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HomeMy WebLinkAboutagenda.council.worksession.20130625 CITY COUNCIL WORK SESSION June 25, 2013 4:00 PM, City Council Chambers MEETING AGENDA I. Lodging Study Update June 25, 2013 Council Work Session – Lodging Page 1 of 5 MEMORANDUM TO: Mayor and City Council FROM: Jessica Garrow, Long Range Planner Chris Bendon, Community Development Director MEETING DATE: Tuesday, June 25, 4:00pm Council Chambers RE: Lodging Study Update REQUEST OF COUNCIL: Staff requests Council direction for next steps related to Council’s lodging goal, including what area of lodging should be addressed first and what potential policy measures Council is interested in further exploring. A matrix of potential policy options Council could pursue is attached as Exhibit A. Staff does not expect to get through the entire matrix in one meeting, but would like feedback from City Council on potential direction that implements Council’s goals related to lodging. Specific questions for Council are in bold throughout the memo. A follow up work session is scheduled for July 15th to continue the conversation. BACKGROUND: One of City Council’s Top Ten Goals is to “Complete a study on Lodging that looks at the adequacy of lodging options in Aspen and suggested areas for improvement.” Staff has checked in with City Council a number of times over the last year to ensure work is on track. Based on these check-ins, three (3) main goals have emerged around this topic: 1. Encourage upgrades and renovations to Aspen’s existing lodges. 2. Given that 40% of our short-term rental bed base in in condominiums and condominium- hotels, support ways to enable upgrades and reinvestment in these units while ensuring they remain in the short-term rental pool. 3. Examine ways the City can make it easier for new lodge product to be developed in Aspen. Question for Council: Does City Council continue to support these general goals? A great deal of background work has been completed to better understand Aspen’s existing inventory and the different opportunities and challenges related to bolstering the short-term rental base. Exhibit B provides a summary of the various studies and reports completed. Complete reports are available online at: http://www.aspenpitkin.com/Departments/Community- Development/Planning-and-Zoning/Long-Range-Planning/. Staff can answer any questions regarding the work to date at the work session. Throughout the process, staff has worked with local lodging and short-term rental stakeholders to understand the opportunities and challenges they experience, and to get their feedback on what role the City could play in bolstering the bed base. The most recent outreach occurred over a series of focus group meetings June 17 – 19. P1 I. June 25, 2013 Council Work Session – Lodging Page 2 of 5 KEY FINDINGS: Based on the extensive background reasearch and outreach with the lodging community, 5 key findings have emerged. 1. While Aspen consistently rates well with visitors in terms of available activities, family appeal, scenic beauty, and outdoor recreation experiences, the quality and diversity of lodging is rated fairly low. Combined with increased competition from other resorts, this could make Aspen a less-desirable destination for future generations. 2. 40% of Aspen’s short-term bed base is located in free-market residential condominium units. Many of these units are older and have basic infrastructure obstacles, including low ceilings, that will impact their ability to remain in the short-term rental pool. Enabling upgrades to these units will help ensure these remain a vital aspect of Aspen’s bed base. Leasing agents have noted a trend of seeing these units removed from the short-term inventory after substantial renovation. Staff believes it is critical that any incentive program for condominium upgrades include some assurances that units will remain in the short-term rental pool. o Does Council support incentives to enable upgrades and/or expansions to short-term condominium units? o Does Council agree that any program enabling upgrades of condominium units should include some requirements for maintaining these units in the short-term rental pool? 3. Aspen’s competitor resorts have approved many new lodging products over the past 5 years, making them more attractive destinations. While Aspen cannot control what other communities do, this competition represents a real threat to Aspen’s long-term viability as a destination. Staff believes implementing incentives for upgrading existing lodges to better meet visitor demands, as well as incentives for new lodges is important to combat this trend. o Does Council support exploring incentives for upgrading and refurbishing existing lodges? Would Council support lower permitting fees and review process requirements as part of incentives for existing lodge refurbishment? o Does Council support exploring incentives for new lodges? Would Council support policies that lower mitigation requirements, or increase allowed heights and density as part of incentives for new lodges? 4. More families travel to Aspen, resulting in increased demand for units with multiple bedrooms, common areas, and flexible unit configurations (i.e. a unit can be rented as a 1 bedroom or 2-3 bedroom). Bathrooms in existing short-term accommodations are cited as an area where existing stock fails to meet visitor demand (i.e. visitors expect a separate bath and shower, while many existing units only contain a shower or a combined tub/shower). o Does Council support more flexible unit configurations to help meet this demand? o Is Council interested in exploring incentives to enable existing lodge and short-term condominium product upgrading to create larger units (i.e. more bedrooms, larger bathrooms, common area, etc)? P2 I. June 25, 2013 Council Work Session – Lodging Page 3 of 5 5. Aspen’s land use and building permit review processes can be unpredictable, lengthy, and costly. This can detract an existing property from upgrading or remodeling, and can detract developers from proposing new lodges. Countering this would minimize Council’s role in reviewing the look and feel of lodging development. o Does Council support changes to the review processes to enable more efficient and timely reviews and decisions for lodging and short -term condominium projects? POTENTIAL NEW LODGING POLICIES: Based on the work to date, staff has prepared a matrix of potential lodging policies that implement the goals listed above. These range from minor policy changes that could be done relatively quickly or require minimal staff work, to significant policy changes that will require significant staff or financial resources or rely on working with outside groups. The matrix has been divided into the following policy areas:  Land Use and Building Permit Process  New Incentive Programs  Physical/Zoning  Transportation  Parking  Affordable Housing  Financing/Taxes  Planning, Building, and Engineering Fees  Improvement District  Improvement agreements  Data Tracking  Other The intent of this matrix is to enable Council to pick different policies to implement. Council may be interested in pursuing minor changes in one area, major or significant changes in another, or not pursuing any changes in an area. Staff does not endorse moving forward with every item included on the matrix, but wanted to provide a broad spectrum of options for City Council to consider as this goal moves forward. Council may want to consider the following questions to facilitate review of the matrix.  Are there certain policy areas Council is most interested in pursuing?  Is there a short-term bed-base segment (condominiums, existing lodges, new lodges) City Council is most interested in pursuing first?  Should the same set of policy changes be made for traditional lodges and condominiums?  Is Council comfortable pursuing significant changes listed, given that these will likely take significant staff time and financial resources away from other goals and work program items? COMMENTS FROM LODGING STAKEHOLDERS: Staff held four small group sessions June 17 – 19 with many of Aspen’s lodging stakeholders. They provided some general comments about the policies that, if implemented together, would enable upgrades to existing lodges, upgrades to condominium units, and creation of new lodge product. In general the lodge focus groups recommended moving forward with policies focused on existing lodges and short-term condominiums. A few policy areas were identified as potential P3 I. June 25, 2013 Council Work Session – Lodging Page 4 of 5 top priorities that would make the most impact in bolstering Aspen’s bed base. City Council may want to consider these highlights during review of the attached matrix. Process: There were a number of comments related to the cost, length, and unpredictability of the land use and building permit review processes. This was an area identified by all groups as one that must be updated if the City is serious about bolstering the bedbase. Some specific policies suggested by the focus groups included:  Allow reviews for lodges ad short-term condominiums, especially upgrades to existing projects, to be consolidated to minimize the number of review bodies and processes.  Amend the PUD/SPA process so conceptual review is more meaningful. (Note, staff has proposed this change as a code amendment that is being presented to City Council at the regular June 24th meeting)  Establish timelines for board and administrative reviews to help streamline review times.  Amend the growth management system to either significantly increase the number of lodge allotments available each year, or remove the lodge allotment cap all together.  Limit the scope of discussion during a land use review. New Incentive Programs: Each group encouraged the City to rethink how requirements for lodges are administered, and encouraged the City to move toward a system of incentives rather than requirements. Some ideas for new incentive programs included:  Create a “package” remodel/upgrade program for existing lodges and short-term condominiums for a specific time period. If a property upgrades to include specific ADA and/or energy upgrades, review fees would be reduced or waived and the project would move to the front of the review line.  Incentivize individual condominium upgrades by allowing certain expansions (square footage, density, height, etc) in exchange for agreement to be in short-term rental pool for a certain period of time.  Change the land use review process for existing lodge remodels and expansions that allows each individual property to pick a few of the city’s current mitigation requirements (i.e. parking, transportation, affordable housing, public amenity space, etc) to meet, rather than requiring each project to mitigate everything. Each project is different, so allowing lodges to meet city requirements that also contribute to their success as a lodge was seen as a win-win.  Create a Lodge Ombudsman position that assists and guides lodges and condominiums through city land use and building permit processes. This person would assist properties in understanding requirements and fees, and could propose potential process changes based on their work with the short-term rental community. Physical/Zoning: There were a number of comments focused on the importance of enabling minor expansions of existing lodges and short-term condominiums in order to ensure those units remain viable visitor accommodations. In addition, the groups indicated the need to amend zoning to allow for more height and density if the City is serious about wanting to attract new lodge products. Some specific comments included:  Because most older lodges and short-term condominiums do not conform to their underlying zone district, either allow certain expansions of those properties by right, or P4 I. June 25, 2013 Council Work Session – Lodging Page 5 of 5 amend their zoning to establish that their existing physical structure is permitted. This would make future remodels, upgrades, and expansions.  Amend zone district dimensions to allow increased density, heights, floor area, etc, for all lodge projects, particularly for properties located on the mountain where higher heights and density is more easily blended into the surroundings. NEXT STEPS: Based on the priorities identified by Council, staff will return on July 15th to present specific recommendations on programs and policies to implement, including the amount of time and cost associated with each. ATTACHMENTS: EXHIBIT A: Potential Lodging Policy Change Matrix EXHIBIT B: Summary of background work completed P5 I. Exhibit A - Potential Lodging Policy Change Matrix 1 of 2 Minor Change Moderate Change Major Change Significant Change Remove lodge development from GMQS Competition.Allow lodge and short-term condominium projects to consolidate all reviews (Design, GMQS, PUD, Subdivision, etc). Amend code to enable administrative review of lodge / short-term condominium projects, with design continuing to be reviewed by P&Z/HPC. Amend code to enable administrative review of lodge / short-term condominium projects. Increase available lodge allotments within GMQS.Allow combined HPC and Design Conceptual and Final reviews for lodge projects. Amend PUD/SPA review processes to make Conceptual binding, and final review an administrative review to ensure compliance with the Conceptual approval. Establish a Redevelopment Authority focused on lodge or short-term condominium projects. Amend GMQS scoring system to give more points for new or upgraded lodge / short-term condominium projects. Update and simplify the Timeshare regulations, particularly as it related to division of ownership interests. Amend GMQS to account for free-market condominium units that are rented on a short-term basis (i.e. a new project receives FM or Lodge allotments based on the % in the rental pool). Streamline and coordinate Engineering and Community Development Department reviews. Amend GMQS review for lodges to be based on a performance standard. If a lodge meets the performance standards, the allotments are administrative. Amend administrative process (ex: easement/plat changes or minor land use amendments) to require city review within a certain timeframe in an effort to speed the process. Conduct a Lodging Master Plan that indicates locational priorities for new lodge or condominium product or existing product upgrades. Establish timeframes for all review processes. If a recommending board does not review within a certain timeframe, the project is automatically forwarded on to the decision making body. Increase the number of allotments available for condominium units that commit to being rented on a short-term basis. Move lodge and short-term condominium projects to the front of the building permit review line. Conduct a vision or master plan process for a new lodge at the base of Lift 1A. Establish a staff assistance program where city staff from Building, Engineering, etc, evaluate existing lodges for needed ADA, energy, etc upgrades. If non-compliance with certain city standards is found, do not require compliance unless it is a life/safety issue. Establish a system allowing project-wide short-term condominium upgrades where certain fees are waived, project is moved to the head of the review line, etc, if the condominium building upgrades to meet accessibility standards, adds elevators, upgrades energy systems, etc. System of fee reductions and streamlined review time could be in effect for a certain period of time. (note, incentivizing building energy uypgrades could help the city meet energy and carbon goals). Incentivize individual condominium upgrades by allowing certain expansions (square footage, density, height, etc) in exchange for agreement to be in short- term rental pool for a certain period of time. Potentially create a grant program, where a lodge looking to upgrade based on the Lodging Assistance Coordinator's recommendations receives a grant to implement the changes. Potentially exempt a lodge from any required land use review process if they are implementing recommendations from the Lodging Assistance Coordinator. Create a Lodge Ombudsman position that assists and guides lodges and condominiums through city land use and permit processes. This person would assist properties in understanding requirements and fees, and could propose potential process changes based on their work with the short-term rental community. Create a list of items an existing lodge may choose to do as part of an expansion or upgrade (housing mitigation, traffic mitigation, adding parking, etc), and allow that lodge to pick the 2 or 3 that make the most sense for them to do, rather than requiring every lodge do everything/provide mitigation for everything. Reduce required parking ratios for lodging and short-term condominium projects. Allow three stories in CC and C-1 zone district for lodge (and possibly associated commercial) projects on North and South sides of street. Amend zone district dimensions to allow increased density, heights, floor area, etc, for lodge projects.Annex areas for lodging development. Amend zone districts to allow upgrades and expansions to existing condominiums or hybrid lodge projects that are rented on a short-term basis. Amend Multi-Family replacement requirements for properties in the lodge zone district that will be rented on a short-term basis.Rezone areas for lodging development. Increase the allowed dimensions (height, density, floor area, etc) for short- term condominium projects Amend non-conformities portion of the code to allow certain expansions by right. Amend code to make all existing lodges conforming, regardless of the underlying zoning. Change zoning of areas located on Aspen Mountain to allow for greater heights and density. Transportation Provide discounted RFTA passes, car share memberships, we-cycle memberships, etc to lodges and hybrid lodge projects for their guests to utilize while in Aspen Provide free RFTA passes, car share memberships, we-cycle memberships, etc to lodges and hybrid lodge projects for their guests to utilize while in Aspen. Establish shared transit/shuttle services between lodges and short-term condominium projects. Expand street parking guest pass program for lodges and establish education/information packet for lodges. Allow all lodges to maintain existing parking spaces located in the right of way.Allow new parking in the right of way for lodges. Limit the amount of parking special events can use in front or lodges. Increase parking for short-term condominiums and lodges, either on-site or on city right-of-way. Level of Policy ChangePotential Measures Parking New Incentive Programs Hire a Lodging Assistance Coordinator that can evaluate and assist lodges in evaluating their facilities, marketing strategy, etc, and provide an overview of what upgrades or changes would assist the lodge's long-term viability and sustainability. Physical/Zoning Land Use and Building Permit Process P6 I. Exhibit A - Potential Lodging Policy Change Matrix 2 of 2 Minor Change Moderate Change Major Change Significant Change Reduce affordable housing mitigation requirements for new or upgraded lodge / short-term condominium projects. Waive all affordable housing mitigation requirements for upgraded lodge / short-term condominium projects. Waive all affordable housing mitigation requirements for new or upgraded lodge / short-term condominium projects. Allow existing lodge expansions/upgrade or new lodges to provide housing mitigation off-site or out of town by right, rather than requiring an additional review process. Allow existing lodge expansions/upgrades or new lodges to prove their project will require affordable housing mitigation, rather than automatically requiring it. Could be done through an audit system. Establish system that gives priority to the seasonal affordable housing rental pool to lodge employees. Only require affordable housing for a lodge or short-term condominium's direct employee needs. The City builds affordable housing units for lodges. Use the City's bonding authority to support infrastructure upgrades. Establish a new city tax or earmark existing tax revenues to assist lodges with upgrades. A lodge could apply for the assistance through a grant program. Discount or waive city taxes for lodges or short-term rentals. Establish city-based financing for upgrades to existing/new lodges and short-term condominium projects. Fees Planning Reduce fees for lodge / short-term condominium projects.Waive certain planning fees (i.e. all administrative review fees or all board fees based on process changes). Waive certain planning fees (i.e. all administrative review fees or all board fees). Waive all planning review fees for lodge/short-term condominium projects. Reduce fees for lodge / short-term condominium projects.Waive certain building and zoning fees.Waive certain building and zoning fees (higher percentage than "moderate change"). Waive all building and zoning review fees for lodge/short-term condominium projects. Waive certain building and zoning fees for condominium upgrades if those units are in the short-term rental pool. Reduce engineering review fees for lodge / short-term condominium projects.Waive certain engineering fees.Waive certain engineering fees (higher percentage than "moderate change").Waive all engineering review fees for lodge/short-term condominium projects. Waive certain engineering fees for condominium upgrades if those units are in the short-term rental pool. Improvement District (addressing utility upgrades, sidewalks, stormwater infrastructure, ADA upgrades, etc) Require lodge development to meet codes related to physical upgrades, but do not require any payments to maintain the systems.The City completes all system-wide improvements for lodges.Establish city-wide tax to fund system improvements. Improvement Agreement (addressing public improvements) City performs improvements in the right-of-way for "small lodges" (lodges with 60 or fewer rooms and who self-identified as Economy/Moderate as part of City's 2012 lodge inventory) with the lodge entering into an agreement requiring reimbursement should the property use be changed from "small lodge." Potentially enable a tiered payback system based on the timeframe since the City performed improvements - the longer the lodge remained in the short-term bedbase, the less they have to pay back. City performs improvements in the right-of-way for all lodges with the lodge entering into an agreement requiring reimbursement should the property use be changed. Track Timeshare occupancy.Assist coordination of special events and package deals with ACRA, SkiCo, SAS, Aspen Institute, etc.Increase the City's marketing budget in an effort to attract additional visitors.Work with the State to amend property tax regulations related to lodges (TABOR). Develop a formal lodging audit/tracking of occupancy, room rates, marketing techniques, etc. This could be coordinated with local lodge groups/SAS. Create incentives for condominium associations to remove short-term rental restrictions from their covenants. Establish a numerical goal of the number of new lodge and/or condominium units that should be created in the next 5-10 years. Work with County, SAS, and others to sustain and increase airline service to Aspen. Coordinate lodge booking systems (note, not a City measure, but the City may wish to assist lodges and SAS in establishing a computer system that enables all the different booking engines to "talk" to one another). Assist lodging community in establishing a single organization or entity that represents their needs. Potential Measures Level of Policy Change Other Affordable Housing Financing/Taxes Building/Zoning Engineering P7 I. 6.25.2013 Lodging Work Session – Exhibit B Page 1 of 5 EXHIBIT B – SUMMARY OF EXISTING CONDITIONS WORK TO DATE ASPEN’S LODGING SECTOR: LODGING DEMAND AND LODGING ECONOMICS: This report, released in June 2013, provides a big picture overview of the types of product most in demand by Aspen visitors, updates occupancy and rate information, and includes an EPS report on the economics of lodging development. Based on visitor survey data from ACRA, and interviews with booking agents at Stay Aspen Snowmass and Ski.com, there are more families visiting, flexible unit configurations and condominium-style units are increasingly in demand, new lodging product in competitor resorts impact Aspen’s competitiveness, and the difficulty (remoteness) of reaching Aspen impacts who visits. Since 2006, there has been a stead y increase in the number of families visiting, which is likely related to the increased interest in condominium-style units with kitchens and a common gathering area. Aspen remains a strong destination, but investment by other mountain resorts in new lodge product coupled with the relative difficulty and expense to reach Aspen, will impact Aspen’s ability to attract guest in the future. In addition, visitors indicate they are happy with the relative quality of lodging, though ratings related to the upkeep and age of properties has slipped in recent years. Visitors consistently rate the range of lodging price points and the value of accommodations for the money paid low. The economics analysis compiled by EPS echoes these findings, specifically stating the newer inventory in competitor resorts may begin to attract visitors away from Aspen. Other key findings from the economics report include:  If Aspen is interested in new or reinvigorated lodging product, trade-offs related to accepting greater height, greater density, lower mitigation levels, or a combination of these and other measures may be necessary.  Aspen’s development process, from entitlements through building permit and Certificate of Occupancy is unpredictable, and can be costly and lengthy. If Aspen wants to encourage new or reinvigorated lodging product, a more predictable process, as well as some reductions in fees and review times at all levels of the review process may be needed.  Aspen’s condominium base is aging and needs to be upgraded, but simply allowing renovations may lead to a loss of those units from the rental pool. SEC rules related to condominium hotel rentals are unclear, and may warrant additional research by the City and other mountain resorts.  Current financial markets make any new hotel product difficult to finance and build, and land costs in Aspen can make any project economically infeasible. Lender requirements for condominiums and condominium hotels are more costly and strict than in years past, while traditional lodges are often not economically feasible without some free-market component. P8 I. 6.25.2013 Lodging Work Session – Exhibit B Page 2 of 5 ASPEN’S LODGING SECTOR: AN ANALYSIS OF EXISTING CONDITIONS: This phase 1 report, released in August 2012, provides a big picture overview of Aspen’s lodging base. The report provides an overview of the City’s role in lodging over the years, outlines Aspen’s lodging inventory, includes average occupancy and rate information, and provides a number of interviews with local lodging experts. One of the findings of this report was that over 40% of Aspen’s short- term bed base is in condominiums. Based on that information, staff contracted with Alan Richman Planning Services to conduct a detailed study of Aspen’s condominium market (see next section). In the summer of 2012, the Aspen Skiing Company commissioned a study with Mountain Travel Research Program, LLC (MTRiP) to provide updated data on the lodging bed base in Aspen and Snowmass. Findings from the study were included in the report, and showed there are 2,293 units and 10,085 pillows in Aspen’s short term rental market. This represents 56% of the units and 53% of the pillows in the overall resort area. This represents a decrease in units from 2009 and an increase in pillows since 2009. The differences are likely a result of discrepancies in the 2009 reporting from individual properties, as there have not been any significant new projects or decreases in projects in that time frame. The largest sector of the Aspen lodging inventory is Hotels/Lodges, which account for 50% of the bed base (-0.17% from 2009). Condominium units account for 41% of the City total (-5% from 2009), with private homes at 6% (+31% from 2009) and bed and breakfasts at 3% (+6% from 2009). In terms of categories, the overall availability of a range of lodging types and price points continues to favor deluxe accommodations, with Deluxe pillows making up 68% and Deluxe Units making up 62% of the inventory. The Rocky Mountain Lodging Report compiles data for lodging throughout Colorado and the Rocky Mountain Region. The information includes average occupancy data as well as information on average nightly rental rates. This information was compiled for the Phase 1 Report. The seasonality of the Aspen is seen in the occupancy and room rate information over the years, with the highest occupancy and room rates seen December through March and June through August. December through March consistently command the highest average room rates, ranging from an average of $542.30 in December between 2006 and 2011 and $419.89 in March between 2006 and 2012. Compared to other Mountain Resorts and the entire state, Aspen consistently commands higher average room rates. Perhaps the most telling information in the report is from the individual interviews with members of the lodging community. Interviewees consistently stated how important special events are to attracting visitors to Aspen. They also focused on the importance of ensuring Aspen is able to attract the next generation of visitors. Several warned that while Aspen has enjoyed unparalleled loyalty in its visitors for several decades, the younger generation is less influenced by loyalty, and more driven by adventure, new experiences, new places and exploring the many choices offered around the world. Many emphasized staying true to the values that make Aspen special today, including the character of the built environment, environmental stewardship, the metropolitan feeling of arts and cultural offerings and the many recreational choices. Several were worried that locals don’t recognize that the Aspen brand is very intimidating to many people who have never been here, which can deter people from visiting. P9 I. 6.25.2013 Lodging Work Session – Exhibit B Page 3 of 5 Finally, the general consensus from interviewees was that the city should have a minimal role in the actual development of a lodge, but that the city could help to provide incentives that could make a new lodge project or lodge rehabilitation more feasible. CONDOMINIUM REPORT: The Condominium Report produced by Alan Richman focuses on the regulatory and non-regulatory barriers to developing and upgrading condominiums in Aspen. Given that 40% of Aspen’s short-term bed base is in condominiums, staff asked Mr. Richman to explore what steps the city could take to bolster this portion of the bed base. Much of the information in the report is based on interviews with condominium and condominium lodge owners and operators. The report goes into great detail about how the land use code treats traditional lodge projects differently from residential condominiums, and how that has resulted in a lack of maintenance and upgrades in this segment of our bed base. These barriers range from zoning regulations to growth management to the multi-family replacement program. It is important to understand the difference between traditional lodging and condominiums that is outlined in our code:  A hotel or lodge unit may not be occupied for more than thirty (30) consecutive days p er year by a person who has an ownership interest in the hotel or in the unit and may not be occupied by any person (owner or non-owner) for more than ninety (90) days per year. A multi-family condominium is not limited in terms of how much of the year it may be occupied by an owner or other person. Hotel units must be rented short-term, while condominiums are rented at the discretion of the owner.  A hotel or lodge unit may contain “lock-off units” whereby portions of the entire unit may be separately rented by locking the door between different rooms or combinations of rooms. On the other hand, multi-family dwelling units must have common un-pierced demising walls and cannot be separated into lock-off units. These differences prevent condominium units, even if they are rented on a short-term basis, from taking advantage of some of the height, floor area, and growth management benefits available to a traditional lodge. There are a number of condominium hotel properties in town that act as lodges, but are considered multi-family residential because of they are condominiumized. These properties do not “fit” into any zone district very well, which often means these properties are subject to additional land use reviews related to any maintenance or upkeep that a traditional lodge is not. LODGING CHARRETTE: On October 23, 2012 the city hosted a lodging charrette at the Gant with many of Aspen’s lodging stakeholders. This was one of the first times in many years voices from all of Aspen’s lodging sectors – from developers to condominium managers to large and small hotel operators to land planners – were in the same room talking about lodging issues and what role, if any, the city should play. Participants discussed new lodging product, reinvestment/redevelopment of existing lodges, and condominium rentals. Below is a summary P10 I. 6.25.2013 Lodging Work Session – Exhibit B Page 4 of 5 of comments related to the roles the City could play moving forward. In addition, outside consultants from EPS and BBC attended the charrette and provided written reports on their conclusions from the meeting. In terms of new lodging there were a number of comments that if the city wants to see more lodging that the codes should be examined and updated to encourage, incentives, and perhaps even subsidize new lodging. There was a general consensus that a free-market residential component of some kind is needed to make any brand new lodge work from a financial stand point given all of the city’s other requirements. Finally, there was consensus that lodging is the appropriate use at the base of Lift 1A, and that the city may have a role in helping create an environment where a new lodge could be successful. Some felt that improving that area would create a portal that then helps other lodges. While there was interest in seeing new lodging product, there was more support for examining ways to support our existing lodges and condominium units. One participant said the city should “enable existing lodges to thrive before focusing on new lodges.” In terms of reinvestment in existing lodges, there was a consensus that there are too many hurdles from the City in terms of fees and land use reviews. The process is complicated, unpredictable, and expensive, and the smaller lodges are often not able to afford the time or dollars it takes to go through a review process. There were some suggestions that the city could provide tax incentives or low cost loans to smaller lodges looking to upgrade. The Aspen Gems group has reformed, and participants suggested the city work with that group to determine what specific incentives and regulations would help these lodges thrive. The discussion related to condominium units focused primarily on how the land use code dis- incentivizes them. There were a number of suggestions on the city’s potential role, all in volving ways to modify how the city regulates condominiums. Some felt the city should ease regulations on condominiums if a certain percentage of units were guaranteed to be in the short-term rental pool. Others felt requiring hotel-type amenities, like conference facilities and front desk services, would help encourage new condominium units to be rented on a short-term basis. Nearly all participants expressed concerns related to the multi-family replacement requirements and their impact in stifling reinvestment in condominium units. There were some general comments as well. Some felt that the city should look forward and consider which areas of town or specific properties they would be interested in seeing a new lodge or a revitalized lodge. This kind of exercise – focusing on what the city wants – could help the private sector have more certainty to bring projects forward. In general there was a consensus that the city’s regulatory structure is burdensome and prevents good projects from coming to fruition. A final thought from the group is that the city does not actually know what types of lodging is desired by our visitors because there hasn’t been any study or work on this issue. This was seen as an opportunity as the discussion moves forward. 2011 FRACTIONAL LODGING OCCUPANCY STUDY: This report, released in November 2011, provides information on Aspen’s fractional lodges. The report includes information about usage and occupancy in Aspen’s fractional lodge projects and is based on interviews with lodge fractional managers and officials from other mountain resorts. The report suggests better tracking P11 I. 6.25.2013 Lodging Work Session – Exhibit B Page 5 of 5 of fractional occupancies would be beneficial to understanding the real impact and success of these units. P12 I.