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HomeMy WebLinkAboutlanduse case.lodge lottery.City Wide.1980-1 MEMORANDUM TO: Aspen Planning and Zoning Commission Aspen City Council FROM: Richard Grice, Planning Office RE: Lodge Condominiumization/Lodge Preservation DATE: April 4, 1980 As a result of several zoning actions in the last decade, all lodges located outside of the Lodge zones have become non-conforming uses. As such, they are subjected to restrictions imposed by their non-conforming status. The non- conforming use provisions are very restrictive regarding improvement, upgrading, and modification. Without actually calling for abatement of non-conforming uses, the provisions of this Section, by their restrictiveness, encourage the uses being slowly phased out and converted to conforming uses. This disincentive has been dubbed "slow death". Recent public discussions of the so-called "downward spiral" of the Aspen lodging industry have raised questions about the impact of this provision in particular and its relationship to physical deterioration of lodge structures. It is generally acknowledged, however, that the unique variety of existing Aspen lodges as to scale, character, size, type, location, quality, services, amenities, ambience and price is an integral part of the charm and appeal of Aspen as opposed to other resorts. The potential conflict of public policy was raised when the previous Smuggler Lodge applied this last summer for a variance from the Code limitation that any repair and modification to a non-conforming use be limited to ordinary repairs and to no more than 10% of the replacement value of the structure on an annual basis. That limitation clearly prohibited renovation intended to upgrade the lodge' s facilities and in some cases to simply modify structural elements to make it a more viable operation. Both the Planning Director and City Attorney who sat in on the Board of Adjustment deliberations heard testimony that raised questions whether such restrictive provisions on improvement worked against public interests and whether in fact the result of those provisions had unforeseen adverse impacts on the quality of this community. A variance was granted to the Smuggler Lodge in part on the basis that Planning and Attorney staff agreed it was appropriate to forward an amendment to the non-conforming use provisions to the City Council for their consideration. In an unrelated application, the issue of condominiumization was raised. While the objective of that lodge applicant seeking to condominiumize was not solely to upgrade, otherlodge owners began to grasp the potential implication of condominiumization for improvement and for continued viability in general . What resulted from this convergence of public and private interest was the organization of the Lodge Association to address these issues. Through a series of meetings conducted by the Lodge Association and attended by public staff, the specifics of the two cited applications were expanded into a full review of the history of lodging and related zoning and land use actions. The Lodge Association for the first time defined the problem from their perspective. As part of the process, staff has reviewed with the Lodge Association several legislative techniques for dealing with the problem of deterioration. Statement of the Problem From the months of discussions, it appears that the problem simply stated is the continuing economic viability of Aspen' s lodging industry. More specifically stated, it is the relationship of non-conforming use status to the continued viability of Aspen' s non-conforming lodges. From the discussions there appear to be three important issues arising out of the relationship of public policy and this industry's future. They are: 1 . Limitations on reconstruction and/or renovation imposed by non-conforming status. Memo to Aspen P and Z City Council Re: Lodges April 4, 1980 Page Two 2. Refinancing difficulties arising from non-conforming status. 3. That economies of scale are not achievable because of limitations on expansion. Review of Alternative Solutions A. Limitations on Reconstruction and/or Renovation. The staff has looked at two means of addressing this particular problem: 1 . A method of addressing this problem is to amend the non-conforming use section of the Code so as to remove restrictions on renovation, reconstruction or modification of non-conforming lodges and begin to thereby encourage their full utilization. This mechanism was suggested as a means of allowing the upgrading of non-conforming residential uses, without allowing their expansion or proliferation. It was first suggested when the Board of Adjustment considered the Smuggler Lodge application. It was offered as a means of directly attacking a Code limitation which has had effects that may have been unforeseen. In other words it is questionable whether previous zoning actions were intended to foster the slow death of uses primarily residential in nature. It is important for conservation reasons as well as for life, health and safety reasons to encourage the maintenance to Code standards of all residential type structures. Restrictions on renovations of buildings designed for human occupancy has the adverse impact of fostering deterioration instead of encouraging continued upgrading to Code. For these reasons, a recommendation was made that multi-family residential and lodge uses be distinguished from the existing non- conforming use provisions of the Code and subject to a "preservation clause instead". The effect of this proposed amendment would be to repeal the existing non-conforming use restrictions on renovation, etc. , and substitute the following provisions: That renovation, reconstruction and modification of non-conforming residential uses would be permitted provided that they meet the area and bulk require- ments of the underlying zone district, that there be no increase in the number of units or total square footage, that any change in use be toward conformity, and that if any such use of land cease for any reason for a period of more than one year, any subsequent use of the land be consistent with the requirements of the underlying zone district. This clause is similar to that which the County implemented in its non-conforming use section several years ago. The purpose of that clause was to recognize the appropriateness of favorable treatment of residential uses by allowing their continued viability instead of discouraging it through abatement or restrictive anti-improvement clauses. Such an amendment need not change underlying public policy which states that there are more appropriate locations for certain uses. Specifically, the 1973 Aspen Land Use Plan calls for future tourist accommodations being limited to Lodge zones at the base of Aspen Mountain and in close proximity to transportation as well as the Commercial Core. It does allow the continuance of what may previously have been thought to be a tolerable mix of lodge and other uses, but which is now thought to be in fact a desirable mix. It is an alternative to deterioration, without fostering proliferation or expansion contrary to adopted land use plans and zoning patterns. The proposal has the advantage of simple administration in that an application may be made without City Commission review and simply by providing plans for building permit issuance that meet the requirements of the Uniform Building Code. Memo to Aspen P and Z City Council Re: Lodges April 4, 1980 Page Three 2. A second solution is a "Lodge Overlay Zone". It was suggested by the Planning Office after discussions of the Lodge Association led beyond the original scope of the discussion. The model that was suggested was used in Phoenix to accommodate pre-existing non-conforming uses in otherwise residential neighborhoods by %meliorating the adverse effects of incompatible mixtures of uses" through a neighborhood planning process and the adoption of a neighborhood overlay plan. If applied to the City of Aspen,the Lodge Overlay could be a technique for accommodating lodges as uses interspersed with residential and other types of uses in non-tourist zone districts. In short, it is a legal technique for legitimizing the existence of non-conforming uses in a zone district that does not otherwise provide for them and is a process for determining the circumstances under which those uses may be made more compatible. To the Lodge Association this technique appeared to offer more flexibility and provides a mechanism for allowing expansion. Al Blomquist offered a first draft of such a district and delineated examples of how expansion could enhance the situation of individual lodges. After evaluating the draft and preparing one of our own, the Planning Office has concluded that we cannot recommend the Lodge Overlay technique at this time for the following reasons : -A lodge overlay zone which allows expansion offers an opportunity which is in contradiction to the Growth Management Plan. The Growth Management Plan allocates a quota of only 18 new lodge units per year which was calculated by allocating 80% of the ultimate buildout achievable under the Lodge zone density over a 15 year period. The Growth Management Plan was designed to achieve balance in several areas, among them the area of bed to ski and recreational capacity. In that analysis, Aspen is overbuilt in lodge capacity, while Snowmass is underbuilt. The Growth Management Plan recommends that Snowmass be allowed to build lodge capacity to meet its skiing terrain. The Growth Management Plan states that "the City of Aspen could make a very positive contribution to the overall transportation and fiscal balance of the community by undertaking a program to substantially reduce the potential for tourist accommodations expansion and reserving future growth for permanent single and multi-family development at a low rate. " To open up the opportunity to non-conforming lodges now to participate in this limited lodge expansion seems to offer at best a false hope. The argument has been raised that we are losing short term accommodations in the City of Aspen and expansion should be allowed make up the difference. We cannot at this time confirm or deny that but have programed for later this year a work element that will review provisions of the Growth Management Plan. For this to be complete it does require the kind of inventory that Al 6fomquist has been suggesting which in turn requires a great deal of time and effort on the part of the Finance Department and computer personnel as well as funding to set up a program for monitoring inventory of lodges and residential uses. The Planning Office recommends that it would be inappropriate to adopt an ordinance which could be in conflict with the Growth Management Plan until the need for change in it is well documented. -The second reason is that the Lodge Overlay proposes a substantial planning process because it is only through that process that a suitable floor area ratio and other bulk parameters for lodge expansion can be devised. Through the mechanism of the Lodge Overlay,bulk and other impacts such as parking or density, are reviewed through a neighborhood planning process. At a minimum this would require a liaison role by staff members in order that a report and recommendation may be made to Planning and Zoning Commission and Council who would ultimately adopt such a plan. Memo to Aspen P and Z City Council Re: Lodges April 4, 1980 Page Four It is a novel and potentially healthy process. It is not an easy one, is not budgeted, and is not the simplest way to address the "downward spiral" of lodges. B. Refinancing Difficulties. Refinancing difficulties arising from non-conforming status could be substantially reduced by the adoption of the "Lodge/Residential Preservation Clause" in conjunction with authorization of condominiumization of non-conforming lodges. The Planning Office has consulted with a number of local lending institutions which have personal experience in the financing of lodges. Howie Mallory of the First National Bank and Jim Patterson of the Bank of Aspen have indicated to us that these two modifications would improve the prospects for financing of lodges. They did comment that lodges experience refinancing difficulties with or without non-conforming status, and investors' decisions are based on a case by case review. Although lodges are viewed as high risk invest- ments, the bankers felt that condominiumization combined with the elimination of restrictions on renovation could provide lodges with significant financial flexibility. The Lodge Condominiumization Ordinance which is also included in your packet is written to be consistent with the recommendations of the Lodge Association, the Planning and Zoning Commission, as well as the Planning Office. C. Economies of Scale. Staff cannot adequately comment on the relationship of small operations and economies of scale. We have been advised that the industry standard for a viable lodge operation is 250 or more rooms. If this is true it appears that there is little that we can do to assist toward economies of scale without totally undermining previous land use and growth policies. Expansion at any rate raises inconsistencies with the intent and characteristics of underlying zone districts in which non-conforming lodge uses are found. For example, the Office zone is one which contains a number of non-conforming lodges especially along Main Street. The Office designation in this area was adopted to provide for the establishment of low intensity office and commercial uses in such a way as to preserve the visual scale and Victorian character of formerly residential areas. Lodges were to be tolerated only as subordinate and in their existing scale. Residential zones where other lodges are found were created to provide for long term residential uses. Increase in short term tourist use has the potential for adding activities which conflict with the residential nature of the neighborhood. Increase in the number of cars may add to the congestion while trip generation time periods are different for long and short term residential uses, and may constitute a source of annoyance. The Lodge zones were however created to provide for the recreational and accommodation needs of the visitor in an area which is especially suited for the type of trip generation and people movement that visitors will incur. Conclusion The Planning Office recommends as the result of many meetings and discussions with the Lodge Association and other staff that the attached Condominiumization and Lodge Preservation Amendments appear to accomplish the thrust of the Aspen Lodging Association' s objectives while maintaining the integrity of adopted land use and growth policies. They remove legislative obstacles to lodge renovation, promote better financing opportunities, and open up a mechanism for the direct financing of improvement through condominiumization. In short, the amendment should go a long way to halting the "downward spiral " and deterioration of physical conditions of lodges. In addition, the amendments accomplish these objectives without undermining adopted land use and growth policies. New lodges and expansions of lodges are encouraged in the Lodge zones and at a limited rate. Finally, the mechanisms offer immediate relief. A simple building permit application opens the way for complete lodge renovation. Memo to Aspen P and Z City Council Re: Lodges April 4, 1980 Page Five This process has been an educational one. A better understanding of the lodge industry and public policy impacts on it has resulted. We will continue to keep the lodging situation in mind when the Growth Management Plan is reviewed with a view toward monitoring both the increase in lodge inventory and the condition of lodges. Maintenance of the characteristic mix of lodges of differing scales and locations within the City of Aspen is a much more apparent goal today than it was several years ago. Should it become necessary, other more sophisticated techniques such as the "Lodge Overlay" will be reviewed as supplementary mechanisms.