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HomeMy WebLinkAboutminutes.apz.20220104Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 1 of 8 Chairperson McKnight called the regular Planning and Zoning (P&Z) meeting for January 4th, 2022 to order at 4:30 PM. Commissioners in attendance: Ruth Carver, Sam Rose, Brittanie Rockhill, Teraissa McGovern, and Spencer McKnight. Commissioners not in attendance: Scott Marcoux Staff in Attendance: Amy Simon, Planning Director Jeff Barnhill, Planner Kate Johnson, Assistant City Attorney Cindy Klob, Records Manager COMMISSIONER COMMENTS None STAFF COMMENTS Ms. Simon will be mailing cards to the members PUBLIC COMMENTS None APPROVAL OF MINUTES Ms. Rockhill motioned to approve the minutes for December 7, 2021 and the motion was seconded by Mr. Rose. Mr. McKnight asked for a roll call: Ms. Carver, yes; Mr. Rose, yes; Ms. Rockhill, yes; Ms. McGovern, yes; and Mr. McKnight, yes; for a total of five (5) in favor – zero (0) not in favor. The motion passed. DECLARATION OF CONFLICT OF INTEREST None PUBLIC HEARINGS 420 E Hyman Ave – Variance for Reduction of Second Tier Commercial Space Mr. McKnight asked if proper notice had been provided. Ms. Johnson responded the notice was provided was in compliance. He then opened the hearing and turned the floor over to staff. Mr. Jeff Barnhill, Planner, introduced himself and then reviewed the application. The 3,009 SF site is located in the Commercial Core (CC) zone district. The site is currently under construction to develop a 3-story mixed-use building. He stated the application requests a variance to reduce the Second-Tier Commercial space and combine the two units to create one space for a new tenant. Mr. Barnhill stated the site is under construction from a 2014 Development Order and wasn’t subject to the second-tier commercial space regulations. The proposed changes to the project make it subject to these regulations. Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 2 of 8 He noted the second-tier regulations came about during the 2016 moratorium when Council was concerned businesses serving the full-time residents were at risk of being displaced. New requirements were implemented to require net leasable spaces in basements and on upper floors. He stated the code states no redevelopment of a building can result in less than 50% of the total planned second tier net leasable space and the applicant is proposing 180 SF of second tier net leasable space which is a reduction from the required amount of at least 85%. He displayed the proposed location of the second tier space. Mr. Barnhill stated there are 2 methods for reducing the required second tier net leasable space. One method allows the applicant to meet the requirement on another property. This method is not feasible for the applicant. The second method involves identifying a hardship reviewed and approved as a variance by P&Z. He then reviewed the standards applicable to variances. Mr. Barnhill next discussed the variance review criteria and staff’s findings. His review of the findings includes the following. • Staff does not find a need for more net leasable space a hardship. • Reasonable use of the site does not include a reduction of second tier commercial space. • No special circumstances or conditions exist on the site when compared to other properties in the same zone district. • Although the current building configuration may not provide enough net leasable space for the proposed tenant, it may be enough for another tenant. • The application represents an applicant-specific inconvenience rather than a site-specific hardship. • Staff is concerned a bad precedent will be set if this application is granted a variance. Mr. Barnhill concluded stating staff finds the review criteria for a variance to not be met. He displayed a layout of the building’s floor designs as per the permit on file. Mr. McKnight asked if the commissioners had questions for staff. Mr. Rose asked for a definition of second tier space. Mr. Barnhill responded it is a space that may be considered less desirable than other spaces in a commercial building. Adding it may not have street frontage and other characteristics. Mr. McKnight then turned the floor over to the applicant. Ms. Sara Adams, BendonAdams, introduced herself and the property owner, Marc Ezralow. Ms. Adams reviewed the project, noting it was designed under the 2012 Municipal Code by the previous owner and received approval in 2014. The current design of the building has commercial and three affordable housing units on the second floor and a free market unit on the third floor. Ms. Adams then reviewed the design of each floor and basement as currently permitted and under construction. She pointed out the area on the second floor to be retained as commercial and the circulation areas. She believes the design does not fit well with the current municipal code stating the building was not designed for second tier commercial, the new commercial design standards, the prohibition of free market residential, or the ability to do three stories. Ms. Adams noted Mr. Ezralow purchased the property in 2017 and plans to live on the third floor. He has always wanted to have one lease for the commercial space. She noted a luxury entity offered to take a lease on the commercial space, but Mr. Ezralow really wanted a more community oriented entity. He Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 3 of 8 began discussions with Banana Republic who stated they would need both the basement and ground level to make their business model work in Aspen. Mr. Ezralow submitted a changed order which was stopped by the City because it triggered a compliance issue with the second tier regulation the City was retroactively applying to the 2014 approval because the vested rights for the project had expired. She added the three year vesting rights are mandated by the state. Mr. Ezralow feels strongly about locally serving retail and decided to ask the P&Z Commission for relief from the second tier regulations. He doesn’t want a luxury retailer, but that’s plan B if combining the spaces doesn’t work out. She stated the request is to combine the ground and basement levels and indicated on a floor layouts where stair and lift/elevator would be placed. Ms. Adams read the definition of second tier per the Municipal Code. She added she does not believe the code actually supports the existence of these spaces defined by location and inherent lower rents. She stated the code regulates the location and size of second tier spaces, but not the use so it could be luxury retail, or any use allowed as defined per the code. It does not dictate whether the business actually serves the local community. Ms. Adams displayed a chart showing the approved and proposed values of the net leasable areas, noting they are draft numbers. She stated they are proposing a voluntary deed restriction on the commercial space if it is combined for general retail and would prohibit any luxury retailer from going into the space. This would allow for about 3,736 sf minus the connection of deed restricted general retail space serving the community. Ms. Adams noted both the general and specialty retail are defined in the code and both are allowed on all levels in the Commercial Core Zone District. She stated the goal of second tier commercial is to be locally serving and feels the deed restriction would meet this goal. She also noted goals from the 2012 Aspen Area Community Plan she believes are applicable to this application. Ms. Adams stated the code allows property owners to request a reduction in second tier space. She doesn’t feel it sets a bad precedent because each request must be heard and decided by the P&Z Commission. She noted the code provides two options for reducing the amount of second tier space. One is the off-site option and the other is to provide the second tier within the same block or zone district. She stated these options are not feasible due to the lack of inventory of available buildings to purchase to meet the second tier requirement. To her understanding the off-site option has never been used and is not feasible to the applicant. Ms. Adams stated with no feasible options, the applicant is requesting a variance. This code section lists criteria for site specific hardships to be met. She feels the proposal for a deed restriction is consistent with the purpose and intent of second tier spaces. She then pointed out two sections of the Aspen Area Community Plan which discuss the need for a balanced, diverse, and vital commercial mix to meet the year round needs and the need to facilitate sustainability of essential businesses to provide basic community needs. Ms. Adams then stated the proposal meets the minimum variance to make reasonable use of the building by using a combined space to provide a locally serving commercial business. She noted the potential tenant, Banana Republic, provided a letter stating they would need the combined space to provide adequate inventory space for a range of price points. She addressed the remaining criteria stating the situation is not self-created, but the result of significant changes to the code over the past 10 years. She added the 2014 approved building is non-conforming. It is over the floor area, over the height limit, and has free market residential which limits the ability to shift spaces around. She reiterated there is not off-site option. Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 4 of 8 Mr. Ezralow asked to emphasize a couple of things. He has been visiting Aspen for 30 years and plans to make it his home as soon as the building is completed. He knows of basement spaces in commercial buildings that are empty and not even finished out. He has talked with a number of real estate brokers, and they have no idea of a tenant who could be in a basement. He stated he has searched, and nobody is interested in being in a basement with no exposure. He added the basement was not built to accommodate a restaurant so that’s not a possibility at this time. He thinks it makes sense to have locally serving retail in this location. Mr. McKnight asked the commissioners for questions of the applicant. Ms. McGovern asked to see the definition of specialty retail. Ms. Adams displayed the definition on the screen. Ms. Rockhill asked for any examples of businesses moving into second tier retail since 2014. Ms. Adams stated the new Timberline Building on Main St which has Timberline mortgage in the basement space. Ms. Simon replied there are lots of second tier examples which existed before the city defined the concept. Ms. Simon stated there have not been many new buildings proposed since the 2016 code change with included second tier spaces. She added there is one approved for 304 E Hopkins next to the White House Restaurant which will have a restaurant on the street level and a separately functional space in the basement. Ms. Adams noted the owners of the Hopkins building have not been able to find someone to rent the basement space at this time. Ms. Carver asked how many second tier spaces with no windows are occupied by offices or retail. She can think of a couple. Ms. Simon suggested it is not the commission’s role at this hearing to question the success of the second tier space concept and it is their role to evaluate whether this applicant has a hardship in terms of being held to the standards. Mr. Rose asked if it would not be a hardship if you can’t fill that second tier space with a retailer. Ms. Simon responded that’s a really hard thing for the commission to evaluate without knowing the details on why a retailer has not been found. She reiterated their role in making a decision regarding the existence of a hardship. Mr. McKnight asked staff to display the review criteria. Mr. Rose asked what is the proposed use of the 180 SF on the second floor. Ms. Adams responded it could be an office space. Mr. McKnight then opened for public comments. Mr. Andrew Sandler feels the spirit of the code does not always match the results. He stated he has just leased the Golden Horn building where the Maru Restaurant and bike shop were located. He believes the restaurant failed due to the rents and the status of the building needing work which was not affordable by the tenant and the landlord. He stated he had to jump through a lot of hoops to rent both the first floor and the basement including two liquor licenses and change the name of the space just to adhere to the code. He noted other businesses are doing something similar in town to be able to have their businesses exist on two floors of the same building. He supports the applicant’s request for a variance. Ms. Linda Manning stated the intent of the code in regards to second tier commercial is for a business that serves the needs of the full time population. Second tier space is meant to be less desirable space Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 5 of 8 that would generate lower rent. She feels every space in Aspen is desirable. The code does not require the secondary space to be locally serving. She feels the application addresses all the criteria and is supportive of granting the variance. Mr. Bryan Semel, a commercial broker for the applicant, knows most landlords look for gyms and yoga studios for a lower level space. He believes gyms would take a second floor space, but not a basement space. He noted basement spaces can be expensive to retrofit and finish. For the applicant’s space, he has had offers for the entire building or just the street level space. He doesn’t feel second tier space works. Mr. Brian West, a member of the design team, stated his comments have been reflected by the others. Mr. Matthew Irwin, Deputy General Counsel for Banana Republic, stated his client is excited about the prospect of returning to the Aspen market and about the prospect of becoming a locally serving tenant. He noted a typical footprint for a store is 7,000 SF and they have figured out a vision for the space in the Aspen store. He noted the amount of space cannot be minimized further and if the application is denied, it is improbable the brand will have an opportunity to return to the Aspen market. Mr. Steve Peters, Head of Stores for Banana Republic, reiterated they are super excited about the prospect of re-entering the Aspen market to serve the local community. He stated Banana Republic would provide a localized assortment of product offerings, year round that is curated specifically to serve the community through a range of merchandise and price points for all genders. They are also aiming to design a space providing a store experience to be embraced by the local community, creating an elevated experience for all customer touchpoints inside the store. He reiterated the need for both the street and basement levels to create a space large enough to support serving the general local retail and make the project financially feasible. Ms. Kate Johnson noted the City Attorney’s office was provided an email of a public comment that she would like to read into the record (refer to Exhibit E on the Agenda Packet). She stated the email was from Leah Fielding and then read the email which offered support for Banana Republic. Mr. McKnight then closed the public comment portion of the hearing. Mr. McKnight then asked staff for any rebuttal or clarification of public comment. Ms. Simon offered to display the two draft resolutions. Mr. Bill Guth asked if he could provide public comment. Mr. McKnight responded he could have time. Mr. Guth he is generally quite in support of the variance because the City’s efforts to provide affordable retail, however well meaning, have not worked. He views it as an opportunity for general and affordable retail. He believes the overall intent is there and if a little bit of thought can be brought to make sure if Banana Republic doesn’t remain in the space, the community will not be disadvantaged in any way. Mr. Barnhill then displayed the denial draft version. Ms. Simon noted Ms. Adams had sent some requested amendments for the approval draft version. She reiterated staff is recommending denial. Mr. McKnight asked Ms. Adams for any rebuttal of clarification of the public comment. Ms. Adams did not have any rebuttal regarding the public comment, but noted she requested a change to the draft denial resolution to clarify the corresponding code section for the decision. She has provided the changes to staff. Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 6 of 8 Ms. Simon feels the criteria have already been clarified in the resolution. She pointed out this is an evaluation of a hardship and a variance and not evaluation of the success or lack of success of the City's various efforts to try to preserve some affordable commercial space in town. Ms. Johnson noted the suggested addition of a deed restriction by the applicant is not part of the criteria under review and the commission cannot mandate the deed restriction, so it would be a voluntary act by the applicant. Mr. McKnight then opened for commissioner discussion. Ms. McGovern does not feel the applicant has demonstrated a specific hardship and had three years before the vested rights expired to combine the two units. She feels mentioning Banana Republic is an attempt to play on the commissioner’s emotions, but the commissioners will not be negotiating or signing a lease and the negotiations could break down tomorrow. She is concerned the resulting large space could be rented to anybody and they may not be locally serving. She noted the voluntary deed restriction is not a criteria and as a specialty retail, they would eliminate clothing retailers as written in the code. She is not ready to approve the variance request. Mr. Rose feels a hardship exists to fill the second tier space with a viable business and Banana Republic meets the spirit of being locally serving. He does not feel the basement space would be highly desirable by itself. He would grant the variance with a stipulation if Banana Republic left, it would go back up for discussion for the next potential tenant to make sure the spirit of it is still met. Ms. McGovern noted the commission cannot make the selection of a tenant part of the criteria. Mr. Rose stated he would still go with the spirit of it all and feels it’s a hardship to fill these spaces based on standard item 2) …minimum variance that will make possible the reasonable use of the parcel, building or structure. Ms. Johnson reminded the commissioners the commission can’t dictate what businesses or type of businesses the space can be leased to by the owner. She added the proposed deed restriction states the property would be deed restricted for general retail use only and would go away if the owner wanted to lease to a non-general retailer. She stated they would have to separate the spaces because they would no longer have approval for the two spaces combined. Mr. Rose believes that goes with the first standard stating generally consistent with the purposes, goals, objectives and policies of this Title and Municipal Code. Ms. Carver does not believe the code matches the intent and it is extraordinarily difficult to rent a basement space with no windows. She feels a downstairs space with a staircase would make the space very usable. She believes Banana Republic would make a great store. She agrees with some of the public commenters stating the intent of the code is good, but not working. She would vote to approve the variance. Ms. McGovern asked Ms. Carver how she feels about the variance criteria. Ms. Carver responded the application is not a hardship based on the review criteria and would deny it even though her heart says something else. Ms. Rockhill stated she hates to see empty spaces in Aspen. And with the current climate and retail mix and disappointment people are experiencing, she thinks it is an interesting opportunity. She sees the review criteria and Ms. McGovern’s point but is fighting with common sense as to what Aspen could really use and needs. Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 7 of 8 Mr. McKnight asked Ms. Carver to confirm her position. Ms. Carver said she would go out on a limb and say she is in favor of approving the variance request because she feels it could be a useful space. Mr. McKnight stated he is more on the side of Ms. McGovern based on the review criteria. He does not believe the hardship was proven to exist by the applicant. Ms. Rockhill believes the deed restriction is a very important part of the application and doesn’t want just anyone to be able to utilize the space. She would like to be very clear on expectations to whatever legal extent is possible. Ms. Simon and Mr. Barnhill then then displayed the draft resolution for approval to make sure it contains what the commission wants in it. Ms. Simon asked the commissioners to expand on the fifth Whereas clause to define the hardships existing to grant the variance. She added the reference to the deed restriction further down in the resolution needs to include what the commissioners want it to state. Ms. Simon noted a clarification had been received from the applicant earlier today regarding the number of SF available as specified in Section 1. The applicant will not have 365 SF of second tier space in the basement and will only have the 180 SF of second tier space on the second floor. All the other space will be waived. Ms. Adams then displayed and read the proposed deed restriction language to be added to Section 1. Ms. Rockhill, Ms. Johnson, Ms. Simon and Ms. McGovern suggested some changes regarding what happens if the space is no longer used per identified. The changes to Section 1 are included below. The applicant voluntarily agrees to deed restrict the combined ground level and basement level spaces to General Retail Use. The deed restriction shall specify that the ground level and basement level spaces are required to be separated should the owner, at their own discretion, decide to lease the combined space approved herein to a use other than General Retail as defined in the Land Use Code. The variance approval shall vacate, and the project shall be restored to the approved plan for commercial space as shown in Exhibit A upon the use of the combined space for anything other than General Retail as defined in the Land Use Code on January 4, 2022 and provided below. Mr. McKnight asked the commissioners in favor of approving the variance to identify the hardships allowing for a variance. Ms. Carver feels the hardship is the space is practically unusable. Mr. Rose and Ms. Rockhill agreed with Ms. Carver. Ms. Rockhill motioned to approve Resolution #1, Series 2022 incorporating the deed restriction and correct square footage. Ms. Rockhill amended her motion stating she motioned to approve Resolution #1, Series 2022, approving the variance request for 420 E Hyman Ave with the condition the deed restriction is included as a condition of approval and the SF are amended as proposed by staff. Mr. Rose seconded the motion. Mr. McKnight requested a roll call: Ms. Carver, yes; Ms. McGovern, no; Mr. Rose, yes; Ms. Rockhill, yes; Mr. McKnight, no; for a total of three (3) in favor – two (2) not in favor. The motion passed. Mr. McKnight then closed the hearing and thanked everyone. Minutes Aspen Planning and Zoning Commission January 4, 2022 Page 8 of 8 OTHER BUSINESS Ms. Johnson described the options the board to elect a chair and vice-chair for the new year. Mr. McKnight stated he would prefer not to be chair this year and nominated Ms. McGovern as chair. Ms. Rockhill and Ms. Carver agreed with his nomination. Ms. McGovern accepted the chair nomination. Mr. McKnight accepted the vice-chair nomination. Ms. Carver motioned to elect Ms. McGovern as chair and Mr. McKnight as vice-chair for 2022. Mr. Rose seconded the motion. Mr. McKnight requested a roll call: Ms. Rockhill, yes; McGovern, yes; Mr. McKnight, yes; Ms. Mr. Rose, yes; Ms. Carver, yes; for a total of five (5) in favor – zero (0) not in favor. The motion passed. Ms. McGovern motioned to adjourn and was seconded by Ms. Carver. All in favor and the meeting was adjourned at 6:23 pm. Cindy Klob, Records Manager