Loading...
HomeMy WebLinkAboutminutes.council.19890614June 13, 1989 NOTICE OF SPECIAL MEETING At the request of Councilmembers Crockett and Peters there will be a special City Council meeting Wednesday, June 14, 1989, at 3:00 p.m. in the City Council Chambers, 130 South Galena, Aspen, Colorado. The agenda for that meeting is: 1. Appointment of special legal counsel to investigate all lawsuits, land use approvals and associated matters surrounding the Aspen Mountain Lodge PUD and to consider ~-hether it is appropriate for Council to delay issuance of a building permit for up to twenty-one (21) days chile such investigation is conducted. ' / Kathryn S Koch; City Clerk Notices delivered to: Mayor Stirling Councilmembers Michael Gassman Frank Peters Steve Crockett Bill Tuite City Manager Anderson City Attorney Special Meeting Aspen City Council June 14. 1989 Mayor Stirling called the meeting to order at 3:05 p.m. with Councilmembers Peters, Crockett, Tuite and Gassman present. City Clerk Kathryn Koch told Council this special meeting was called by Councilmembers Crockett and Peters. The written notices were hand delivered before 3 p.m. June 13, 1989. ASPEN MOUNTAIN LODGE PUD City Manager Bob Anderson told Council the super structure building permit for this project was issued by the city about 1:30 p.m. Mayor Stirling said Council has discussed having an outside objective look at all the approvals, lawsuits, etc. on this project. Mayor Stirling said Council has received a letter from the applicant challenging Councilman Peters' participation in any decisions related to the Aspen Mountain Lodge PUD. Councilman Peters told Council he has withdrawn from the petitioners' committee for the referendum and has been replaced by Jim Breasted. The committee is still duly constituted and the lawsuit is still outstanding. Councilman Peters said he has been challenged on the basis of conflict of interest based on his participation on the petitioners' committee to have a referendum on Resolution #29. Councilman Peters said he has also been challenged as the owner of two small hotels in Aspen. Councilman Peters said he feels that is an outlandish challenge. Councilman Peters said he has argued against spending for the ARA and for advertising and marketing for Aspen. Councilman Peters said these actions will directly effect his hotels. He objects to what they will do for the overall community. Councilman Peters said Aspen is a small town where a lot of people are in business. It is almost impossible not to have some conflicts. Councilman Peters said the Ritz Carlton has been clouded in controversy for a year. There have been challenges to the entire approval process. Councilman Peters said the approval process is considered a quasi-judicial process, it is legislative because it puts burdens on land, and it is quasi-judicial because Council has to make findings of fact and to follow due process. Councilman Peters said the process has to be accurate and complete on both levels. Councilman Peters said processes that have not been complete on both levels have been challenged successfully in Colorado. Councilman Peters said he would like to clear the air and to call for a special counsel outside of Aspen. Councilman Peters recommended Sue Griffiths who has had experience represent- ing the Colorado Municipal League and is a land use expert. Councilman Peters said Ms. Griffiths would examine all the Ritz Carlton approvals, the process, the lawsuits and to make a finding of whether the lawsuits have any validity and whether the permits and approvals are valid and to make a presentation to Council. 1 Special Meeting Aspen City Council June 14. 1989 Councilman Crockett said he has inherited this hotel issue. There are lawsuits pending against the city associated with the Aspen Mountain Lodge PUD process. Councilman Crockett said he would like special counsel to help make an assessment on how to proceed with these lawsuits. Councilman Crockett said he would like outside counsel to review and evaluate the lawsuits and lay this issue to rest. Councilman Crockett said he would like everything associated with the Aspen Mountain Lodge PUD looked into. John Sarpa, representing the applicant, said it is appropriate for Council to have good counsel. The city and the applicant are co- defendants in a lawsuit. Sarpa said the applicants are confident that this will help clear the air, and when the conclusions are made, they will be commensurate with those of the applicants. Sarpa said Councilman Peters withdrawing from the petitioners' committee in no way affects their perspective on his conflict. Sarpa said Councilman Peters has made it clear for a long time how he feels about the hotel. Sarpa said the applicants have been negotiating with the city for two years in good faith. Sarpa said they have met all the city's requests. Sarpa said there was legality and fairness involved in these negotiations. Sarpa said what has happened in the last 48 hours gives the applicants a lot of concern. Lennie Oates, representing the applicant, entered into the record a letter dated June 6, 1989, from Bob Hughes. Mayor Stirling asked if the applicants have any interest in discussing the bulk and the mass of phase one Aspen Mountain Lodge PUD. Sarpa answered no. Sarpa said the people of the community have spoken and have said they want employee housing. The applicants have offered to build more employee housing about doubling what was offered originally. Sarpa said the applicants were given the right to build up to 50 hotel rooms in phase, they have offered to reduce that to only 2 4 hotel rooms . The applicants have submitted phase two to the city for only 24 rooms. Sarpa said the applicants do not believe the community would support going back on phase one. The applicants would rather be spending their time on future needs. Mayor Stirling moved to go to a third alternative that Council separate themselves and engage a special independent Council to investigate all lawsuits, land use approvals and associated matters surrounding the Aspen Mountain Lodge PUD; set a deadline of 21 days; allocate up to $25,000; that the applicant in good faith understand that the city is doing this and that it puts the applicant on notice so if the Council's action taken in 1988 could possibly be recommended as being deemed illegal from the beginning and that the permit could be revoked, that is a possibility; seconded by Councilman Peters. 2 Special Meeting Aspen City Council June 14, 1989 Fred Gannett, city attorney' s office, said any opportunity to bring more light to the subject is welcome. Gannett said there are a lot of documents to review, and these are huge substantive issues. Gannett said he would be doubtful someone will put their malprac- tice on the line and categorically state there is or is not merit to this case. Gannett said his office has contacted a number of attorneys and circulated some of these issues . Gannett said no one has ventured a categorical opinion. Gannett said the city has retained independent counsel to obtain an opinion that relates to the potential conflict of Councilman Peters. This opinion is not for general dissemination. Councilman Peters said he talked to Susan Griffiths about doing his conf 1 ict research . Councilman Peters said Ms . Griffiths stated she would have a conflict of interest if she had to process both requests. Councilman Peters said he will seek his conflict of interest judgement somewhere else. Mayor Stirling asked for a report back from staff as soon as possible on Mr. Griffith's availability. Councilman Tuite asked if this is the first step towards withdraw- ing the approval for the Ritz. If the city gets an opinion the Council is comfortable with, what happens to the city. Councilman Tuite asked if the city withdraws the approval, will they have to bond for damages. Gannett said at one time there was a majority of Council that would have withdrawn the Ritz approval. At that time the city was prepared to bond the project to seek injunctive relief to stop the project from going forward. Gannett said the plaintiffs in the lawsuit can seek injunctive relief, stop the project and post a bond which would make the applicant whole if the plaintiffs lose. Gannett said if the city were to interfere with the approval process, he would recommend to seek immediate injunctive relief to stop any further action on the project. Councilman Tuite said there are enough problems in this town that Council has to deal with without adding more. Councilman Gassman said he does not know if the city is in a good or bad position. The only information Council has received so far has been from participants in the lawsuits. Councilman Gassman said he will be better able to answer the broader question of what next after the next 21 days. Councilman Peters said the point is whether the city acted legally; this should be pursued. The issue stands on it own and should be examined. Gannett said the independent legal opinion is the best money to be spent on the subject; it will serve the city, the Ritz, and the citizens. Gannett told Council there is no one other than a judge who will tell Council that project is legal or illegal. Councilman Peters said he would like to get an examination of the procedures that were followed. Councilman Peters said if there are 3 Special Meeting Aspen City Council June 14. 1989 flaws in the procedure, the city should correct them. Councilman Crockett said he needs help to make this decision. Councilman Crockett said when Council get the information back, it is incumbent upon Council to assess the information and make a determination of what path they want to pursue and deal with the hotel project. Sarpa said the applicants feel very strongly even if there were flaws in the process, that is history. The appli- cants have relied on what has previously been granted to them. Sarpa said because of the reliance, there is a great liability to turn around. Sarpa said the applicants are comfortable with their PUD as it is. Fred Smith asked if the findings of this special counsel will be made public. Mayor Stirling said he will recommend they be brought to Council July 10th. Jim Breasted told Council the issuance of a building permit an hour and a half before this meeting has the appearance of impropriety. Breasted said he hopes this is included in the matters to be considered by special counsel. Lee Miller said the Council knows where the community stands on wanting the Ritz because of the October election. Miller said Council is using the process to resurrect some old problems. Miller said the Council should let the community come together. Walter Ganz said in order to have good government one has to be able to rely on decisions of the governmental body. Ganz said the situation will not be changed at all and the city will still be facing the lawsuits. Ganz said spending of $25,000 on a special counsel is a waste of money and needlessly complicates the process. Richie Cohen said he does not support outside counsel. Cohen said if the city tries to stop the project with an injunction, they will have to come up with a very large bond. Cohen said if the city tries to take away the building permit, they will be faced with endless lawsuits. Cohen said a bond for an injunction will cloud the city's possibility to bond anything else. Toni Whaley said she is concerned about the potential lack of judgement on the part of Council relating to jeopardizing the city's bond rating. Jon Busch said it seems apparent the city is proposing to hire special legal counsel to see if the city has a defensible position to rescind approval for the hotel. Busch said Council has already had two indications from the electorate that they want the hotel to go ahead. Busch said Council's proposed action is in violation of the will of the majority of the voters. Busch said whether the city's process was illegal or not, the developer had reliance on the process and moved ahead on that process. If it is illegal, it was the city's mistake, not the applicant's mistake. Lennie Oates, representing the applicant, said they do not support Council getting an opinion to take the approvals away. Si Smith 4 Special Meetinct Aspen City Council June 14, 1989 said the city has a process that has been going on for a number of years. Council is bringing up something that can only be construed as going against what the process has determined. Jim Curtis said this is a major decision and it would be prudent to seek outside counsel. Curtis said hopefully these issues can be resolved and the community can move on. Richard Compton commended Council for this motion to seek outside counsel and to get as much clear advice on the merits of the lawsuits in order to expedite this process. Mary Martin said there are three lawsuits that three judges are going to make a decision on. Ms. Martin said she does not understand why another lawyer is needed. Ms. Martin said the votes of the people must be respected by government. Ms. Martin said there was nothing on the May ballot that give Councilmembers the option to bring this up. Susie Swales suggested that the two new Councilmembers go back through the public record and familiarize themselves with the process rather than paying $25,000 for an outside opinion. Madeline said the people have spoken and things have passed. Madeline said Council is turning the city upside down and turning everybody against everybody. Madeline said there are plenty of problems than have to be taken care of. Terry Butler said the community wants to get on with their lives and put this project behind them. The city has been meeting for years on this project. Saul Barnett said there is a lawsuit on file that names the city as a defendant. Barnett said if the plaintiffs pursue this and are successful because a process of the city's was improper, the city would be faced with an enormous amount of damages because the applicant will be working on the project and will have been relying on approvals the city gave. Harvey said the motion was broadened to also cover all aspects of the PUD approvals and of the PUD agreement. Harvey said it is appropriate that the city seek outside counsel on the pending lawsuits, but to have an opinion rendered about every aspect of a legally binding contract, certain aspects of which are the applicants requirements, is an inappropriate use of time and money. Mayor Stirling said when the lawsuits are examined, this may raise other issues and he would like the attorney to follow those. Mayor Stirling said the election last fall served an important purpose. Mayor Stirling said he feels there was a lot of confusion about the issues and the way they were articulated. Mayor Stirling said he puts a lot of credence in the ballot box. Mayor Stirling said it is important to clear the air sooner rather than later, and the special counsel will assist both sides. The additional information should be sufficient for Council to determine whether there is going to be any other actions related to the lawsuits. Mayor Stirling said the city needs to keep the dialogue open with the 5 Special Meetinct Aspen City Council June 14, 1989 applicants. Mayor Stirling said he feels this expense will be worthwhile for the citizens. All in favor, with the exception of Councilman Tuite. Motion carried. Meeting was adjourned at 4:15 p.m. ,~'~- J Kathryn Koch, City Clerk 6 Continued Meeting Aspen City Council June 14. 1989 ORDINANCE #24, SERIES OF 1989 - Creating RMF/A Zone 1 ORDINANCE #25, SERIES OF 1989 - Creating R-30/A Zone 2 ORDINANCE #26, SERIES OF 1989 - Zoning Lower Smuggler Annexa- tion 2 CITY ATTORNEY 4 CASTLERIDGE RE PORT 5 COUNCIL GOALS SESSION 6 SAVANAH (ASPEN MOUNTAIN LODGE) REQUEST FOR LETTER OF CREDIT 7 CEMETERY LANE DUPLEX .! 9 ORDINANCE #32, SERIES OF 1989 - Historic Designations 9 ORDINANCE #33, SERIES OF 1989 - Rezoning Block 19 10 ORDINANCE #34, SERIES O F 1989 - Rezoning Lot M, Block 24, Mountain Rescue 10 12 Mayor Stirling called the meeting to order at 5:00 p.m. with Councilmembers Tuite, Crockett, Peters and Gassman present. ORDINANCE #24, SERIES OF 1989 - Creating RMF/A Zone Tom Baker, planning office, reminded Council at the last meeting, it was determined the Moran and Mocklin parcels should be zoned R-15A; that rezoning to RMF/A would be considered in the context of a development plan. The Oden and Cowee area should be zoned R-15/A/PUD; the community center should be zoned Public; Lone Pine, Hunter Longhouse, Hunter Creek and Mountain View should be zoned RMF/A and Centennial should be zoned RMF/A/PUD. Baker reminded Council there was discussion about zoning of the Friedberg area. Staff originally recommended this area should be zoned R-30/A, which would prohibit duplexes . This was the request of the property owners. Council asked if it is wise to create a new zone district to prohibit a use allowed in every other zone district. Baker said staff agrees with Council's comments. Baker said Ordinance #24 creates the RMF/A zone district. P & Z and staff are recommending approval of this ordinance. Baker said duplexes will be a conditional use. Mayor Stirling opened the public hearing. Jane Ellen Hamilton, representing Lone Pine homeowners association, said the homeowners have not received a deed to the common open space, which would enable them to use that land to calculate the FAR. Ms. Hamilton said if they can get this deed, they will be conforming with the zone. Ms. Hamilton said it is not the intent of the city to make Lone Pine non-conforming. Ms. Hamilton suggested language in Ordinance #26 stating it is not the city's intention to create a non-conformity. Baker said he does not feel it appropriate to put that language into an ordinance. Baker suggested increasing the FAR 2/100 of a percent for Lone Pine, which would take care of Lone Pine whether or not the common open space is included with the free market units. Baker said another alternative is to zone this at .38 FAR, and if this does not work, there is a process that can be gone through by the property owners . Ms. Hamilton told Council some of the decks at Lone Pine are leaking very badly and some owners need to enclose the decks, which would increase the FAR. Mayor Stirling closed the public hearing. Councilman Gassman moved to adopt Ordinance #24, Series of 1989, amending the ordinance by eliminating item 2 on page 2; seconded by Councilman Tuite. Roll call vote; Councilmembers Peters, yes; 1 Continued Meeting Aspen City Council June 14, 1989 Crockett, yes; Tuite, yes; Gassman, yes; Mayor Stirling, yes. Motion carried. ORDINANCE #25, SERIES OF 1989 - Creating R-30/A Zone Mayor Stirling opened the public hearing. Tom Baker, planning office, said this ordinance prohibits duplexes. Baker said based on comments at the first reading and subsequent staff analysis, staff is suggesting this ordinance be denied. Councilman Gassman moved to deny Ordinance #25, Series of 1989; seconded by Councilman Peters. All in favor, motion carried. ORDINANCE #26, SERIES OF 1989 - Zoning Lower Smuggler Annexation Tom Baker, planning office, told Council the recommended zoning is R-30 for the Friedberg area; Oden/Cowee area R-15A; Community Center public; Lone Pine, Hunter Longhouse, Hunter Creek, Mountain View, RMF/A; Mocklin and Moran, R-15/A; Centennial RMF/A/PUD. Mayor Stirling opened the public hearing. Jim Moran said he owns 1.2 acre in this area. Moran presented a map illustrating the density and character of the neighborhood. Moran showed the original line demarcating the difference between R-15 and R-30. Moran said Hunter Creek has 295 units on 18.4 acres or 16 units per acre. Centennial has 240 units on 17 acres or 14 units per acre. The Mountain View area has been approved for 8 units. Moran said this entire area is proposed to be zoned RMF/A. Moran told Council he has a single family dwelling on his parcel. Moran said his parcel is surrounded by multi-family residences. Moran told Council P & Z accepted this and said the Moran parcel should be zoned RMF/A. Moran said Ordinance #26 does not follow the P & Z recommendation but staff's recommendation of R-15 zoning. Moran requested the zoning by changed to RMF/A for his parcel. Moran said the staff has recommended R-15 as the city would have more control if the Morans had to come back and ask for rezoning. Moran said this is not planning. Moran said this is creation of spot zoning. Moran said this is legislation that does not meet the test of good legislation; it is vague, indefinite, uncertain and discriminatory. Moran said this does not treat citizens who are similarly situated in the same fashion. Moran said there are 7 pages of RMF/A zoning that regulates use, density, minimum lot size, building area, setbacks, etc. Moran said the city is saying that RMF/A zoning is adequate to accommodate and control the 543 units on 36.5 acres surrounding the Moran tract but it might not provide enough control for the 1.2 acres. 2 Continued Meeting Aspen City Council June 14, 1989 Moran said this recommendation is creating a holding zone for his property and asking the Morans to come in with a development proposal at some time in the future. Moran said there is an invasion of privacy with Centennial placed near his lot, which creates a less desirable area. Moran questioned the city preserv- ing all options on his 1.2 acres. Mayor Stirling asked if Moran requested a change in zoning under the county zoning. Moran said he had not because this is the appropriate time to request a different zone category. Moran said the zoning around him has been changed by governmental action to accommodate affordable housing, and that has changed the character of the neighborhood. Moran said zoning should be determined on what the master plan says. Moran pointed out the 1966 master plan says this area is residential/high density. The characteristic of the neighborhood is now multi- family/high density. Councilman Gassman said Moran makes an excellent case for why this should be rezoned. Councilman Gassman said one of the principles Council came up with during annexation is that they were not going to rezone property by annexation, that the city would take land into the city in the same condition it was in the county. Councilman Gassman said Council should rely on the land use procedures for rezoning to get all the assurances that the rezoning is appropriate. Mayor Stirling said he supported this on first reading because the zoning was consistent with that of the county. Mayor Stirling said the other issue is what is can be developed at a time when the city is trying to reassess the whole community. Councilman Peters said the preponderance of the build out in this area is affordable housing, which is the logic that drove that density. Councilman Peters said rezoning this to RMF/A would be rezoning in the absence of a development application and a master plan. Councilman Peters said there is a not a zone district that fits Moran's property. Mayor Stirling said this property is surrounded on the north with properties that are much the same as Moran's and not any multi- family. Councilman Crockett said he is concerned about the precedent this request would set for other property owners. Moran said there has historically been a boundary line of zoning between his property and those to the north. Moran pointed out that the properties to the north of his parcel are sufficiently far enough that they are not surrounded by the high density. Councilman Crockett said he would like to retain as many options and flexibility to obtain the goal of getting more employee housing in the zoning of this area. Councilman Tuite asked if Council would consider processing this parcel under a new affordable housing zone, rather than have the applicant do it. Mayor Stirling and Councilman Gassman said they would be interested in sponsoring that zoning. 3 Continued Meeting Aspen City Council June 14, 1989 Peter Mocklin told Council his property, too, is surrounded by Lone Pine and Hunter Creek properties. Mocklin said he has an eight unit apartment building on his property. Mocklin said it is a handicap for him to be zoned R-15A. Mocklin told Council he applied for different zoning in the county. Mocklin told Council he talked to the planning office, and they indicated they were in favor of RMF zoning for this parcel. Mocklin said he was assured the Council would go along with the zoning recommended by the staff. Fred Gannett, city attorney's office, told Council this parcel started in the annexation parcel with the Lone Pine, which was done on request. This was superceded by the annexation election, which took some of the previous discussions away because there was no longer a petition by 51 percent of the owners. Baker said the original recommendation from P & Z included RMF zoning for Williams and the Mocklin parcel. P & Z accepted the Mocklin RMF recommendation and R-6 for the Williams. Staff then looked at this again and recommended the Mocklin parcel by zoned R-15/A. Councilman Tuite moved to zone the Mocklin and Moran properties RMF/A. Motion DIES FOR lack of a second Councilman Peters moved to adopt Ordinance #26, Series of 1989, as amended on second reading; seconded by Councilman Crockett. Roll call vote; Councilmembers Crockett, yes; Gassman, yes; Peters, yes; Tuite, yes; Mayor Stirling,- yes. Motion carried. Councilman Tuite moved that should the applicants desire, the city will sponsor the upgrading to AFA; seconded by Councilman Peters. All in favor, motion carried. CITY ATTORNEY Councilman Peters moved to accept the resignation of Paul Taddune and Associates; seconded by Councilman Gassman. All in favor, motion carried. Paul Taddune told Council there are a few cases and city issues that his firm is till working on. Taddune said the Kona Post case will probably be settled in the next few weeks. Councilman Tuite moved to continue to keep these cases where they are as outlined in the June 8 memo with the staff attorney coordinating them; seconded by Councilman Crockett. All in favor, motion carried. Councilman Crockett said he would like an in-house full time city attorney as opposed to contracting it out. Councilman Crockett 4 Continued Meeting Aspen City Council June 14L 1989 moved that the city seek and hire a full time city attorney; seconded by Councilman Peters. Councilman Crockett said he would like to develop a task force and develop some criteria to find the applicants, have them short listed and brought to Council for consideration. Mayor Stirling and Councilman Peters said they will put together the approach for hiring a city attorney and report back to Council by June 26. All in favor, motion carried. Fred Gannett, city attorney's office, said he is willing to continue on as staff attorney subject to renegotiation of his contract. Gannett said he would prefer to discuss this in executive session with the Council. Councilman Peters moved to begin to proceed with negotiations to retain Gannett over the next 60 to 90 days; seconded by Councilman Crockett. Councilman Tuite said he would rather have Council reject Gannett' s resignation and have him continue on as staff attorney. Council agreed. Councilman Peters withdrew his motion. Councilman Tuite moved to reject Fred Gannett's resignation; seconded by Councilman Crockett. All in favor, motion carried. Councilman Gassman moved to go into executive session to discuss Gannett's compensation in the interim period; seconded by Council- man Crockett. Mary Martin expressed thanks to Paul Taddune and Fred Gannett for being honest and sincere with the citizens. Bob Gish said the building department receives a lot of help from Fred Gannett. Jane Ellen Hamilton said Fred has been a real joy to work with, has been bright and responsive. All in favor, with the exception of Mayor Stirling. Motion carried. CASTLERIDGE REPORT Mayor Stirling said Council met with a number of residents from Castleridge and has some recommendations to staff to follow this up. Mayor Stirling moved that Council authorize the city manager to (1) have the legal staff analyze all the documents, the existing agreements, the leases, in order to determine issues related to 5 Continued Meeting Aspen City Council June 14, 1989 notice with the specific goal of trying to get an extension for 30 days to August 1st for the renewal of the lease; ( 2 ) try to find out what it will take to accomplish some of those goals; (3) bring to Council the possibility of auditing the P & L in order to get a better handle on what the expenses and costs are; (4) to designate clearly someone who will follow up all the issues of tenant complaints, the issues of whatever agreements are in effect; (5 ) the issue of the redistribution of the rents and analysis of that because some are beyond the limits of the agreement; (6) to begin to open up the discussion with the owners of the property of where to go from here; seconded by Councilman Tuite. Councilman Peters asked if renegotiating the contract and what the city can do to get the project back are part of this motion. Mayor Stirling said these are implied in the motion. Mayor Stirling said he wants all the documents submitted by residents to be analyzed as well. Sharon Newman, former Castleridge resident, said the housing authority has not lived up to its bargain. Ms. Newman said she thought certain things were accomplished, and the housing office has said they have nothing to do with Castleridge. Councilman Crockett said he had asked that the tenants try to come to consensus on a distribution formula. Councilman Crockett said he would like included in the review of all this that the tenants have the opportunity to give their input. Mayor Stirling said staff should notify Tom Lacy of this action and send it to him in writing. Lee Fisher, 8 year Castleridge resident, told Council his roof has leaked for 8 years. For the last 3 years, the management has been saying they would put a new roof on. Fisher said the landscaping is very poor. Bruce asked if the leases and rents will be frozen. Mayor Stirling said the Council cannot do that; this will be reported on at the June 26th meeting. John Harrison said one thing the city should look at is how much rent raising there should be. Most employees do not have exponential raises in their income. Sharon Newman asked if the residents will have to come back every years to fight rent increases. Mayor Stirling said this will come out of staff's report. Mayor Stirling said there should be one staff person to be the point person for the next 45 days so that tenants will have a place to call. Anderson said he will find out if the city can negotiate an extension on the rent increases by the June 26th meeting. Lisa said she hopes there is a limit on the rents and the project stays employee housing. All in favor, motion carried. COUNCIL GOALS SESSION 6 Continued Meeting Aspen City Council June 14, 1989 Councilman Crockett reported this is scheduled to start Friday, June 16 at 6 p.m. at the Molly Gibson, continuing Saturday morning at 8 a.m. Jim Kent will be the facilitator. He has been given a list of things Council wants addressed, like team building, consensus building, group dynamics, goal building, and developing a legislative agenda. This will be open to the public and the press as observers only. SAVANAH (ASPEN MOUNTAIN LODGE) REQUEST FOR LETTER OF CREDIT John Sarpa, representing the applicant, reminded Council at the last meeting they requested additional outside review to look at more details on this letter of credit. Sarpa said the PUD agreement states the applicants have the right to substitute this type of document and Council has the right to review it. Staff has reviewed the letter of credit and concurs it meets the require- ments. Joe Barrows, city's financial advisor, told Council letters of credit when used for municipal purposes permit the government to make immediate and unconditional demand for cash pursuant to the terms within the letter of credit. As long as the letter of credit states how this can occur, the bank has no recourse other than to release the funds. Barrows said his concern regarding the bank was the letter of credit exceeded the bank's lending limits. Barrows said the bank is part of a group of banks, which have sufficient lending capability. Councilman Gassman asked under what conditions could the bank refuse. Barrows said they are specified in the letter and the only reason they could refuse were if the signature were not the ones required. Barrows said this is a straightforward letter in terms of the conditions that the bank must meet. Councilman Peters asked if the letter of credit depends at all on the PUD agreement which spells out why the letter of credit it is posted and for what purposes it is to be used; is the PUD agreement a central part of the ability to draw on the letter of credit. Barrows said he only looked at this for form, grid if it was consistent with letters of credit. Councilman Crockett asked if this should be included in the review by the city's special counsel. Mayor Stirling said this is separate and a decision Council can make. Sarpa said there is a current valid contract between the city and the applicant. Perry Harvey said there is $1,800,000 in escrow with the city that is conditioned on acts and obligations of the PUD. Councilman Peters asked if the ability to draw on the letter of credit is predicated on the wholeness of the PUD agreement and would a deficiency therewith cause a problem of the city to withdraw on the letter of credit. Gannett said the PUD agreement specifies the mechanism by which financial assurances were guaranteed. The letter of credit is an independent contract between the bank and the city, 7 Continued Meeting Aspen City Council June 14, 1989 guaranteeing the city may draw on the letter of credit if there are conditions of default that occur. Gannett said if the PUD agreement were determined to be an invalid document, this could raise an issue as to what the conditions of default are as a triggering mechanism for the letter of credit. Gannett said it may be possible to insert language in the letter of credit to make it stand more independently. Sarpa told Council at the time of this bond, they chose to post almost $2,000,000 cash as an indication of their commitment to the project and with the realization they had the right to replace the cash with a letter of credit. Harvey said if the PUD document is invalid, the applicant's commitments to perform certain physical improvements guaranteed by this money is also invalid. There would be no default because there would be no obligation. Gannett said the PUD agreement is a negotiated contract between the developer and the city with respect to development rights. It is not a unilateral attempt on the city to impose conditions on private property, such as culverting ditches. Gannett said staff has looked at the issue of placing burdens on private property and has determined that application of the Charter provision is not applicable with respect to negotiated PUD or subdivision agree- ments. Councilman Crockett asked if this is an independent contract separated from the PUD or is it associated with the PUD and something the city's special counsel needs to look at. Gannett said they are severable issues. A letter of credit is used with many developers. The form of this letter of credit is consistent with those used in other developments. Gannett said this is tied to the PUD agreement because the agreement defines the default trigger. Lennie Oates, representing the applicant, said the letter of credit stands on its own and the bank has no right to look behind the conditions of the letter of credit. Mayor Stirling said there has never been a project of this size in the city. Sarpa said the applicants have a right to replace cash with a letter of credit. Mayor Stirling asked if the money is drawn out, will it be used on the project here. Sarpa said it is cash that will go into this community. Sarpa said they have a lot of projects in a lot of cities, and they generate their funds as much as they can from the Aspen properties. Gannett suggested taking Joe Barrows recommendations, which is there are circum- stances that the bank faces, if additional monies are lent out, the city be notified so that the city has further assurances and security. Councilman Peters moved to accept the substitution of a letter of credit for the cash bond with the condition that the criteria for drawing of the cash be brought forward into the letter of credit 8 Continued Meeting Aspen City Council June 14, 1989 to create a more of a stand alone document; seconded by Councilman Gassman. Harvey said the escrow instructions, which outline those, are an attachment to the letter of credit. Gannett said he can take Council's direction and incorporate them so they are acceptable to the city, applicant and the bank. Councilman Tuite asked if this would be limiting the city. Gannett said these could be words of limitation, but if the words are parallel to the PUD agreement, this would not be hurting the city. Oates said he thinks the city is tying itself down. The letter of credit makes it clear that the draw shall be attached to a letter from the city executed by the city manager stating that, "There exists a default under the terms of either paragraphs 1 or 2 or both of section B of first amended restated PUD agreement, subdivision agreement, Aspen Mountain Subdivision which default entitles the city of Aspen to draw upon this letter of credit. The letter shall set forth the nature and extent of the default which entitles the city to drawn upon this letter of credit". Oates said once the city gives the bank this letter, the bank has no discretion, they have to give the city the money. Mayor Stirling said he feels it is important to scrutinize this issue. All in favor, motion carried. CEMETERY LANE DUPLEX Paul Taddune said he wou property pursuant to the said he can be into a new needs to close on the city approximate price of the Anderson told Council th price. One component of until closing. Anderson written notification they the city doesn't exercise some city employee. Ld like to have the city purchase this purchase and option agreement. Taddune house by September 1st. Taddune said he house by September 1. Taddune said the house is $208,000. City Manager Bob finance department is working on the the purchase price is the cpi index up said the city has 60 days to respond with want to buy the house. Anderson said if their option, this can be transferred to Mayor Stirling moved the city agree to buy the house from Paul Taddune on whatever basis the city decides to generate the cash before September 1, the Council will proceed to follow up this on whatever basis they decide; this will require cash out of the fund balance; seconded by Councilman Gassman. All in favor, motion carried. ORDINANCE #32, SERIES OF 1989 - Historic Designations Councilman Gassman moved to read Ordinance #32, Series of 1989; seconded by Councilman Crockett. All in favor, motion carried. 9 Continued Meeting Aspen City Council June 14, 1989 .ORDINANCE #32 (Series of 1989) AN ORDINANCE DESIGNATING 514 NORTH THIRD STREET AND 1004 EAST DURANT STREET, #1 AS H, HISTORIC LANDMARK PURSUANT TO DIVISION 7, SECTION 7-701 OF THE LAND USE CODE was read by the city clerk Councilman Gassman moved to adopt Ordinance #32, Series of 1989, on first reading; seconded by Councilman Tuite. Roll call vote; Councilmembers Crockett, yes; Peters, yes; Gassman, yes; Tuite, yes; Mayor Stirling, yes. Motion carried. ORDINANCE #33, SERIES OF 1989 - Rezoning Block 19 Councilman Gassman moved to read Ordinance #33, Series of 1989; seconded by Councilman Tuite. All in favor, motion carried. ORDINANCE #33 (Series of 1989) AN ORDINANCE ZONING LOTS K,L,M,N, OF BLOCK 19, CITY AND TOWNSITE OF ASPEN FROM R-15 TO R-6 was read by the city clerk Councilman Crockett moved to adopt Ordinance #33, Series of 1989, on first reading; seconded by Councilman Tuite. Roll call vote; Councilmembers Peters, yes; Tuite, yes; Crockett, yes; Gassman, yes; Mayor Stirling, yes. Motion carried. ORDINANCE #34, SERIES OF 1989 - Rezoning Lot M, Block 24, Mountain Rescue Councilman Tuite moved to read Ordinance #34, Series of 1989; seconded by Councilman Peters. All in favor, motion carried. ORDINANCE #34 (Series of 1989) AN ORDINANCE OF THE ASPEN CITY COUNCIL REZONING LOT M OF BLOCK 24, CITY AND TOWNSITE OF ASPEN FROM OFFICE TO PUBLIC was read by the city clerk Councilman Peters moved to adopt Ordinance #34, Series of 1989, on first reading; seconded by Councilman Crockett. Roll call vote; Councilmembers Gassman, yep; Tuite, yes; Crockett, yes; Peters, yes; Mayor Stirling, yes. Motion carried. 10 Continued Meetinq Aspen City Council June 14, 1989 Council went into executive session at 8:00 and returned to meeting at 8:10. Mayor Stirling moved to give Fred Gannett $48,000 for 90 days; seconded by Councilman Peters. All in favor, motion carried. Council adjourned at 8:11 p.m. ~i ~/y u~ Kathryn Koch, City Clerk 11