residential unit to be approximately 12% citywide. At that rate, the City could expect approximately $62,000 in additional revenue annually to be available for affordable housing and the Opera House as a result of a conversion of a 100-unit hotel to fractional fee ownership. D. Summary Under current tax policy and under current tax rates, annual property tax revenues would fall from about $31,325.00 generated by the 100-room hotel to about $18,412.09 generated by a 35-unit fractional fee residential use. Most significant, however, would be the loss of sales tax revenue due to the conversion. In the example here, the City's annual revenue of $173,568 generated by hotel room rentals would be essentially eliminated by the conversion to fractionalized ownership. Any declines in the property tax and the sales tax is of particular significance because these sources of revenue fund general city services. However, it may very well be that conversions will attract more affluent visitors causing an increase inspending. If this turns out to be the case, sales tax revenue will be positively affected. On the other hand, the City can expect increases in real estate transfer tax revenue if a property converts from a hotel to a fractional fee arrangement. As is discussed above, at the time of the conversion, significant real estate tax revenues will be collected on all new fractional fee units: in the example used here, approximately $524,000 on a 35-unit fractional fee project. Additional annual revenues stem primarily from turnovers in ownership that the City estimates at a rate of about g47424.wpd / 90782.OOI 44 Aspen Fractional Fees-March 2001 :~ ,,. .~~ 12% per year. However, under the current scheme, real estate tax revenue has been set aside for affordable housing and the Wheeler Opera House. As such, this increase in revenue will not offset the costs of necessary municipal services, but rather will benefit two particulaz, though important, municipal concerns. In sum, the City can expect that conversions to fractional fee, or significant fractional fee development in lieu of traditional hotels, will result in decreased revenue to the City's general fund, and increased revenue set asides for affordable housing and the Wheeler Opera House. At the same time, conversions from timeshaze or detached, residential units to fractional fee ownership will have very little fiscal impact on the City. VII. CONCLUSION Regulation of fractional fees by Aspen is permissible, as long as what Aspen is regulating is the use of the units, not their ownership. Any ordinance should identify the specific land-use impacts which aze intended to be addressed by the regulation. The regulation needs to apply to all multiply-owned or rented units within a building, not simply fractional fees, and should regulate short-term rentals and/or fractional fees in the same manner without regazd to their respective forms of ownership. First and foremost, however, Aspen needs to decide whether the City wants to encourage fractional fees. If so, then regulation is possible, as discussed above. If Aspen adopts an ordinance regulating fractional fees, it needs to monitor the land use and economic/tax revenue impacts on the City in order to ensure that continued regulation is desirable. k47424.wpd /90782.001 4$ Aspen Fractional Fees-March 2001 s' W ..I NO. 4R-'ll AH ORDINANCE OF THE CITY OF REY WEST, FLORIDA, AMENDING CHAPTER V, ARTICLE ZYI OF THE REY WEST LAND DEVELOPMENT REGIILATIONS (LDRS) ENTITLED 'DEFINITIONS' BY AMENDING SECTION 5- 21.2; ADDING SECTION 2-7.21 TO CHAPTER II, ARTICLE VII LDRS IN ORDER TO ESTABLISH GENERAL REGIILATIONS FOR THE TRANSIENT IISE OF A RESIDENTIAL DWELLING, INCLIIDING: PROHIBITIONS; APPLICATION; GENERAL REGIILATIONS; FEES; ENFORCEMENT AND PENALTIES; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL OF INCONSISTENT PROVISIONS; PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the City Commission has determined, upon an examination of the issue and a series of public workshops, that the transient use of residential dwellings has had deleterious consequences in the residential neighborhoods of Key West; and WHEREAS, the City Commission finds that the increase in the conversion of residential dwellings to transient use is, in part, responsible for the affordable housing shortage in Key West, a shortage confirmed in a study of the City by the Shimberg Center of the University of Florida; and WHEREAS, although only 507 residential properties city-wide hold residential dwelling transient licenses (for a total of 906 transient unit uses), the City Commission has been advised that many more, and perhaps as high as 1500 residential units, are put to a transient use at some time in a given year; and - WHEREAS, the City Commission desires to impose a phase-out of certain unlicensed transient ,uses in prohibited zoning districts, in order to address the investment expectations of affected property owners; and 1 APPENDIX A .~, ~., WHEREAS, the City Commission finds that this proposed regulation is consistent with Goals 3-1 and SA-A, and Policies 1- 1.2.1 and 1-2.1.3, of the Comprehensive Plan; and WHEREAS, the City Commission finds that this proposed regulation is consistent with the Principles for Guiding Development, Section 28-36.003 (1)(a); and WHEREAS, the City Commission is required under Chapter 163, Florida Statutes, to enact a complete set of Land Development Regulations (LDRs); and WHEREAS, the City Commission finds that regulations prohibiting unlicensed transient uses of residential dwellings will serve to promote the health, safety and welfare of the citizens of Key West; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF KEY WEST, FLORIDA: Section 1: That Chapter V, Article XXI, Section 5-21.2 of the Land Development Regulation is hereby amended as follows*: sec. 5-21.2 Definition of terms. Transient Living Accommodations.- Or Transient L•oda~na. Any unit, group of units, dwelling, building, or group of buildings within a single complex of buildings, which is 1) rented for ~ period or periods of less than 30 days or 1 calendar month, *(Coding with respect to Section 5-21.2 only: Added language is underlined; deleted language is .) 2 w.~, whichever is less; or which is 2) advertised or held out to the public as a place regu~arlp rented to transients.-.regard o h occurrence of an a tat n at G, h a hors-4-crm ,-P.,tal nao of ~ wi hin a single family dwelling, a two amity dwelling o a m,l i- Section 2. That Chapter II, Article VII, Section 2-7.21 is hereby added to the Land Development Regulations as follows: Bec. 2-7.21 Transient Living Accommodations in Residential Dwellings - Regulations. A. Intent. These regulations apply only to the transient use of residential. dwellings. In 1986, the City enacted former zoning code Section 35.24(44) which provided the following definition of a transient living accommodation: "Commercially operated housing principally available to short-term visitors for less than twenty- eight (28) days.' (This definition shall hereinafter be referred to as the "Former Transient Definition.") Some property owners and developers interpreted the Former Transient Definition to mean that an owner could rent his or her residential dwelling for less than half the year without the dwelling losing its residential status, and therefore without the need for a City-issued transient license (so long as State of Florida licensing requirements='were met). This interpretation went unchallenged by the City. Three ._ categories of transient use of residential dwellings resulted: (1) some owners obtained a transient license allowing unrestricted transient use; (2) some owners followed the Former Transient 3 .~~,, -w .ter x Definition and, accordingly, rented their properties less than half the year; and (3) some owners put their residences to a transient use without City or State license and without regard to existing regulations. In addition, many residential dwelling owners never put their properties to a transient use and they no longer have the opportunity to do so under the City's current Rate of Growth Ordinance. The City Commission finds that short-term or transient rentals affect the character and stability of a residential neighborhood. The home and its intrinsic influences are the foundation of good citizenship; although short-term tenants no doubt are good citizens generally, they do not ordinarily contribute to activities that strengthen a community. Therefore, the City of Key West intends by these regulations to establish a uniform definition of transient living accommodations, and to halt the use of residences for transient purposes in order to preserve the residential character of neighborhoods. The City has provided only a brief phase-out period in recognition that in many instances investment expectations have already been met either through rental income or rising market value. Finally, certain guest houses currently hold a number of the City's category 10C occupational license which denoted transient use of a residential property. The City intends to develop a uniform quest house occupational license category, and then to re- designate all lOC licenses held by guest houses accordingly. 4 ~ ~ s B. unlicensed Residential Transient Dse - Prohibition. All unlicensed transient use of residential dwellings shall terminate after thirty (30) days from the effective date of this Section 2-7.21; provided, however, that properties subject to Development Agreement executed by the City of Key West may continue such transient use as allowed under that Development Agreement until the expiration of the Development Agreement. C. Application. The holder of an occupational license allowing residential transient use must annually provide or comply with the following information: 1. The complete street address and RE number of the property. Z. ~ Proof of ownership, including the name, address and phone number of each person or entity with an ownership interest in the property. 3. An approved inspection report of the Fire Marshall verifying compliance with the Fire Marshall's criteria for a residential dwelling transient lodging use. 4. The gross square footage of the property, including the number of rooms, bedrooms, kitchens and on-site parking spaces attributable to transient lodging use. 5. A valid and current federal employer tax identification number (or social security• number) for the owner(s) of the property. 5 ,.: ... ..,.. 6. A valid and current Florida Department of Revenue sales tax identification number under Chapter 212, Florida Statutes, and a valid and current license under Chapter 509, Florida Statutes. 7. The name, address and 24-hour .phone number of the person who will be operating the property's transient accommodations. 8. The application shall bear the signatures of all owners, authorized agents and authorized property managers. D. General Regulations. The following regulations shall pertain to transient lodging use of or within a residential dwelling. 1. Except as provided herein, each residential property where transient lodging use is in effect shall prominently display on the outside of the property a medallion alerting the public of the transient use. The medallion and instructions for its posting shall be issued by the Licensing Division. 2. A contact person must be available 24-hours per day, seven days per week for the purpose of responding promptly to complaints regarding the conduct. of the occupants of the residential dwelling transient lodging. The name and phone number of the contact person must be posted on exterior of the dwelling in a place accessible to the public. 3. As a condition of application approval, the Fire Marshall shall conduct an inspection of each dwelling unit and issue to the applicant written approval. based on applicable Life Safety criteria. 6 _ ,~, ... ~ 4. Occupancy of individual units shall conform to the occupancy limits of the Standard Building Code. 5. The owner or manager shall maintain a tenant and vehicle registration which shall include the name and address of each unit's tenant, and the make, year and taq number of the tenant's vehicle. 6. Parking. The owner shall provide one off-street parking space per residential dwelling transient lodging unit, except where the unit is in the City's Historic District; provided, however, that the owner or manager must instruct all tenants of the Historic District's residential parking program and if the vehicle is not eligible to park on the street, then the owner or manager shall ensure that the tenant is directed to a lawful and appropriate parking space. 7. There shall be a written lease between a residential dwelling owner and a tenant, and it shall contain the tenant's agreement to the regulations contained in this Section 2-7.21. 8. It shall be a violation of these regulations to enter into a long-term lease with a mutual intent to subvert the regulatory goals of this Section 2-7.21. It shall also be a violation of these regulations. for a property owner to lease space to "roommates' for a period of less than 30 days or 1 calendar month when not licensed as provided hereunder. For the purposes of enforcement, a rebuttable presumption shall exist that roommates use a common entrance to a dwelling. 7 ~~, ...~ 9. It shall be unlawful for any owner, tenant, broker, realtor, agent or other representative of the owners to hold out or advertise a residential dwelling for transient rental if the property is not permitted; as provided hereunder. A broker or realtor who is found in violation of this regulation shall be subject to occupational license revocation. 10. Nothing in this Section 2-7.21 is intended to exclude the application of any ordinance of the City of Key West. E. Fees; Application Schedule. 1. A person or entity who holds a transient rental occupational license shall pay the customary annual occupational license fee, plus an annual inspection and enforcement fee of $125.00 upon the filing of the application set forth in subsection C. 2. Fee revenues raised under this Section 2-7.21 shall be used to fund a position in the Code Enforcement Division, and to provide enforcement and processing personnel as needed. The officer holding this position shall have as his or her primary responsibility the enforcement of the terms and conditions of this ordinance, and other City regulations relating to the transient use of properties. 3. For a period of ninety (90) days after the effective date of this ordinance, the Licensing Division will receive initial applications pursuant to Section C., and related fees. There shall be a $25.00 per dwelling unit late fee payable to the City upon application filing. In all subsequent years after the initial 8 ..., ~~. application, annual processing fees shall be paid at the same time as the occupational license. The City Manager may determine to pro-rate the initial processing fee. F. Enforcement; penalties. A violation of this section 2-7.21 shall be punishable as a misdemeanor and by a fine of up to Five Hundred Dollars ($500.00) per day, per unit, per violation. The Code Enforcement Division may also enforce the terms of this Ordinance by bringing a case to the Code Enforcement Special Master pursuant to its authority under law and ordinance. In addition, any license or permission granted hereunder may be revoked for cause, upon notice and opportunity to be heard, by the City Commission. In addition to any other remedy available to the City of Key West, the City or any adversely affected party may enforce the terms of this ordinance in law or equity. Any citizen of Key West may seek injunctive relief in a court of competent jurisdiction to prevent a violation of this section 2-7.21. The City, by and through its code enforcement division, may apply for an administrative search warrant to enter upon the premises of any residence subject to this ordinance. Section 3. If any section, provision, clause, phrase, or application of this Ordinance is held invalid or unconstitutional for any reason by any court of competent jurisdiction, the remaining provisions of this Ordinance shall be deemed severable therefrom and shall be construed as reasonable and necessary to achieve the lawful purposes of this Ordinance. 9 ~,,• Section 4. All Ordinances or parts of Ordinances of said City - in conflict with the provisions of this Ordinance are hereby superseded to the extent of such conflict. Section 5. This Ordinance shall go into effect immediately upon its passage and adoption and authentication by the signature of the presiding officer and the Clerk of the Commission. Read and passed on first reading at a regular meeting held this ZO day of October 1998. Read and passed on second reading at a regular meeting held this lnrh day of xnv>:nrx>:u , 1998. Jf~~.i ~.i ..A fit.: ...i ,a: -.F a.v..-7 ~r_-innn}nR~~elr7 c~ ' • Authenticated by the presiding officer and Clerk of the Commission on tnrh day of NoyF.MRAR , 1998• Filed with the Clerk Nnv>;rrnFe t a ~ 1998 • / of SHEILA K. MULLINS, 10 ~„, ... § 197-48.7 WESTHAMP'YON BEACIi CODE § 197-49 f § 197-48.7. Vending machines as accessory uses is B-2 and B-3 Districts. [Added 2-142000 by L.L. No. 1-2000] Vending machines dispensing ice, beverages and similar goods may be permitted as outdoor aarssory uses in the B-2 and B-3 Districts, Provided that such machines or equipment do not exceed 25 square feet. Night lighting or internal lighting connected with such machinery shall be prohibited. § 197.48.8. Animal shelters; aviaries; kennels, veterinary services. [Added 2-142000 by LS.. No.1-2000] The minimum setback for a structure containing any of the above-captioned .uses shall be no less than 100 feet firom any residential zoning district. ARTICLE V Multiple Occupancy of Oae- and Two-Family Dwellings `,r w.... ^~~ w:.s„~,;,;a~~+~.~,~..a [Added 5-18-1968; amended 1-16-1981 by L.L. No.1-1981; ice, 6-12-1981 by L.L. No. 11-1981; 10-12-1984 by L.L. No. 10-1984; 411-1986 by L.L. No. 41986; 2-8-1991 by L.L. No. 41991] § 197-49. Legislative findings. A The summer occupancy of residential dwelling units by groups of unrelated individuals (commonly referred to as 'group rentals") has increased substantially in recent years. This situation is the result, in part, of the active solicitation, in the newspapers and otherwise, for individuals to become part of a group rental Each member of a group rental purchases a share or Part share in the residence, which entitles that individual to use the residence at specified times. The number of individuals using residences on any one wee]cead in many instances ezceeds 15. - :.,, _ . ,.. ) _ , 19774:4 .. _ :. , ~-io-.tooo _. APP,ENbIX' B ~ - =ROM : LA-IB BUILDING DEPHR'^"'VT FFlX IJO. : Feb. 27 2001 09:59RM Pl i l § 197-49 ZCNIIIG § 19750 B. Overcrowding in residential dweIIings is hazardous, unsafe and unsanitary and interferes with the interest of the public and the quality of life is the total community environment, and it is not in conformance with acceptable building codes, fire codes, occupancy standards sad this Zoning Chapter. These . noneonformities era detrimental to the health, safety and general welfare of the iahabitantr of the Village of Westhampton Beach. C_ The use of residential dwellings by large group rentals causes problems of avererowding, ezcessively high levels of vehicular tza$re, ezcessrve numbers of vehicles being parised on the property or adjacent streets, high levels of noise which often accompany large numbers of people and an increased intensity of use of the property, causing the overburdening of Enclitics serving the public health, safety and welfare. ~,c;;tiw:•- D. The problems assodated with large group rentals are incompatible with the primary uses permitted in residential districts, i.e., residential dweIling, sad such uses not only have detrimental effects upon the zesidential character of these districs but create the same health. safety and aesthetic problems which these districts are intended to eliminate. The Board of Trustees also finds that is the bosiae:s districts the intensity of use of the residential dwellings therein has increased beyond that which they eaa reasoaabIy accommodate. 1;. It is therefore far the purpose of ensuing the watinuing integrity of the residential distrida and decreasing the density within the business districts that the following provisions are adapted. § 197-50. Definitions • As need in this article, the following terms shall have the meanings indicated: 19774.5 4-to-zooo -120M WHH HU I LD I NG DEPRRT °JT FWC h10. : Feb. 27 2001 09: 59RM P2 § 197-50 WESTHAMPTON BEACH CODE § 197-50 ADULT - A person who has attained the age of 18 DWELLING iJNIT-The definition of `dwelling unit" set forth is § 197-1 of this Code shall apply. (Amended 12-14-1998 by L.L. No. 10-1998] FAMD.Y: A. Any number of persons occupying a single nonprofit dwelling unit,. related by blood, marriage or legal adoption, ]wing and cooloag together as a single housekeeping Wait. 8. Any number of persons occupying a single nonprofit dwelling unit, not exceeding six adults living and cooking together as a single housekeeping wait where all were not related by blood, marriage or legal adoption. (Cont'd on page 19775) rvAD.M'"'• 19774.6 +_io_aioo 'ROM 41FiB BUILDING DEPFlRTf ~T y FfiX NO. § I97ti50 C. D. ~~ Feb. 27 2001 09:59FlM P3 ~ _.J ZONING § 197-50 Notwithstanding the ptoviamns of 3ubeection B of this de5nition. a group of unrelated persons numbering more than six (6) shall be considered a 'family" upon a determination by the Zocting Board of Appeals that the group is the functoona] equivalent of a familyy pursuant to the standards enumerated in Subsection E herein. This presumption may be rebutted, and the nonrelated individuals may be eansidered the functional equivalent of a YamillJ' far the ptttpasea of this Article bq the Zoning Board of Appeak if such group of individuals exhibits one (1) or more characteristic mrt9stent with the pttrpases of toning restrictions in residential districts. In determining whether a group of more than six (6) unrelated pe:soru Mutes a Yamily" for the purpose of aecupymg a dwelling unik as provided for in Subsection C of this definition. the Zoning Boatd of Appeals shall utilize the sta*~>~ enumerated in Subsection E in making said determination. Before making a determina- tion under this subsection, the Zoning Board of APPe~ sha)1 hold a pabGc hearing, after pablie notice Said apP]irstion shall be on a farm provided by the Zoning Board of Appeak, accompanied by the appropriate fee. & In making a detettninatian under Subsection D, the Zoning Board of Appeals shall find that (1) The group is are which in theory. size. appearance and structure. rasernbles a traditional farm'ly unit. (2) The gtoap is one which an'Il live and cook together as a single housekeeping unit. (3) The group a of a permanent nature and is neither a framework for transient or seasonal living nor merely as association or relationship which is transient ~ seasonal in nature. Nothing herein shall preclude the seasonal me of a dwelling unit by a group which otherwise meets the standards of this subsection aL it9 permanent residence. 19775 :-rs-st }- i i t 'ROM I:kiB BUILDING DEPRRTR'"'~T FFlX NO. : '" "^ Feb. 27 2001 10: 00RM P4 .,. ,W v .,~:... 3 197-50 • ~~N BEACH CODE 319'x-50 (4) In rw rsae shall a dwelling be occupied by mare than two (2) adults to a conventional bedroom (5) ~) Other iEQ1IIPam9[115~ ~l Aq ietnll`~4 9~Ia)) bA complied with. (6) Aay detersninarion under this subaectioa shall be limited to the status of a particular SAP as a 'Yams' and shall not be interpreted as authorizing any other nse. occupancy or activity. (?) In malong say such determination, the Board of Appeals may impose such conditions and safeguards as the Board of Appeals shall deem ner~ssary or advisable is order to ~t~~t dit~and ~, ~ ~ neighbor the blic health. safety and welfare. F, '~ applicant shall marl written notice of the date, time and place of the hearing by ~~ certified or registered mail, retms receipt requested to every ProP~Y Owner, as shmvn on the curreat t~ of Westhampton Beach ~tnerrt rolls, within the area immediately adjacent and directly OPPOSE ~~tO ~ a distance of two hundred (200) feet from ttie perimeter of the property. G. Persons OccuPyirig ~P such as a dormitory. fraternity or sorority hawse or s ae Irg•y shall not be considered a 'family." pCCUPANCY PERMIT - A permit issued for the »se or ooeapaac9 of a one- or two-hmily re9dentral dwelling as a summer rental. SUMMER -The period from May 1 m Septem~ 30 of Pack y~• - . Si7MMER RENTAL - An agreement which is either oral or in wilting whereby during the summer or way Part thereof a one- or two-izuru'ly residential dwelling or any Dart of said dwdling is leased. used ar Occupied by One (1J ar more adults 19T76 6 • !5 -!1 I FROM tkiB BUILDING DEPRRT IT FFlX NO. : Feb. 27 2001 10:01RM PS § 197-50 ZONLYG § 197-52 for which the owner receives rnmpensation directly or indirectly. If the dwelling unit is leased to both related and unrelated persons, each anrelated person over the age of 18 years shall constitute a separate adult. TENANT - Aa adult who leases, uses or occupies a seasonal rental dwelling unit. 4 197-51. Permission required. No residential dwelling shall be used or occupied as a summer rental unless as occupancy permit has been issued therefor. An occupancy permit may not be issued to any group of individuals which is not a family or the functional equivalent thereof as defined is § 197-50. § 197-52. AppIicstion for occupancy permit A The owner of a summer rental shall file an application "'"""'" for an occupancy permit with the Zoning Inspector or Building Inspector on or before Apri125 of each year. B. Ia the event that the agreement for summer rental is entered into subsequent to April ti, the spplication for an occupancy permit shall he filed by the owner within 10 days of the ezecution of a written lease, or within 10 days of the date it is agreed to if oral- C. The application shaII be sued by the owner and each adult member of a summer rental and shall contain the following (1) The names and permanent addresses of the owner and each adult member of the summer rental (2) The name and the address of the real estate broker, if any. - (3) The location of the summer retItal, including the Suffolk County Taa Map parcel number. (4) The number of tenants requested. 1977 r i -is- se =ROM tJFiB BUILDING DEPRRTM "`NT FFlX N0. : ~'""* Feb. 27 2001 10:01HM P6 § 197-52 WESTFiAMPTON BEACH CODE § 19?-52 (5) The number and size of each canventio~nal B ~mB cad a Soor plan if requested by Inspector. As used herein, a "wnv~ tiol~ bedroo m is a room designed principally such as dent, living Rooms having other purposes, rooms, hallways or porches, are not to be construed as a conventional bedroom. (6) A f„uy execated contract with s refuse carter doing business in the Village of Westhampton Beach for the respective summer providing for refine pickup at least once weekly at the subject residence during said summer. For good cause, this provision, on written application to the Mayor, may be waived by written instrument only. (7) The period of the proposed occupancy. D- A summer rental permit shall~is~ed~eY ~~ ~. Inspector or Building IasP complies with all the provisions of this section. E- There shall be a filing fee to be determined by the Board ,,~ of Trustees for each application for a summer rental permit. („Amended 10-8-1997 by LL. No. 15.1997] F. The summer rental permit shall expire oa the last day of the rental period as stated in the application. G. Sommer rental applications may not be released to the public and are ezempt from the New York State Freedom of Information Acts is any local laws implementing said statute. H_ No summer rentals shall be leased, occupied or used by nay tenant who is not listed as such oa the summer rectal applicetion. Where there is a change in the individual tenants who wBl be leasing, o~PYmE on using the dwelling unit, the group rental aPP shall be amended to indicate the name of the new tenant 3 pd:eot+eHote See.4tide i e[ ~Le ~~ Od;ues L`' 4 i i i i 19778 +-u-9s FROM WHB EU[LDING DEF'W2T' IT FFlX ND. : ' Fcb. 27 2001 1O:O2RM P7 e.~ § 197-52 ZONING § 197-53.1 a before the new tenant may ocwpy the dwelling unit. There shall be a filing fee, as determined by the Board of Trustees, for each amended application. (Amended i 10.8-1997 by LL. No. 13-1997) I. The selling of shares to tenants where they obtain the rights of use and occupancy in a dwelling unit oa a transient basis shall be prohibited. The rest or ! compensation paid For a summer rental shall not be ! shared by more than the permitted number of tenants. i J. Every permit issued under this x~tion shall at ell times ~ be kept on the premises and displayed in a conspicuous place thereat sash that it is at all times subject to the inspection of any officer, inspector ar representative of ~ the Board of Trustees of the villag=e. § 19'!•53. Violations. ~ A. Failure to comply with any section contained in this Article constitutes a violation of this Article. If an occupancy permit is revoked, it shall be unlawful for any f -"~"`"'"~. person other then the owner to use or occupy the one- or ' two-family residential dwelling. B. It shall be a violation of this Article if an application is ': not 51ed and a proper permit obtained. ' C. Each violation of this Article shall constitute a separate } # and distinct offense. P D. In addition to any other remedy avarlable, if, after a permit has beffi issued, there is a violation of this Article which is not corrected within 10 days after notice of violation has been served, the permit shall be revoked by ~ the Zoning Inspector or Bwldiag Inspector. ` 1 § 191-53.1. Parking. lAdded 6-13-1994 by I_I,. No. 7-1994) ~ . The following provisions shall apply to any one- or two-family r dwelling ntlized as a summer rental: j 19778.1 i _ 1; _ se FROM WiH BUILDING DEPPo~~ ANT FRX N0. Feb. 27 2001 10:02AM P8 4 / § 197-53.1 WESTHAMPTON BEACH CODE $197-55 A The number of motor vehicles permitted to be parked on the premises between the hours of 1:00 a.m. and 6:00 a.m. shall not exceed oaa motor vehicle for each conventional bedroom, plus one additional motor vehicle. B. If motor vehicles are parked on the premises between the hours of 1:00 a.m. cad 6:00 am. it shall be presumed that the dwelling was used and occupied during said hours by at least one person for each motor vehicle so pazked. C. If motor vehicles aze parked on the premises between the hours of 1:00 a.m. and 6:00 a.m. it shall be presumed that the dwelling was used and occupied during said hours by the owner of each vehicle so parked or by e person related by blood, marriage or legal adoption to the owner of each vehicle so parked. D. It shall be presumed to be of a violation of this section if j mare than the permitted nnmber of motor vehicles are ! pazked on the premises between the hours of 1:00 a.m. I cad 6:00 a.m. ~..... ~ .-._ x...~ 4 197-s4. Service of notice to agent, owner or tenant x111 notices of refusal, violation or revocation to be sent pursuant to this Article shall be served upon the agent, if any, or owner or tenant by certified mail, at the address set forth in the application or written se~zeemeat. 3 197~55. Enforcement. A. Any eaforeemeat officer shall be authorized to enforce the provisions of this article. (Amended 8-8-1997 by I.I.. No. 9.1997] B. Aa enforcement officer is authorized to make or cause to be made inspections to dr*<,,.,;.,e the compliance of dwelling units with this article and to safeguard the i health, safety and welfarx of the public. The enforcement 19778? i _ u _ sa FROM :.4MB BUILDING DEPAR''^~JT FAX N0. : ~` Feb. 27 2001 10:02RM P9 § 197-55 ZONING § 197-56 officer is authorized to enter, upon the consent of the owner, tenant or lessee, any premises Eor the purpose of performing his duties under this article. C. Aa enforcement officer is authorized to make application for the issuance of a search warrant in order to conduct an inspection of any prp*++~ covered by this stride where the owner, tenant or lessee refuses or fails to allow as inspection of his premises sad where there is reasonable cause to believe that a violation of this article has occurred. The application far a search warrant shall is all respects comply with the applicable Laws of the State of New York. D. Nothing in this section shall be deemed to authorize an enforcement officer to conduct an inspection of any premises subject to this section without the consent of the owner, tenant or lessee of the premises or without a warrant duly issued by an appropriate court. § 19756. Penalties for offenses. Violations of this section shall be subject to dull penalties and proceedings enumerated as follows: A. Where authorized by a duly adopted resolution of the Village Hoard of Trustees, the Village Attorney shall bring and maintain a civil proceeding, in the name of the village is the Supreme Court of the State of New York to permanently enjoin the person or persons eondutinn„ maintaining or permitting any violation of this Article from further conducting, maintaining or permitting said violation. The owner and lessor of the residence wherein the violation is conducted, maintained or permitted shall be made defendams in the action, sad the tenant ar tenants of such residence liltewise may 6e enjoined as defendants in the action. (1) The person who is listed as the owner apon the seasonal rental permit application shall be presumed to be the owner thereof. 19778.3 i - rs - ee FROM :. LIHB BUILDING DEPRRT°" °°JT F WC N0. : '" `+ Feb. 27 2001 10: 03RM P 10 „ o . r § 197-56 wESTHA,~'PON BEACH CODE § 197-60 (2) If, upon the trial of an action under this article or upon a motion for summary judgment is an action Hader this article, a finding is made that the defendants or any of them have rnndueted, maintained or permitted a violation of this section, a penalty to be included in the jadgment may be awarded at the discretion of the court in an amount not to exceed E250 for each day it is found that the defendants or any aae of them individually conducted, maintained or permitted the violation. Upon recovery, such penalty shall be paid into the general toad ofthe village. B. The Village Attorney, as special prosecutor for the village, may prosecute any and all violations of this Article is the local Village Justice Court, and if any oz all defendants are found is violation of this article, they will be subject to the penalties set forth is § 1973 of the Village Cade. §§ 197-57 tbrotsgh 197-58. (Reserved) ARTICLE VI AdnuaistraHoa § 197w9. Enforcement. (,~lmeaded 6-11-1976 by L.L No. 2-1976; 8.8.1997 by LS. No. 9-1997] This chapter shaII be enfozced by any enforrement ol~cer, as defined in § 197-1. § 197-60. Conditions for insnlag building permits. [Amended 6-11-1976 by L.I.. No. 3-1976] No building permit shall be issued eacept when the provisions of this chapter have bees complied with and there has been presented to the Zoning Inspector evidence of approval 19778.4 t-u_u Document http://nfo.datamgt.corn/sd4/om_isap...&record={22FE} &softpage=Document42 C. Elevators. D. Common hallways. E. Common lobbies. F. Common restrooms. G. Areas designed and used for pazking. H. Areas designed and used as storage which do not have drrect access to an individual office or retail store, not to exceed five percent (5%) of the total proposed net floor azea for office and not to exceed eight percent (8%) of the total proposed net floor azea for retail. Common azeas aze spaces for which all tenants in the building contribute towazd the upkeep and maintenance thereof and aze not used for employee working azeas. FLOOR AREA, SEATING (Used Only For Calculating Pazking Requirements): The floor azea within the enclosing walls of a business or structure that is devoted to the seating of guests for dining or meeting purposes, exclusive of lobbies, preconvene azeas and kitchen factlities. FRACTIONAL FEE: A tenancy in common interest in improved real property, including condominiums, created or held by person, partnerships, corporations, or joint ventures or similaz entities, wherein the tenants in common have formerly arranged by oral or written agreement or understanding, either recorded or unrecorded, allowing for the use and occupancy of the property by one or more cotenants to the exclusion of one or more cotenants during any period, whether annually reoccurring or not which is binding upon any assignee or future owner of a fractional fee interest or if such agreement continues to be in any way binding or effective upon any cotenant for the sale of any interest in the property. FRACTIONAL FEE CLUB: A fractional fee project in which each condominium unit, pursuant to recorded project documentation as approved by the town of Vail, has no fewer than six (6) and no more than twelve (12) owners per unit and whose use is established by a reservation system. Each of the fractional fee club units aze made available for short-term rental in a managed program when not in use by the club members. The project is managed on-site with a front desk operating twenty four (24) hours a day, seven ('n days a week providing reservation and registration capabilities. The project shall include or be proximate to transportation, retail shops, eating and drinking establishments, and recreation facilities. FRACTIONAL FEE CLUB UNIT: A condominium unit in a fractional fee club described as such in the project documentation and not an accommodation unit within the fractional fee club. GRADE, EXISTING: The existing grade shall be the existing or natural topography of a site prior to construction. GRADE, FINISHED: The finished grade shall be the grade proposed upon completion of a project. HABITABLE: Any azea designed for sleeping, living, cooking, dining, meeting or creation as applied to floor area. HEIGHT: The distance measured vertically from any point on a proposed or existing roof or eaves to the existing or finished grade (whichever is more restrictive) located directly below said point of the roof or eaves. Within any building footprint, height shall be measured vertically from any point on a proposed or existing roof to the existing grade directly below said point on a proposed or existing roof. HOME OCCUPATION: A use conducted entirely within a dwelling which is incidental and secondary to the use of the dwelling for dwelling purposes and which does not change the residential character thereof. APPENDIX C of 4 01/102001 11:57 AM nocuinent http://nfo.datamgt.com/sd4/om_isap...&record={ID79}&softpage=Document42 ~~ 8. Time-Shaze Estate, Fractional Fee, Fractional Fee Club, Or Time-Shaze License Proposal: Prior to the approval of a conditional use permit for atime-shaze estate, fractional fee, fractional fee club, or time-shaze license proposal, the following shall be considered: a. If the proposal for a fractional fee club is a redevelopment of an existing facility, the fractional fee club shall maintain an equivalency of accommodation units as aze presently existing. Equivalency shall be maintained either by an equal number of units or by square footage. If the proposal is a new development, it shall provide at least as much accommodation unit gross residential floor azea (GRFA) as fractional fee club unit gross residential floor azea (GRFA). b. Lock-off units and lock-off unit squaze footage shall not be included in the calculation when determining the equivalency of existing accommodation units or equivalency of existing square footage. c. The ability of the proposed project to create and maintain a high level of occupancy. d. Employee housing units may be required as part of any new or redevelopment fractional fee club project requesting density over that allowed by Zoning. The number of employee housing units required will be consistent with employee impacts that aze expected as a result of the project. e. The applicant shall submit to the Town a list of all owners of existing units within the project or building; and written statements from one hundred percent (100%) of the owners of existing units indicating their approval, without condition, of the proposed fractional fee club. No written approval shall be valid if it was signed by the owner more than sixty (60) days prior to the date of filing the application for a conditional use. 9. Transportation Businesses: a. All vehicles shall be pazked upon approved parking azeas. b. All vehicles shall be adequately screened from public rights of way and adjacent properties, consisting of landscaping and berms, in combination with walls and fences, where deemed necessary to reduce the deleterious effects of vehicle storage. c. The number, size and location of vehicles permitted to be stored shall be determined by the Planning and Environmental Commission based on the adequacy of the site for vehicle storage. Consideration shall be given to the adequacy of landscaping and other screening methods to prevent impacts to adjacent properties and other commercial and/or residential uses. d. Parking associated with transportation businesses shall not reduce or compromise the parking required for other uses on-site. (Ord. 10(1998) § 11) 12-16-8: PERNIIT APPROVAL AND EFFECT: Approval of a conditional use permit shall lapse and become void if a building permit is not obtained and construction not commenced and diligently pursued toward completion or the usp for which the approval has been granted has not commenced within two (2) years from when the approval becomes final. (Ord. 10(1998) § 10: Ord. 48(1991) § 1: Ord. 16(1978) § 4(d)) 12-16-9: CONFLICTING PROVISIONS: In addition to the conditions which may be prescribed pursuant to this Chapter, a conditional use shall also be subject to all other procedures, permits, and requirements of this and other applicable ordinances and regulations of the Town. In event of any conflict between the provisions of a conditional use permit and any other permit or requirement, the more restrictive provision shall prevail. (Ord. 10(1998) § 10: Ord. 8(1973) § 18.900) _~, 01/102001 12:14 PM .... ......... ........... L~ ..,~ ~ pr,,~ 2,g,,' to Uvncr, on behalf of itself, its heirs, / dtsin to sn restrict dzc use of the Project. ~~ P~17/2000 Pace 2 of d'. , administrators, representatives, successors, and assigns, Ii, A(:RFF.MF.NTS OF~HI% PARTIES. NO~V, 'ftlP:12F:1'ORF,, in consideration of thz agreements, promises and coveaanu contained herein, including the aforementioned recitals which are hen:in incorporated, the Parties hereby agree and covenant as follows: A. RFSTRIC'TTQNS COiY('•F.RMt\G U~CN OF' TAF. PROJECT AS A "13nTEI-"• 1 The Owner agrees and does hereby restr_ct the use of the Projtxt as follows: A_ lltc Project shall be restricted to use as a "hotel" as defimed in the Telluride T.and Use Code in effect at the tithe of approval of the Planned Unit Developmc~tt application, to wit: "Hotel" means a bm7ding for a transient accommadalion use which has a central lobby or lotmgc area provided adjacent to or in connection. with an on•sitc rescrv'ations facility, I3. No person shall be allowed to reside in or occupy a hotel unit for moo; than thirty (30) consxutivc days, or a total of sixty (b0) days in any single calcnder year. C. 11tc Ltnploycc Units, provided that they meet the definition of "Dedicated employes dwelling units" and/or "affardablc housing units" as defined and qualified under the Town of'i'elluridc's i,UC and/or affordable housing guidelines, shall be excluded from this restriction. D. A cutlral lobby or lounge shall be provided within the Project. the Project shall iachtde an onsite ccntrrl check station which shall include night call availability. The Project shall he: served by a reservations facility serving the hotel which shall be manned during normal business hours. ~, "fhc Owner agrees not to undeRake a condomittitan conversiott or subdivision of the Project without the approval of the "Town, which maybe conditioned or withheld by the Town. 3. Tn the event Owner or its successor in into est, should fail to perform or adhcn: to its obligations as set forth hereln, ar fail to mmt specified perfottnance timelines, the Town shall have the following remedies agautst the Owner, or its successor, which remedies against tlu Owner, or its sttcccssor, an: curnulativc and non-exclusive. A. Specific pedoanancc. I3, injunctive relief, botlt mandatory and prohibitory. C. Withdrawal, cancellation or suspension of the Project's development approvals. 1). Injunction prohibidrtg the transfer or sale of any lot created undo the subdivision approval. Page 11 of 14 APPENDIX D w _. 1 11'fV~IGbI YI'I t,~Wtl Ur ItLLUtt1UC rnn nu, y~icoovio ~r._ w ~ ~UOJ VO/lf/LVVV , W~. v .. ~: 1u • U ' Ii. Denial, withholding, or cancellation of any building permit, certificate of occupancy, certificate of appropriatrnws, or any other autharirrtion granted under Titles 15 or ] 8 of tlrc Telluride Municipal Code authorizing or implementing the Project and/or any structuro to be constivctcd therein. 4. 'I'he'I'own agrees to include the 1'ap Pea Reduction in the calculation of Tap Fees for the Project The adjusted balance of'fap Fees which will be due and owing for the Project ("Rcgnired Tap Fee's azc as stated in "Attachment Y" (attaclted hereto and made a part hereof), as may be modified for changes to the plans and specifications for the Project 5. The w~tbin restriction also satisfies a condition of the PUD/Subdivision Approval, requiring the Owner to decd n:strict the hotel unit; within the Project B. MISCRLLANEOCTS_ 1. This Agrcemcat and the Covrnants stated hcreirt may not be modified, released or waived except by written instrument executed by both the Owner and the Town of Telluride, except that the 'fawn reserves the power to rclu-1se the Project from the restrictions established in this covenant and agreement by recording an instnrmcnt specifically authorizing such releases This Agrecmerrl msy only be amended with flee consent of Owner (or its successors in interosi) and the'1 own. 2. Phis Agrocmcnt is binding upon the owner, its successors and assigns for lht benefit of the Town and its successors. This Agreement and the Covwants contained herein shall be recorded with the San Mibvcl Clerk and Recorder and shall constitute covenants rttrun+*nirg with the land. 3. 1n the event of any action, proceeding or litigation between the Town and the Owner concerning this Agrtc;ment, the prevailing patty shall be entitled to collect its reasonable legal fees and costs, including the reasonable value of salaried attorney's time. Any state court litigation to enforce the terms of .this Agreement shall be commenced in San Miguel County, Colorado and venue shall be restrick;d to such county. 4. The P.uties hereto warrant they aze fully aulhoriiad to execute this Agre~rrent and have taken all actions nccc:ssary to obtain such authorization. Page 12 of 14 Four Peaks 308 South Galena Street Aspen Colorado 81611 970.925.2114 March 1, 2001 Joyce Ohlson, Assistant Director Community Development Department 130 South Galena Street Aspen Colorado 81611 Dear Joyce: Attached are hvo studies showing the positive economic and community impacts to the Aspen community of a "Vacation Ownership" project as compared to a moderately priced, upscale 150aoom hotel at the Grand Aspen Site. These studies were produced by two independent and respected firms in the interval industry, RCI Consulting, Inc. (Richard Ragatz, principal) and Hobson Ferrarini Associates (Steve Ferrarini, principal). Both firms present the compelling nature of our proposal. We believe that the economic benefits that an Interval ownership project presents, as compared to a 150-room moderately priced hotel, are overwhehivng. But we also believe that it is the intangible benefits to the community presented within these reports that warrant your consideration of our proposal. Oux proposal, as currently configured in this conceptual phase, proposes to build 51 two, three and four bedroom units. Each unit will have one or two "lock-off 'units so the total number of "keys" will be approxunately 125. Owners of the Intervals will have the option to use all or part of their units and the operator will have the right to rent out those units or portions of units that are not occupied to the general public. On March 6`h, when we axe before the Planning and Zoning Commission, both Richard Ragatz and Steve Ferraxini will be available to provide additional information and answer any questions that you or the Commission may have. After further consideration we have decided to present to you a plan that houses all 28 of the employees not housed at the Bavarian Inn at the Grand Aspen site. Sincerely, Four Peaks Management, Scott Wntex, Manager T T (~ RCI Consulting EXECUTIVE SUMMARY - March 2001 COMMUNITY ECONOMIC BENEFITS FROM A VACATION OWNERSHIP OFFERING AT THE GRAND ASPEN ASPEN,COLORADO The purpose of this report is to analyze potential economic benefits generated to the City of Aspen by a proposed 51-unit vacation ownership offering at The Grand Aspen development. Wherever possible, comparisons are made with a hypothetical 150-room moderately priced hotel. The term vacation ownership refers to any type of shared ownership of resort property, involving more than one owner per unit, as opposed to whole ownership involving only one owner per unit. The two most important forms of vacation ownership are resort timeshare and fractional interests. It is anticipated The Grand Aspen will be a hybrid of these two products. Vacation ownership is the fastest growing segment of the international tourism and resort hospitality industries -increasing in owners by about 15 percent annually for the last 10 years. Currently, about 3.75 million households own vacation ownership in almost 5,000 resorts. Last yeaz, gross sales volume was over $6.5 billion. Considerable economic benefits are incurred from properly implemented vacation ownership projects, as described in Chapters II and III and the Appendix. It is anticipated that the year-round occupancy rate at The Grand Aspen would be about 87 percent, as compared to only 56.8 percent in the local hotel industry. All 51 units would have alock-off feature, and short-term rental and exchange programs would be available to owners and the general public, functioning just like a hotel. Thus, the 150 room, moderately priced hotel would generate many more vacant room-nights than The Grand Aspen - 23,652 compared to only 3,257. Because units at The Grand Aspen will be larger than hotel rooms, the average number of occupants would be considerably higher. The number ofoccupant-nights/person-days would be 73,770 compared to 62,196 in the hotel. RC! Consul(ing, Ina -Eugene, Oregon 1 Community Economic Benefits: Four Peakr, Mnrch/01 s^ To further demonstrate this particular benefit to the community, the following is a quote from the Planning Director for the Town of Telluride. "The aspect of vacation ownership that we find beneficial ro the community is that it addresses our desire to have a larger bed base. While the vacation ownership projects in Tella~ride sell usage time to owners, thev also offer units for short-teen rentals when they are not being occupied by their owners. Like Aspen, Telluride has numerous condos bought as second homes that sit empty the majority of the year. These condos add nothing to our rental bed bnse, while vacation ownership properties do if terms of sale are structured appropriately. " Research repeatedly shows that vacation ownership owners spend 18 to 22 percent or more on consumer expenditures while in the local community than do hotel guests. It is estimated that such expenditures would annually be about $9.6 million compared to $6.2 million. Economic impact theory shows that for every $1 spent in a community, another $1.35 of consumer expenditures are generated elsewhere in the community. This is referred to as the "multiplier effect." When including the "multiplier effect," these expenditure figures increase to $22.5 million from The Grand Aspen compared to $14.6 million from the hotel. The Grand Aspen would generate about 64 employees compared to about 82 at the hotel. When including consumer expenditures by occupants and employees, and both direct and induced expenditures, the totals would be about $26.0 million from The Grand Aspen compared to $18.5 million from the hotel. Annual Sales Tax generated by The Grand Aspen (including both from occupants and employees and from direct and induced expenditures) would be about $457,040 from The Grand Aspen versus $314,091 from the hotel. However, the annual Lodging Tax would be greater at the hotel - $174,149 compared to $71,774. When combining these two taxes on an annual basis, the 51-unit vacation ownership project would generate about $40,574 more than the 150-room hotel. When including additional Sales Tax collected from appropriate maintenance fees, and more importantly, by the Real Estate Transfer Tax, during the first three years of operation (i.e., the sell-out period), The Grand Aspen should generate another $86,560 in Sales Tax and $650,250 in Real Estate Transfer Tax. RC/ Consulting, Inc. -Eugene, Oregon 11 Community Economic Benefits: Four Penks, Mnrch/0! .~, a..- Over a 10-year period therefore, The Grand Aspen would generate about $1,055,630 more in taxes for the City of Aspen than would a 150-room moderately priced hotel. The totals would be $5,938,030 compared to $4,882,400, or a 21.6 percent differential. During this 10-year period, The Grand Aspen also would generate: • 115,740 more occupant-nights/person-days • 203,950 fewer vacant room-nights • $75 million more of consumer expenditures In recognition of the many economic advantages of a properly implemented vacation ownership project, community leaders are supporting this type of development. In addition to the quantifiable economic benefits generated by The Grand Aspen to the City of Aspen, a series of other benefits also exist -especially when compazed to a hotel. These include: 1. Greater yeaz-round stability in employment patterns and consumer expenditure patterns due to the significantly higher year-round occupancy rates. Obviously, seasonal unemployment rates would therefore be less, and local merchants and service providers would have to worry less about severe seasonal peaks and declines in their income. 2. Vacation ownership owners feeling more like citizens of Aspen than hotel guests. Due to the feeling of "ownership" and annually spending more days in Aspen than hotel guests, vacation ownership owners probably would better "caze" for the community, e.g., more chazitable contributions, more concern about its appearance, etc. 3. Some vacation ownership owners probably will upgrade to whole ownership over time, thus paying more property taxes, extending the advantages in (2), etc. RCI Consulting, Inc. -Eugene, Oregon Ill Community Economic Benefits: Four Peuks, Mnrch/0l ~,., 4. Less traffic and use ofpublic facilities. Due to their longer average lengths-of- stay, vacation ownership owners typically spend more time in their units, and less time driving around sight-seeing, creating impacts on other facilities such as police and fire protection, etc. 5. Higher repeat visitation patterns. Since "ownership" is attached to the concept, vacation ownership owners tend to return much more frequently over time than do transient renters. This stability lessens the need to always be attracting more tourist flow. 6. General spreading out of the economic benefit across a greater number of providers of goods and services in the community. As visitors stay for longer periods of time and return to Aspen more frequently, they are likely to explore the area and begin to also visit local shops and restaurants more "off the beaten path." RCI Consulting, lnc. -Eugene, Oregon 1V Community Economic Benefits: Four Peoks, Mnrch/0/ 'FROM WRITER ,'•~ FaX tJO. 9709275464 .rw~ Mar. 01 2001 02:38PM P2 V ~r11 Rnsulting _ -__- ~~ a©cnn:¢wla, mc. v a airseio„ ¢r as ~ aa. Biographical Sketch RICHARD L. RAtyATZ, PH.D. 12ICII,UtD L. RAG.1T7, ph.D. is Executive Vice President of RCl Consulting. His academic background includes a)3.A. in Geography (1961), a Master's of City Platning (1963) from the University of California, Berkeley, and a Ph.D. (1969) from Cornell University. He was a mcmbar of Phi I.appa Phi Honor Society. In addition to his consulting activities, he was an Assistant Professor of Rousing and Design at Cornell Utuvcrsity (1966-69), where he taught courses in 1-lousing Market Analysis, For 12 years he was an Associate Professor (1969-74) and Full Professor (197481) of Urban and Regional Planning at the University of Oreb~n where he taught courses hi Housing Marketing Analysis, Housing Planning, and Social Jssues in Planning and Planning "Theory. He was Deptumrent Head firm 1969 to 1974. He waz a member of the American Society of Planning Officials, the American Institute of Planners, and the American [nsdmte of Certified Planners. Ragalz has been very active in the primary trade association representing the xe.sort industry -the American Resort Development Association. He joined ARDA in 1969, the year it 4 was formed. 1n 1987, 1989 and 1995, he was given special awards by ARDA for outstanding contributions to the msort industry. 'fhe 1995 award was Industry Leader of the Year. He also haz been active in the Urban Land institute, having cooperated with that group on a major national study in 1974 on the recreational properties industry, and a member since 1972. His Ph.D. dissertation from Comell in 1969 is recognized as the first national study on vacation homes ever conducted in the United States. The study was updated in 1974 for Uie President's Council on Environmental Quality, in 1977 for the U.S. Forest Service, in 1990 for the National Association of Realtors, and hi 1993 for the American Resort Development Association. Since 1969, he has published more than 50 articles on vacation housing for academic journals and trade magazines. He also has delivered more than 200 speeches on resorts and tourism at conferences held throughout the world. Ragatz has achieved international recognition as the leading nnarket researcher in the resort industry. Ln his present capacity wiUr RCI Consulting and in his former capacity as President of Ragatz Associates, ho has conducted national vacation home consumer surveys in the United States, Canada, the United Kingdom, Mexico, Australia, the Caribbean, Malaysia, and Singapore. He has been involved in more than 1,000 studies in virtually every state and over 50 couniriea. Current and past clients include most major developers and lenders in Urc resort industry. ~; Areas of specialty include market feasibility analysis, consmner and product rese2rch, marketing plans, business plans, economic impact analysis and project evaluation. 767 Willameaa $vq[ oui[c 307 8uge¢e. Oregon 97101 - 341fie6-9335 Fu: 3di-6x6.8142 richard. raga[x0n-lc.rd.com •FROhI WRITF~? ~ FRX IJO. 9709275464 ~..~ Mar. 01 2001 02:39PM P3 RCI CONSULTING, INC. ~, RCI Consnltinei Ilse (formerly Ragatz Associates, Inc.) is a consulting and market research firm that provides services to the resort industry. The firm has conducted over 1,000 studies in 46 states and 40 countries. Clients represent both the private sector (firm small, individually owned companies to intenaational corporations) and the public sector (trots smell rntmiciptllities to national eoveanments)_ thir services include: Market snalyais Project evaluetioo Feasbility anatysia In,~ analysis Cotuuraer and product research Financial analysis Strategy pianain8 Marketing Plana In addition to httttdreds of contracts for irrdividtlal clients, the firm's background in the ttSOrt industry 13 demonstrated through the conduct of several landmark studies, including: • National end regional studies of the resort tfmasluuc industries in the United States (1995 and 1997), Asia (1999), Canal (1993), California (1992). Hawaii (1992), Mexico (1993 and 1998J, Puerto Vallata (1993 and I998~ Canctm (1995 and 1998), Acapulco (1995 and 1998), rxlapa (1995 and 1998), Mazatlatt (1998), Matizaaillo (1998), La CabrB (1998), the Canary Iatands (1995), and the Caribbean (1994 and 1999}, including supply and demand characteristics aM ecotgmie impacts. • ANY cotap~hensive netioml survey in last Zo years to detaminc the total nraatrer of U.S. recreational property owners and characteristics of theft properties. ltteluded national poll to determine interest in recreational property amongnon-ewners (1990); updated in 1993 and 1995. ~' • First ttuiooal survey of resort Nmesharo buyers io the UNted States (1978)i updated in ] 980, 1982, I983, 1989, 1993, 1995, 1997 and 1998. Ftirst world-wide study of the remit timeshare industry (199nr updated in 1992 apd 199s. • First national sutvry of fraatiorral interest p~nchasets (1989). • First national survey of the eanrpresort hrdustry - stout-volume stttdy for Coast to Coast Resorts (1983); updated in 1987 and 1991. • First national survey of lrotei condominium buyers (1984). • National surveys of resort timeshare owners in Brazil, (1998), France (1996). Claatmy (l9%~ [taty (1996), Spaur (1996), Argentina (1996), the United Kingdom (1981 and 1987). Canada (1981 and I993~ Australia (1983), the Caribbean (1983), Mexico (1986, 1993, and 1996). Shtgapore (1992), and Malaysia (1992). • Three-volume study for the National Timeshare Council documenting the socio-economic impacts of resort time_sharin8 (1980); updated in 1987: • First study by the British Deparmtem of the Environment on vacation homes (I 976). • ~Brnt ~Y ever funded by dra federal gevtxnment (Hewing and Urban Development and President's Couacit on ErrvironmeMal Quality) on privatNy owned recreational properties (1974); updated for U.S. Forest Service (1977 and 1979). ~ _, RCI Consulting is a member of the American Resort Development Association and the Urban Land Institute. A corporate brochure is available from: RCI Consulting, Inc., 767 Willamette Street, Suite 307, Eugene, Oregon 97401 (341) 686-9333 (te1) - (541)686-8142 (fez) - ragatzrcicia7_,aoLwm ~.~ HoBSON FERRARINI A S S O C I A T E S LnRJ USE ECOMO:'41C5 DATE: February 28, 2001 TO: Scott Writer FOUR PEAKS MANAGEMENT, LLC FROM: Steve Ferrarini HOBSON FERRARiNI ASSOCIATES SUBJECT: Compazative Analysis of the Benefits to the City of Aspen of Development of Interval Ownership Versus a Hotel EXECUTIVE MEMORANDUM Hobson Ferrarini Associates has been retained by Four Peaks Management, LLC to provide an objective evaluation of the comparative benefits of developing an interval ownership product or a moderately priced hotel on a site in downtown Aspen, Colorado. The analysis focuses on cunent industry trends, occupancy rates, user demographics, and economic impacts. Industry Trends Interval ownership is a way for the general public to pre-purchase, at a fixed price, an annual vacation at a lower cost than a wholly owned vacation home that they will probably not have time to use for more than two or three weeks a year. Thus, the interval consumer can structure a program that will give them as much vacation time as they can afford or find time for, at a small fraction of the cost. Interval ownership is a way for the general public to pre-purchase, at a fixed price, an annual vacation at a lower cost than a wholly owned vacation home that they will probably not have time to use for more than two or three weeks a year. Thus, the interval consumer can structure a program that will give them as much vacation time as they can afford or find time for, at a small fraction of the cost. Today, interval ownership is growing at a compound annual growth rate of 7.2%, compared to only 2.4% for all vacation properties in total. As noted in an industry overview, attributes contributing to the phenomenal success of this industry are as follows: The United Sates Timeshare Industry' Overview and Economic Impact Analysis. Washington DC: American Resort Development Association (ARDA), 1997. • Brandin: Major hospitality companies like Disney, Marriott, Four Seasons, Ritz Carlton and others have added creditability and security to buyers. • Wall Street Financing: Many of the hospitality companies have gone public and sold stock to raise capital to build hotels and interval ownership products. In 1995 there were just five public companies in the industry with a mazket capitalization of $262 million. By 1997, several other hospitality companies had gone public and the combined market capitalization had increased to over $1 billion. • Flexibility: In order to better meet consumer needs, a proliferation of interval ownership products have begun to enter the mazket. Different intervals are now being offered that range from as low as a 1/7th share with five or six weeks of guaranteed annually use to a I/52nd share with one week of annual use. Additionally, most new interval projects do not sell fixed time, rather usage has become more flexible to meet the changing needs of buyers. • Luxury Product: Most recently, large hospitality/hotel companies like Four Seasons, Ritz Carlton, Auberge, Rosewood, Club Regent, American Ski Company, Millennium Partners and The Owners Club have entered the interval market with more luxurious products and interval sizes ranging from 1/4th to 1/5th shares, allowing the purchase of more annual vacation time in five-star resorts. Thus, interval products range from relatively affordable to more expensive luxury product. Occupancy 1. Interval projects maintain higher average occupancy than compazable quality hotels and, therefore, bring more people to the towns where they aze located: • According to Smith Travel Reseazch,z annual resort hotel occupancy in the United States averaged 68.1% in 1999 (however average occupancy in Aspen it was 56.8%, see Table 1). • RCI Consulting (pg 26)' reported annual occupancy in interval projects conservatively averaged approximately 80%-81%, approximately 10 percentage points higher than resort hotels. However, the report notes that the reported average significantly underestimates occupancy in most projects because it included new projects that had a large inventory of unsold units. Stabilized projects perform better with most projects achieving occupancy rates in excess of 80% and more than 25% exceeding 90% year round occupancy. Given the z Hotel Operating Statistics. Henderson TN: Smith Travel Research, 2000. 3 The Resort Timeshare Industry in the United States 1997 - A Survey of Proiects with Active Marketin¢ and Sales Procrams. Indianapolis: Resort Condominiums International (RCI), 1997. subject's location it would be expected to perform among the top 25% and achieve occupancy rates in excess of 90%. 2. Hotel occupancy in Rocky Mountain ski areas tends to be high in the prime winter and summer seasons, but very low in the shoulder seasons, bringing down the overall annual average below the national average. Annual hotel occupancy in Aspen and Park City illustrate this trend: Table 1 Average Annual Hotel Occupancy Rates Year Aspen CO Park City UT National Avg. 1999 54.9% 53.4% 68.1% 2000 56.8% 54.7% N/A SOURCE: Smith Travel Research 3. Statistics published by Smith Travel Research further indicate that moderately priced, economy, and budget hotels maintain lower average occupancy rates than more expensive ones. In fact, occupancy rates decrease as prices decrease. Table 2 Average Annual Hotel Occupancy Rates By Price Category Year National Avg. Upscale 72% Mid-Price 68% Economy 67% Budget 61 SOURCE: Smith Travel Research 4. There are several reasons why less expensive hotels perform more poorly, including quality, condition, competition from less expensive accommodations (i.e. family, friends, and RV and camping), and the fact that they target a segment of the population that travels less frequently. 5. In seasonal resorts locations like Aspen, the inability to attract guests in the shoulder seasons fizrther erodes the performance of moderately priced hotels. As illustrated in the table below, year round occupancy at moderately priced hotels located near Colorado's destination ski resorts averaged 52.3% from 1998-2000. During the six- month shoulder seasons occupancy averages only 39.7% and drops below 30% in May. This segment of the market cannot typically attract off-season business by discounting room rates because their rates are already reasonable and these types of properties do not provide compelling accommodations. Figure 1: Average Monthly Occupancy 1998-2000 Moderately Priced Hotels Near Colorado Ski Resorts ', 90% 80% i 70% 'I 60 ~ SO% 40% i 30% 20% 10% 0% ~- Jan Feb Mar April May June July Aug Sept Oct Nov Dec SOURCE: Smith Travel Reseazch 6. Occupancy for interval ownership projects aze higher than hotels for a number of reasons including: • Ownership: Interval owners have made an investment and therefore are committed to using their time. If owners do not use their unit they often give their time to family or friends or make the unit available through formal exchanges programs to owners worldwide. • Bonus or Float Time: Over 55% of the interval properties in the United States also offer bonus time or float time. Bonus time represents nights that are not being used for various reasons. This time is then made available to the resort operator to rent to owners and/or the general public. Projects with a smaller number of owners per unit usually build bonus or float time into the project by not selling all of the weeks. In these projects owners can use this time free of charge except for housekeeping costs. Thus, occupancy is substantially increased and the consumer can take more frequent vacations at a lower cost. • Greater Owner Satisfaction: Survey research by RCI Consulting, ARDA and DK Shifflet & Associates indicate that the vast majority of interval owners are very satisfied with their purchase. RCI Consulting reports (pg 52)° that 73.1 % of interval owners enjoyed their vacations more and 66.3% believe that, "since owning, their lives have been positively impacted." Given these responses, it is not surprising that interval owners have a higher level or overall vacation satisfaction than hotel guests: Figure 2 Overall Vacation Satisfaction 90% 78% 80% ', 70% 63~ I 60% 50% &aS,el SOURCE: D.K. Shifflet & Associates Ltd. User Demo¢raphics 1. A 1999 study completed by D.K. Shifflet & Associates shows that the household demographics of interval owners are largely the same as households who rent hotel rooms on leisure/pleasure trips. This finding is not surprising given that the interval buyer is usually someone who has rented a hotel room for previous vacations and believes that interval ownership will provide more benefits, greater vacation satisfaction, and a better value over renting a vacation home or hotel room. ° The Benefits of Ownine Resort Timeshare. Indianapolis: Resort Condominiums International (RCI), 1998. 2. After the initial purchase, the ongoing annual costs of owning an interval is far less expensive than staying in hotel rooms. This is one reason why the demographic profile of interval owners is very similar to hotel guests and why households interested in one- to two-weeks of vacation ownership do not need to be affluent. Figures 3-5 Demographic Comparison Interval Owners vs. Hotel Guests on Leisure Trips Age 50% 40% 30% ~~ 20% 10% II 0% 100% ~ 80°/a 60% 40% 20% 0% Marrital Status ®Leisure Hotel ~, ^ Interval Nfanied NevEr Mazried Divorced, Widowed Under 35 3554 55+ ,~ Ftlucation level 20% I 10% 0% AIo College College Graduaze Degree SOURCE: D.K. Shifflet & Associates Economic Impacts 1. Interval ownership impacts to the local community more positively than hotel guests for a variety of reasons, including. • Higher Occupancy: As previously discussed, interval projects maintain higher year round occupancy and therefore attract a larger number of people to the communities where they are located. This is particularly significant in seasonal locations like Aspen when the amount of tourist activity can drop by as much as 50% during the shoulder seasons. • Larger Expenditures: Interval owners and their family/guests (collectively called a party) outspend average hotel parties on local goods and services by more than 25%. One of the reasons that they can afford to spend more money is they do not have to pay a large hotel bill at the end of their stay. .~, ''Z '~ .Wr Table 3 Average Daily Spending, 1999 Local Goods and Services Type Hotel Party Interval Party % Difference Food $73.36 $92.34 25.9% Shopping $52.92 $61.18 15.6% Entertainment $50.68 $71.82 41.7% Miscellaneous $16.24 $18.24 12.3% Total $193.20 $243.58 26.1% SOURCE: D.K. Shifflet & Associates • More Visits: Interval owners stay longer and return to the same area more frequently than hotel guests. As a result, they become more a part of the community, take more pride in it, and are more apt to visit and spend money in a variety of establishments because they will have more time to explore parts of the city beyond the major tourist destinations. • ARDA reports (pg 51)' that the average interval owner took 2.5 vacations in the resort area during the five years preceding their purchase, but plan to take approximately 4.0 vacations in the same area in the five years after they purchase. • RCI Consulting reports (pg 31)6 that the average number of days an interval owner spent in the location where they purchased was 3.2 days per trip before they purchased, but 6.8 days per trip after they purchased. • D.K. Shifflet statistics confirm the above. 5 Industry Overview 6 Timeshare Purchasers: Who Are Thev. Whv Thev Buv. Indianapolis: Resort Condominiums International (RCI), 1998. u Summary of Conclusions Interval development in downtown Aspen is expected to provide much greater benefits to the larger community by attracting people who will spend more money on vacations, stay longer and will be invested members of the community. 2. The above benefits will accrue while still being able to attract ]argely the same type of consumer to Aspen that a moderately, upscale priced hotel would attract, because interval owners can purchase as much vacation time as they can afford. In fact an interval project in downtown Aspen would be expected to attract a demographic group that is probably under represented in Aspen currently due to the cost of vacation property and many lodging facilities. 3. In terms of local expenditures interval owners spend 26% more on local goods and services than hotel guests. However, because interval projects maintain higher year round occupancy, even with fewer rooms and/or lock-offs' an interval project at the subject would generate approximately 65% more in local expenditures than a hotel. Table 4 Aggregate Annual Spending Estimate Hotel vs. Interval Hotel Interval Rooms/Lock-Offs 150 124 Times: Days per Year 365 365 Times: Average Occupancy 57% 90% Equals: Occupied Room Nights/Annual 31,200 40,700 Times: Daily Expenditures $193 $244 Equals: Total Ann'I Expenditures (000) $6,021 $9,931 SOURCE: D.K. SMfflet & Associates and Hobson Ferrarini Associates ' Lock-off defuu[ion: Large interval (two plus bedrooms) units are ofren built so the unit can be divided into several units that can be used independently, thus effectively creating more rooms in the project. In these cases the owner has the discretion to use all or a part of the overall unit. If less than the whole is used the owner is rewarded with more vacation time and the operator is free to rent these rooms to the general public. ~... ,., APPENDIX A FIItM QUALIFICATIONS The real estate industry continues to be dynamic. Challenges and opportunities are arising from global financial markets, improvements to technology and communications, increasing affluence, emerging sources of financing, and other factors that impact demand for real estate. Since our founding in 1976, Hobson Ferrarini Associates has responded to the ever-evolving real estate industry by expanding and improving the services that we offer to our clients. We always strive to add value and provide a competitive advantage to our clients' real estate activities. We have and will continue to accomplish this goal by helping our clients stay at the cutting edge of new and emerging trends and markets. Our comprehensive real estate advisory services include: • DevelopmentAdvisoryServiees • Periodic Real Estate Market Reports • Investment Advisory Services • Litigation Support • Public Policy and Metropolitan Development Advisory Services • Strategic Planning for Private and Public Organizations • Valuation Services Our assignments involve all types of real estate products and portfolios, including office, residential, urban and suburban mixed-use complexes, land development, industrial, resort and recreational developments, and planned communities. We are particularly proud of the diversity and quality of our clients who include: • Corporations • Developers • Financiallnstitufions • Government and Public Agencies • Institutionallnvestors • Non-Profit Organizations The hallmark of Hobson Ferrarini Associates continues to be clear and del5nitive recommendations that add value and can be readily implemented by our clients. Recommendations are based upon market, economic, physical, and political realities influencing a given real estate asset or portfolio. Wallace Hobson, CRE, President 503.226.6616 x 11 wmh(ahobsonferrarini.com Steve Ferrarini, I!P. 503.226.6616x13 sr/ia`,liobson/errarini.com ATTACHMENT? AFFIDAVIT OF PUBLIC NOTICE REQUIRED BY SECTION 26.304.060 (E), ASPEN LAND USE CODE ___, ~ f' ADDRESS OF PROPERTY: ~( ~ ( Asp~,~C S SCHEDULED PUBLIC HEARING DATE: !/ (~ _' , 200 STATE OF COLORADO ) ss. County ofPitkin ) I, yGl yv ~ ~~j ~ ~ I ~ l_.i' ! (name, please print) being or representing an Applicant to the City of Aspen, Colorado, hereby personally certify that I have complied with the public notice requirements of Section 26.304.060 (E) of the Aspen Land Use Code in the following manner: Publication of notice: By the publication in the legal notice section of an official paper or a paper of general circulation in the City of Aspen at least fifteen (15) days prior to the public hearing. A copy of the publication is attached hereto. Posting of notice: By posting of notice, which form was obtained from the Community Development Departrnent, which was made of suitable, ;~ waterproof materials, which was not less than twenty-two (22) inches ~`ide and twenty-six (26) inches high, and which was composed of letters no~ less than one inch in height. Said notice was posted at least fifteen (15) days ,~ .. prior to the public hearing and was continuously visible from the _ day of . , 200_, to and including the date and time of the public '~=-_'h~aring. A photograph of the posted notice (sign) is attached hereto. Mailing of notice. By the mailing of a notice obtained from the Community Development Department, which contains the information described in Section 26.304.060(E)(2) of the Aspen Land Use Code. At least fifteen (15) days prior to the public heazing, notice was hand delivered or mailed by first class postage prepaid U.S. mail to any federal agency, state, county, municipal government, school, service district or other governmental orquasi-governmental agency that owns property within three hundred (300) feet of the property subject to t~e development application. The names and addresses of property owners shall be those on the current tax records of Pitkin County as they appeared no more than sixty (60) days prior to the date of the public hearing. A copy of the owners and governmental agencies so noticed is attached hereto. (continued on next page) Rezoning or text amendment. Whenever the official zoning district map is in any way to be changed or amended incidental to or as part of a general revision of this Title, or whenever the text of this Title is to be amended, whether such revision be made by repeal of this Title and enactment of a new land use regulation, or otherwise, the requirement of an accurate survey map or other sufficient legal description of, and the notice to and listing of names and addresses of owners of real property in the azea of the proposed change shall be waived. However, the proposed zoning map has been available for public inspection in the planning agency during all business hours for fifteen (15) days prior to the public hearing on such amendments. nature The foregoing "Affidavit of Notice" was acknow edged before ate thi day u~rrontII+rs:TausxnxEa~aswt7°ws N07lCE L4 HEREBY CJVEN thel a Poak ~~ .e w of y>-~-- . 200 by ~J~-~~ ~ - WITNESS MY HAND AND OFFICIA1y SEAL -. ~ ~,~ o, „u~ro`~os~ cow 7Yxr My commission expires: ~~~~~=~~ -` ARY to ~a Y S:W R•m- . _.. e°; c«mau ~~. ~ j3D ~ ~" ary Not Public . st. n.Ree: a aa~na ,. hY the flly of Aspen tl ?• S`,qp~„ ~-'"~~vt oa peperlmalt ~evavBa9 edac N R W ro y j ~ 77 Oq ~s a coOtPkh re- u ppt ou aame+tlau al aaaldpsl cage seeuon z°.s4u, , ' 9A'•. c newBercBevdaPata't~ Codepmmdnwnta te feted to tlro 7lmnlwe Reguletlmu MR e0ect the _ F,',,. .• .. O • foibwinq aunidplCade Sealloae: ~. ^ ~ Ci O1.C 26.104.1W-Ddinhboe: zs.71°.NO-Como~er<tdCorezweDlehtet Z ATTACHMENTS: me 26.710.190-IndRe/ Taurlet Rotden0el Dletrict: 2&710.200-Caomxtd Lodge Zoa pstrlct: nd, z&7ro.720-Cadge PrteaY+Han 2°^e D1i~t• COPYOFTHE PUBLICATION ze.+edom-SubdiWSbnE~emPOaa• 26.Ig0.010-SubdWieioa procedures 020-procedures for slgo perwt A9P~v 26510 . as,m.87g-taus E„•arpt~ w ~APH OF THE POSTED NOTICE (SIGN °" a ear taruKr aadeet 1~ o Deft °°. dre C1tY a A+ o°"°®t~10S' 9t""°P°'CO~~ ,NDGOVERNMENTALAGENCIESNOTICED so9a e/HdenRsiht "~ BYII'IAIL seven cuY warohea m The n.pen-7lmes or. bore Zz:•?Ag2. (~1g) - AFFIDAVIT OF PUBLIC NOTICE REQUIRED BY SECTION 26.304.060 (E), ASPEi~I L~AN~D~~USE CODE ADDRESS OF PROPERTY: ~~ V~_ Aspen, COS SCHEDULED PUBLiC HEARLYG DATE: Z ~- , Z00 STATE OF COLOR~IDO ) ss. County oCPitkin ) I, ~ ~=1 ~/1/l ~~ % VI ~/ (name, please print) being or representing an Applicant to the City of Aspen, Colorado, hereby personally ceRify that I have complied with the public notice requirements of Section 36.304.060 (E) of the Aspen Land Use Code in the following manner. ~Pub(icarion ofnorice: By thz publication in the legal notice section ofan official paper or a paper of general circulation in the City of Aspen at least fifteen (15) days prior to the public hearing. A copy ofthe publication is attached hereto. Posting of notice: By posting of notice, which form was obtained from the Community Development Department, which was made ofsuitable, waterproof materials, which was not less than riventy-two (22) inches wide and riventy-six (26) inches high, and which was composed of lette not less than one inch in height. Said notice was posted at least ten (1 days prior to the public hearing and was continuously visible from th~'_ day of 200_, to and including the date and time of the public hearing. r! photograph of the posted notice (sign) is attached hereto. tilai(ing ofnotice. By the mailing of a notice obtained from the Community Development Department, which contains the information described in Section 26304.060(E)(2) of the Aspen Land Use Code. At least ten (10) days prior to [he public hearing, notice was hand delivered or [[tailed by first class, postage prepaid U.S. mail to all owners of property within three hundred (300) feet of the property subject to [he development application, and, at least fifteen (15) days prior to the public hearing, notice was hand delivered or mailed by firs c~zss postage prepaid U.S. mail to any federal agency, state, county, municipal goveat~$ent, school, service district or other governmental orquasi-governmental agency that owns property vvithin three hundred (300) feet of the property subject to the development application. The names and addresses of property owners shall be those on the current tax records of Pitkia County as they appeared no more than sixty (60) days prior to the date of the public hearing. A copy of the owners and governmental agencies so noticed is attached hereto. (continued on nest page) Retuning or text amendment Whenever the official zoning district map is in any way to be changed or amended incidental to or as part of a general revision of this Title, or whenever the text of this Title is to be amended, whether such revision be made by repeal of this Title and enactment of a new land use regulation, or otherwise, the requirement of an accurate survey map of other sufficient legal description of, and the notice to and fisting of names and addresses of owners of real property in the area of the proposed change shall be waived. However, the proposed zoning map has been available for public inspection in the planning agency during all business hots for fifteen (15) days prior to the public hearing on such amendments. gnature The foreDoing `-Affidavit of Notice" was acknowledged before e this ---d y WITNESS MY HAND AND OFFICIAL SEAL pueuc noTlce M~ffNDh~f4i5.~TRIFSNARe FEGUI.k116N5 TIXf li ,NOTICE B Itl•:RF9Y tW a W>~ hsarln2 ~ SNtl be held on'tYresdaY. 21. 2002, N ameet- Ing to beylo at 4'.30 p.m. pie A~ ~!' nhtg a„d 2onGg Caamiss 1 Chmbe+s, Chy Nall, 130 So. Galena St , pen, to consider an application submitted by the City d Npen CommunltY ~°abPment Departmevp rsgaesWH ad°ption of revbed Timeshare DeYebpment Rek I ulatlons. The proposed cods emendmenu xrould resulC N a complete re<odiOCaDOn of Municipal Code Sec[bn 26.590. Timeshare pevebPment. Code Ainendmenb related to Ne Timeshare Heg- ulaDOns will dhxt [he foilowln8 Municipal Cdde Sediom:. 26.104.100-Delinitions;" 26.710.140-CommercW CoreZdre DlsWd: 26.710.190.- I,odge/TOUr15[.ResNlen[(a1 2oneDls- NIy commission expires: ~~~ ~~ Notary Public ~O '..vGB ~~. ~t ~ f11 '-I't j v i~ t ~ „^ vO ATTACHiVIENTS: Dbtrlcq acrd. IPY OF THE PUBLICATION o< °H OF THE POSTED NOTICE (SIGN) co em ~ - ,. 7y~; ~a~r ,° ie!.mtme.aazomneco~mn~51°^'AND GOYERtYttilEtYTAl AGENCIES NOTICED Pu011slied'In The AsPm,Tlmea on MeY 4. 2W2... ree29r ~ "BYNL=IIL