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HomeMy WebLinkAboutresolution.apz.013-79 RESOLUTION OF THE ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING APPROVAL OF THE CONDOMINIUMIZATION OF THE TIPPLE LODGE Resolution No. 79- /~ WHEREAS, the owners of the Tipple Lodge which is located in the Lodge zone district have filed an application which requests subdivision exemption for the condominiumization of said lodge, and WHEREAS, the Planning and Zoning Commission has heard evidence of the trend among particularly affluent condominium owners to remove their units from the short term rental market and the Commission feels that it is imperative that all units in the Lodge zone continue to be available for short term occupancy, and WHEREAS, the Commission is concerned that condominiumization would result in an undesirable change in the character of the Lodge zones by the elimination of the personal touch of a wide range of on-site rental and management services, and WHEREAS, the attorney for the applicant has drafted an "Agreement and Restrictive Covenants" documents which addresses the Commission's concerns and is incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED that the Planning and Zoning Commission of the City of Aspen does hereby recommend approval of the subdivision exemption for the condominiumization of the Tipple Lodge subject to the recording of the attached "Agreement and Restrictive Covenants" in a form satisfactory to the City Attorney. Adopted this 21st day of August, 1979 by the Aspen Planning and Zoning Commission. ATTEST: Sheryl Simmen, Deputy City Clerk APPROVED AS TO FORM AND SUBSTANCE Olaf Hedstrom, Chairman Aspen Planning and Zoning Commission Ron Stock, City Attorney DR- ONLY AGREEMENT AND R~STRICTIVE COVENANT 1. Parties. The parties to this agreement and covenant are the City of Aspen, a municipal corporation, ("City"), and the Tipple Lodge, a joint venture, ("Tipple"), owner,of the s%~ject property. 2. Subject property. The subject property Of this agreement and covenant is located in the City of Aspen, in Pitkin County, Colorado, and is more particularly described as: Lot 2, Tipple Woods Subdivision, according to the plat thereof recorded in Ditch Book 2A at Page 250 of the ~ecords of Pitkin County, Colorado. 3. Recitations. The subject property is improved with a three'story building containing ten lodge units, (i.e., units having one bedroom, one bathroom and nC kitchen facilities, intended for the temporary occupancy of tenants, owners and guests), two residential studio apartments, and non-dwelling areas. The City desires that all lodge units in Aspen remain without kitchens and remain in use as temporary accommodations, and, more specifically, that lodge units in Aspen not be converted to residential dwelling units without review and approval pursuant to the Growth Management Plan contained in the Municipal Code of the City of Aspen. Further, the City desires that all existing lodge units be made available to the general public as short-term accommodations during the winter and summer tourist seasons in the City of Aspen, with reasonable short occupancy by owners and their guests during the said seasons. Tipple desires City approval to convert its single ownership of the subject property into condominium ownership, to wit, ten lodge units, two residential studio apartment units, and common elements, for sale to separate persons. Tipple and the City agree to encumber the subject property to restrict use by subsequent owners of lodge units held in condominium ownership to uses consistent with the desires of the City stated above, as the condition 7 of City approval to condominiumize the subject property. 4. Restriction of owner usage. In this paragraph, "owner usage" shall mean: (a) occupancy of a unit by the owner or non-paying guests of the owner, or (b) taking the unit off the rental market during prime tourist rental periods for any reason other than necessary repairs which cannot be postponed or which make the unit unrentable. In this paragraph, "prime tourist rental periodsT shall mean: (a) winter, December 15 through March 31, and (b) summer, July and August. It is mutually agreed by the parties hereto and their successors, heirs, personal representatives and assigns, that owner usage of any condominium lodge unit on the subject property shall not exceed a total of thirty (30) nights per calendar year during the prime tourist rental periods; that owner usage is not restricted at other times of the year; and, that at times other th~n owner usage during the prime tourist rental periods the unit shall be available for rental,not to exceed thirty (30) days for any one tenant or group of tenants during the winter prime tourist rental period, but without such tenant length of stay restriction in the summer prime tourist rental period. It is further agreed that all conveyances of lodge units on the subject property by Tipple, its successors and assigns shall contain a reference to the restriction set forth herein; and that the restrictions of this paragraph shall be construed as covenants running with the land for the benefit of the City of Aspen. The restrictions of this agreement and covenant and this paragraph in particular shall not apply to the subject property unless condominiumized pursuant to this agreement and in con- sideration for the encumbrance granted hereby, nor shall the restrictions apply to the subject property or condominium units created from it while such are owned by Tipple. 5. Abrogation, waiver and modification. Nothing herein shall preclude an application by Tipple or any owner of the subject property or condominium unit created out of it, from proceeding under any provision of the Municipal Code of the City of Aspen for change in physical structure or use of the subject property or any portion thereof, including the condominium unit of any individual owner. If such a change of structure and/or use is granted, the granting authority shall have the authority by written instrument in the name and for the City (such authority being hereby granted) to abrogate, waive and/or decrease any restriction contained herein t6 permit the change in structure and/or use it approved, with respect to the subject property or any portion thereof. .shall, retain Guest. relationships~ . The Condominium Association in a procedure designated by its by-laws, appoint and a single custodianship which shall assure the security and convivial atmosphere of the.premises, tg.~nclude the following at a minimum: 1. A welcoming information and reception desk which is manned seven days a week during reasonable business hours during rental activity seasons, and which is located no farther than meters from the premises. 2. On-call services 24'hours a day during the rental activity periods for late arrivals, emergencies, lock-outs, and emergency repairs. 3. Maintenance of the grounds, common elements, and emergency unit repairs. ' 4. The continuanc~ of traditional hotel amenities and host/guest relationships. 7. Unit management and maintenance. The Condominium Association shall require that each individual unit be managed and maintained by the Owner or the Owner's agent, hereinafter called Managing Agent. Said Managing Agent may be Coincidentally the custodianship appointed by the Condominium Association. ~. If said Managing Agent is not the custodianship, Managing Agent must be readily accessible to the custodianship during regular business hours and must satisfy the custodianship that the unit is in good and rentable condition. During non-business hours, Managing Agent shall provide for emergency repairs, although the custodianship may elect to effect said repairs without consultation with Managing Agent, at the custodianship's sole discretion. In the event that the Condominium Association shall in accordance with its by-laws agree that an individual unit is not being managed and maintained in accordance with the above, the Association shall be required to, upon notice duly given, insist upon good and proper unit management and maintenance and shall be empowered to effect said management on behalf of the unit Owner. 8. Perpetuities. This agreement and the covenants it creates shall exist for the life of the survivor of the present City Council of the City of Aspen plus twenty-one years, except as terminated or modified as provided herein. IN WITNESS WHEREOF, the parties have executed this agreement and covenant, this day of , 19 , the effective date thereof. THE CITY OF ASPEN, by (MUNICIPAL SEAL) THE TIPPLE LODGE, a municipal corporation, ATTEST: a joint venture, John L. Faulkner, j.v. (ACKNOWLEDGMENT FOR TIPPLE LODGE) Mary I. Faulkner, oV. Tipple Lodf o Box 147 Aspen, Colorado 81611 (303) 925-1116 Aspen Plarming and Zoning Co,~ssion Aspen, Coloredo 81611 Dear Co.u.4 ssioller 8 ! One of your major concerns was whether lodging rates would increase as a result of condominiumization of lodge rooms since new owners might want to raise the rates because they had paid so much for their unit. Rental rates, howevers are determined in the lodging rental market, and are independent of purchase price and other fixed costs. (although, in the ot~er direction, rental rates may affect purchase prices). If an owner tries to raise rental rates he will lose rentals and earn less. Why then are purchasers willing to pay prices that are much greater than the eapitalized market rental rates? 1. They expect market rental rates to go up in the future -- not becaase more lodges will be condominiumized, but becemse mawket conditions will allow it, whether or not lodges are condominiumized. 2. They expect their units to appreciate -- i.e. they may be willing to pay such high prices because prices are rising. 3. They want a place in Aspen. Rental rates are determined in the market by supply and demand. Demand is the amount of lodging {~urists would rent at all alternative rental '~.ates at a given time. i.e. demand is a function of rental rates -- the lowar the rates the greater the quantity demanded. See the graph below. S4=tliarly, supply is the amount of lodging that lodgeowners would provide at all alternative rental rates. In Aspen the supply is limited to the amount of lodging available. Therefore, the supply is almo~ perfectly inelastic (does not vary with rental rates) over a range of relevant rental rates. (At very low rental rates which did not cover direct operating costs, the supply would be less. Also, at Iow rates the owner may decide to use the unit himself). Rental There is ~ average rental rate at which supply 'rates and demand are equal called the market rental rata. High If rental rates a~e below this, there will be an ra~e excess demand or shortage -- more ~a-ists will want to rent than there are rooms available, and as a l~arket result the market rate will be bid up. If owners rate try to charge too much there will be an excess faLSew supply (vacancies) and the rates will tend to be bid down. Demnd Supply ~excess J ..... su Ay Quantity It is true that if owners took their units off the rental market the supply w~uld decrease and ~ental rates w~uld p~obably increase. Evidence in Snoweass indicates that very few units are taken off the rental ~arket. It does not ~ake economo sense to do so. 1. Saving mar and tear is not economically Justified. Wear and tear are costs of doi~ business Just like any other cost. Rental profits at today's ten, are tach higher than mar and tear costs. It makes more sense to rent and spend more money on upkeep than to let the u~it lie fallow. 2. Living in a lodge roo~ on a long ter~ basis involves high opportunity costs (forgone rental profits). Near the ski ~onntain short te~ renta are very high, and these rents w~,st be given up in order to live in one's o~ unit. It ~akes ~ore sense to rent one's lodge roc~ on a short ter~ basis and live sow~- where else where rents are not as high and where more livi~ space is affordable. With the rental profits frc~ a lodge room in a short ter~ high rent area, one could rent ~ore livable aeoo~aodations elsewhere. In s~w~y, I don' t believe that the supply of rental lodging units will hardly be affected by oondominiu~ization of lodge r~e~s, and since rental rates are determined by supply and demand, they should also not be affected ~alch. Sincerely, John L. Faulkner