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Home My WebLink Aboutminutes.council.19911226December 23, 1991 Pursuant to Section 4.2 of the Charter of the City of Aspen, I hereby request a special Council meeting Monday December 26, 1991, to discuss: I. Ordinance #50, 1991, Authorizing Long Term Installment Payments and Note for Nelson/Devore Land Purchase II. Resolution #53, 1991 - Extending the 1990 Affordable Housing Guidelines ~T - l1 J n S. Bennett Mayor ~~ (~'- cat en 130 Asp December 23, 1991 NOTICE OF SPECIAL MEETING At the request of Mayor Bennett there will be a special City Council meeting Thursday, December 26, 1991 at 5:00 p.m. in the City Council Chambers, City Hall 130 South Galena, Aspen, Colorado. The agenda for this meeting will be: I. Ordinance #50, 1991, Authorizing Long Term Installment Payments and Note for Nelson/Devore Land Purchase II. Resolution #53, 1991, Extending the 1990 Affordable Housing Guidelines /~' ~~ Kathryn Koch, City Clerk Notices delivered to: Mayor Bennett Councilmembers Augie Reno Frank Peters Margot Pendleton Rachel Richards City Manager Margerum City Attorney Caswall ~~ recycled paper cat 130 Asp ~,~. ~ en t~~treet :611 December 23, 1991 NOTICE OF SPECIAL MEETING At the request of Mayor Bennett there will be a special City Council meeting Thursday, December 26, 1991 at 5:00 p.m. in the City Council Chambers, City Hall 130 South Galena, Aspen, Colorado. The agenda for this meeting will be: I. Ordinance X50, 1991, Authorizing Long Term Installment Payments and Note for Nelson/Devore Land Purchase ~'~ -fib ~) ~~ ~,~~~ -~~~ c~~ II. Resolution X53, 1991, E~:tending the 1990 Affordable Housing Guidelines O~ ~~~ ,-- Kathr n Koch ~ ,- _~~ y C_ty Cle~ k -~ ~ -~,~. ~ ~ ~. ,; Notices delivered to : ` r ~' "~~~~` ~' ~ ~ ~~' -' ~'"'~"~ ~ ~ Mayor Bennett ` ~- ~-~ S Councilmembers Augie Reno Frank Peters Margot Pendleton Rachel Richards City Manager Margerum City Attorney Caswall ~~ ~~ ~? /~ - ~ _ _ ~ ,~- ~> ~ecvUed paper S ecial Meetin As en Cit Council December 26 1991 Mayor Bennett called the meeting to order at 5:15 p.m. with Councilmembers Richards, Pendleton, and Peters present. Jed Caswall, city attorney, requested Council suspend the rules and add 3 items to the agenda; (1) approval of a streets department contract for a self-propelled articulated roller; (2) Resolution #56, Series of 1991, authorizing the city to assign the Nelson Devore purchase contract to the sister cities housing corporation, and (3) renewals of Clark's Market liquor license. Councilman Peters moved to suspend the rules and add these to the agenda; seconded by Councilwoman Pendleton. All in favor, motion carried. ORDINANCE #50, SERIES OF 1991 - Authorizing Long Term Installment Payments and Note for Nelson/Devore Land Purchase Jed Caswall, city attorney, pointed out the finalized agreement is attached to the ordinance. Mayor Bennett opened the public hearing. There were no comments. Mayor Bennett closed the public hearing. Councilman Peters moved to adopt Ordinance #50, Series of 1991; seconded by Councilwoman Pendleton. Roll call vote; Councilmembers Richards, yes; Pendleton, yes; Peters, yes; Mayor Bennett, yes. Motion carried. RESOLUTION #56, SERIES OF 1991 - Assigning Nelson/Devore purchase contract Jed Caswall, city attorney, told Council staff entered into negotiations with the Sister City Housing Inc., a non-profit corporation comprised of this Council and Shimakappu Council. The corporation has agreed to take on the responsibility to develop the property to AH. The corporation has agreed to give promissory notes in favor of the city and the city of Shimakappu securing and promising to pay back the respective cities their investment. The plan is for the non-profit corporation to develop the property. When the affordable housing units are constructed, the city will recover its financing commitment through the sale of those units. Councilman Peters moved to approve Resolution #56, Series of 1991; seconded by Councilwoman Richards. All in favor, motion carried. RESOLUTION #53~, SERIES OF 1991 - Extending the 1990 Affordable Housing Guidelines 1 Special Meeting Aspen City Council December 26, 1991 Jim Curtis, housing board, told Council he was a minority vote on the housing board but will represent the majority position to Council. On December 13 a comparable resolution was adopted by the County Commissioners. Tom Smith, legal counsel for the Housing Board, noted the references to the cpi over the 10 year period compared to allowable rent increases at Centennial during the same period and also by comparison of the actual square foot rents at Centennial as compared to other projects. These figures are self- explanatory. Smith said the recommendation for 0 percent rent increase does not abrogate any existing agreement. Smith pointed out Mark Rosco's letter to Council states the provision in the disposition and development agreement of Centenni- al relative to rents was superseded by Resolution 84-32. That document states that the provision for rents and increases was based upon urban index and goes into effect only if there is no action in the preceding year to adopt guidelines. The guidelines always include some provision about rent increases. The resolution does not state that a minimum rent increase of X amount, whether by reference to urban wage index or other, is guaranteed. The fall provision kicks in if guidelines are not enacted. Smith noted 0 percent increases were applicable in 1978, 1979, 1980, 1981, 1982, all years preceding this county resolution. In 1986, 1987 and 1988 0 percent was similarly the provision. Smith stated no assumption could be made by anyone there would be enacted a rent increase to cover inflation since in most years this did not happen. Smith said the policy behind rents is not just to insure an increase for the benefit of the landlord but to make sure that employee housing stays affordable. Smith said these two considerations were taken into account in many years when 0 percent was set. Smith said if a developer felt there should be assurances on rent increases, this should have been put in the resolution. This resolution was never contested. Smith said on the discrimination issue, in Resolution 84-32, Centennial has been the beneficiary of discrimination, if there was such a thing. Increases of 62 percent, as compared to 16 percent under applicable guidelines, have been given to Centennial at the request of the developer because of concern about the completion of the project. Smith told Council the contractor who was to provide pre-fab housing for Centennial went into bankruptcy and a stick built project, at increased costs, had to be undertaken. Smith said there was no contemplation of perpetual rent increases since the purpose was the cost of completion. Smith said regarding a statute precluding rent controls in Colorado, this does not supersede the county's resolution, which was acted upon and relied upon by both county and the developer. The statute says it does not apply so as to impair the right of any county or municipality to manage and control any property in which it has an interest. Smith said by virtue of the deed restrictions on the project, the 2 Special Meeting Aspen City Council December 26, 1991 PMH zoning that was approved and the condition of approval, such an interest does exist. Smith said the wisdom of 0 percent increase is a policy matter up to Council. From a legal standpoint, Smith said he has no problem with what was recommended. Curtis told Council if they take no action on this resolution, there would be an automatic 3.8 percent increase at Centennial. The housing authority considered 3 points; the overriding point being affordability and how present rents compare with the present guidelines. Curtis pointed out there have been major rent increases at Centennial 62 percent versus 16 percent set forth in the guidelines over the same period. The housing authority asked staff to look at this over the longer term. The staff looked at the cpi over a 10 year period, which would suggest cumulative rent increases of between 18 and 24 percent; other private properties have been permitted to go up 2 5 percent . There is a precedence f or 0 rent increase as several years in the past there was 0 rent increase. Curtis told Council he voted against this because of the timing. Curtis said he thought this was taken care of last spring. Curtis said he feels there is an out of sync relationship between private and public projects. Curtis said Centennial has always been determined by contract and he does not equate this with other private rental units. Centennial received heavy subsidies in the initial start up. The intent was not to see that the subsidies continue. Councilman Peters said no one property should determine public policy city and county-wide. Councilman Peters said he looked at staff recommendation, methodology and history. These all yield about 2 to 2.5 percent average rent increases and there was precedence for the 0 percent increase. Councilman Peters said Sam Brown, the owner of Centennial contacted him. Brown has issues he needs to deal with and the city and county should meet and discuss how to deal with these issues. Councilman Peters said is not relevant to a policy which will apply to hundreds of unit in the community. Councilwoman Richards said if Centennial is central to this discussion, there is a lot more information Council needs. Councilwoman Richards said she is not uncomfortable with a 0 percent increase for units throughout the community. These units are not supposed to be driven by the market or by cpi but are supposed to be carried by the commercial components to their creation. Councilwoman Richards said she cannot go along with having the renters carry the financial burden. Mayor Bennett said Centennial started of f at a lower base rate than they could have. The developer is losing money on Centennial. 3 Sbecial Meeting Aspen City Council December 26, 1991 Mayor Bennett said he is irritated that this has come to the Council the very last minute and Council is left by the housing authority with little choice. Mayor Bennett questioned why it takes to December 26th to do the 1991 guidelines. Mayor Bennett said the EPA has cost Brown over $300,000. The land the county gave Brown had strings attached. There were also delays in the Centennial project caused by the city. Mayor Bennett said he will vote for the guidelines because there is little choice; however, he does not like the information given by the housing authority staff . Councilman Peters said the housing guidelines are legitimate policy that has been in effect for 10 years . There will be new guidelines reviewed and adopted in 1992 which may allow a rent increase at Centennial. Councilman Peters said there may be ways for the city and county to work with Centennial to lower their costs. Mayor Bennett asked how the average rents at Centennial compare with the guidelines. Curtis said the Centennial has two categories; low and moderate. Centennial rents are higher than both categories allowed. Councilwoman Richards said Council has no control over wage increases; however, they do have control over rent increases. Councilwoman Richards moved to adopt Resolution #53, Series of 1991; seconded by Councilman Peters. All in favor, motion carried. Jed Caswall, city attorney, entered the following into the record: letter dated December 23, 1991, addressed to Council on Centennial Aspen letterhead signed by Sam Brown; a letter from Arnold and Porter written on behalf of Mr. Brown's partnership dated December 23, 1991; a letter addressed to John Bennett dated December 26, 1991; a letter from Mr. Brown on Centennial Aspen letterhead addressed to Carr Kunze dated December 16, 1991. All of these documents have been previously received by Council. Councilman Peters said rents are too high. Councilman Peters said he would like to have on outside agent, like Jonathan Rose, look at Centennial financing, operating costs and give some suggestions on how these could be mitigated. Councilwoman Richards said she would like to hear county input on this. Mayor Bennett encouraged Council to sit down with Sam Brown and see what the city can do to help get him out of his bind. All in favor, motion carried. LI UOR LICENSE RENEWAL - Clark's Market Councilman Peters moved to renewal Clark's Market 3.2 beer license; seconded by Councilwoman Richards. All in favor, motion carried. CONTRACT APPROVAL - Self-propelled Articulated Roller 4 Special Meeting Aspen City Council December 26, 1991 Bill Efting, assistant to the city manager, told Council this contract is for an asphalt roller. It was budgeted for in 1991. Councilman Peters moved to refer this to the city manager; if she approves, Council concurs; seconded by Councilwoman Richards. All in favor, motion carried. Councilwoman Pendleton moved to adjourn at 6:20 p.m.; seconded by Councilman Peters. All in favor, motion carried. r~ Kathryn Koch, City erk 5