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HomeMy WebLinkAboutagenda.council.worksession.20231113AGENDA CITY COUNCIL WORK SESSION November 13, 2023 4:00 PM, City Council Chambers 427 Rio Grande Place, Aspen I.Work Session I.A Armory Programming Update ZOOM Meeting Instructions Join from a PC, Mac, iPad, iPhone or Android device: Please click this URL to join: https://us06web.zoom.us/j/81642895909? pwd=aJrQfYZwGtacmryVa9aPt4m23WJrmI.1 Passcode: 81611 Or join by phone: Dial: US: +1 346 248 7799 Webinar ID: 816 4289 5909 Passcode: 81611 International numbers available: https://us06web.zoom.us/u/kdpct51f80 Council work session_ Armory memo_11.13.23.pdf Exhibit A_Aspen Armory Market Assessment.pdf Armory Engagement Report 11.09.23-Final.pdf 1 1 Page 1 of 2 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Jen Phelan, Development Manager THROUGH: Tyler Christoff, Deputy Public Works Director and Rob Schober, Capital Asset Director MEETING DATE: November 13, 2023 RE: Armory Hall remodel and reuse: City Council direction for schematic design REQUEST OF COUNCIL: Staff is requesting direction from the City Council on the preferred extent of remodel for the building and prioritization of the program/use mix within the building that will assist in guiding future studies and design work as this project advances. SUMMARY AND BACKGROUND: At the last work session on the Armory (June 6, 2023), Council requested a compressed timeline for the project. Since that work session, staff has engaged two consulting firms to analyze what programming might fit in the Armory and be supported by the Aspen market. The intent of these studies is to understand the feasibility of potential future programming of the Armory and assist with decision making as the project moves forward into more in-depth design and analysis. In addition to employing Design Workshop to conduct the market analysis and Cushing Terrell to ‘test fit’ the building, a new round of public engagement was undertaken with an open house and an online survey. Past Engagement: In 2022, city staff conducted two rounds of outreach inclusive of two surveys, an open house, and two focus group meetings. The public outreach, summarized in the May 16, 2022, work session memo, identified an overarching theme from participants to create a space that is accessible to the community and inviting to a broad age demographic. Top community responses for programming of the building included: • casual dining • community center Figure 1: Courtesy of Aspen Historical Society 2 Page 2 of 3 • multi-purpose space • non-profit services • lower price point retail • co-working Staff heard comments that the community needs a place to gather, that the Armory should be the heart of town, a community living room with the ability to eat, experience entertainment, shop or just hang out. As part of the outreach, the following guiding principles for the remodel and programming were vetted and later adopted via resolution by City Council: • The programming at the Armory should focus on unmet needs within the community. • The uses within the Armory should provide meaningful and affordable participation in programs and offerings. • The remodel will respect the historic context and contribute to Aspen’s small-town character. • The building remodel will incorporate sustainable systems showing a commitment to the environment. • The Armory should be able to be used by a diverse range of people. • The operational structure of the Armory should limit the public financial burden of operating and maintaining the building. • The programming of the Armory should contribute to a lively and diverse downtown. Current Work: Staff has met with City Council on multiple occasions since 2022 to discuss the remodel and reuse of the Armory at a high level, discussing its history, engagement results, and potential redevelopment scenarios. Past public engagement efforts have been effective in identifying participant preferences but additional analysis for decision making, through concept planning and a market analysis, have been undertaken. In late summer of 2023, the architectural consultants began evaluating a mix of uses that can be accommodated in the building considering individual space needs for the different uses, such as front and back of house, circulation, and accessory needs like bathrooms. At the same time, work on a market study was undertaken, inclusive of quantitative and qualitative data collection. Public Engagement: Over 120 people signed in at the open house in October 2023, with staff estimating 150-200 people attending the event. The open house provided an opportunity to tour the building and provide ideas and feedback on the programming concepts. Based on ranking of the identified potential mix of uses, a food hall concept received 41% of the votes while restaurant/bar received 9%, equaling 50% of the open house participants preferring provision of food within the Armory. A visitor center received 14% of the votes, and a community lounge received 11%. Flexible multi-purpose spaces (9%), retail spaces (7%), ACRA offices (6%), and co-working space at 3% rounded out the votes. The results of the open house clearly indicate a community preference for a food component in the building and the survey corroborates this preference. In the most recent community survey, which had 168 participants, the same questions were posed as the open house, with similar results. A food hall was by far the most desired use for the building followed by retail, community lounge and flexible meeting space (Table 1). 3 Page 3 of 4 Engagement results from the open house of the initial test fit options garnered the most votes for the Food Hall and Restaurant concept (Option 1) with 49%, the Two-Level Food Hall (Option 3) came in second with 37% of the votes and the Food Hall & Visitor Center (Option 2) placed third with 14% of the votes. The community survey ranked the Two-Level Food Hall first, followed by Food Hall and Restaurant, with the Food Hall & Visitor Center rounding out the options (Table 2). The highest-ranking outdoor improvements included alley activation with food trucks, markets/street fairs, and art, while seating options, updated landscaping and lighting ranked highest for improvements to Conner Memorial Park. Test Fit: Cushing Terrell was engaged to undertake a high-level analysis to evaluate what may be able to fit within the building based on the top uses identified through past public engagement, the programming expectations of ACRA, and taking into consideration the space needs of the different uses inclusive of front and back of house, as well as circulation and bathrooms. The test fit involved first assessing the site and building characteristics and then developing floor plan options that incorporate the identified potential uses: casual dining, community center, multi-purpose space, non-profit services, lower price point retail, visitor center, and ACRA offices. In evaluating the existing conditions, Cushing Terrell Figure 2: Survey Results, Ranked Programming Figure 3: Ranked Programming Options 4 Page 4 of 5 identified removing the present second floor as critical to the successful reuse of the building. The mid-1970s installation makes the ground floor especially cramped and compromises the buildings original character and spaciousness, so all test fits include removal of the story. The main components of each option are noted below: Test Fit Concept 1: Food Hall & Small Restaurant. The concept accommodates two food vendors on the ground level and a small restaurant on the basement level. A visitor center and lounge area are proposed on the ground floor, while flex space and retail pockets are proposed on both the basement and ground floor. ACRA offices and more flex space is proposed on the upper level. Test Fit Concept 2: Food Hall & Visitor Center. The concept, on the following page, accommodates two food vendors and a coffee counter on the ground level with lounge space. Flex space and retail pockets are proposed on both the basement and ground floor. A visitor center is proposed on the basement level while ACRA offices and coworking space is proposed on the upper level. Test Fit Concept 3: Two Level Food Hall. The concept, on the following page, accommodates two food vendors, a coffee counter and a bar on the ground level and two food vendors on the basement level. A visitor center and lounge area are proposed on the ground floor, while flex space and retail pockets are proposed on both the basement and ground floor. Flex space is proposed on the upper level. Cushing Terrell has evaluated a number of other food halls in precedent study as well as worked with their Food and Beverage division to develop average size of food operators, taking into consideration their operating and seating needs, which averages about 1,000 – 1,200 sq, ft, per vendor. This equates to approximately five ground floor operators without mixing any other uses on the main level. Additional discussion on why and where uses were proposed in the concepts will be discussed at the work session. Figure 4: Test Fit Concept 1 5 Page 5 of 6 Market Analysis: Design Workshop was engaged to provide a market study of the Aspen market. The firm was tasked with looking at the potential uses that have been discussed for the Armory and whether there were any clear niches for programming of the building. This data (Exhibit A) was used to identify potential opportunities with the reuse of the Armory. Data highlights include: Figure 5: Test Fit Concept 2 Figure 6: Test Fit Concept 3 6 Page 6 of 7 Demographics • Within a 5-minute walk, there are approximately 440 residents and 3,178 within a 15-minute walk of the Armory. The population of Aspen is 6,823 and Pitkin County is 17,288. • The median age of an Aspenite is 43.6, which is higher than that of the state at 38.1 and Aspen’s ethnicity is predominantly white at 85.39% with Hispanic following at 4.29%. • There are 3,487 households in Aspen with an average family size of 2.85 people. • Aspen’s median household income in 2023 is $103,915.0; however, about 45% of Aspen households have an income of less than $100,000.00. The per capita income is $82,808.00. • There are 13,364 employees in Aspen and its daytime population increases 76% during working hours (6,823 to 12,020). Market Assessment • Aspen has a strong retail market and the current rental rate is $96.57 per square foot with low vacancy rates. New space is quickly leased. • Aspen has many food service options (about 61). • Within the Aspen Market there exists a lack of available lower-cost restaurants, particularly during dinner hours. Of the lower cost options that are available, a limited number are full- service restaurants. • A food hall (with many vendors) could be challenging, due to Aspen’s location and population size. • Aspen’s retail market is largely made up of retailers carrying high-end activewear and accessories, health & wellness products and services, and personal/professional services. The two categories with the smallest number of tenants are décor/home goods/artisanal gifts (2%), and lifestyle & family apparel (4%). • Non-profits serve the community and a broad range of causes. As they tend to have a targeted audience, the foot traffic generated by non-profits is limited. • Meeting space has been identified as a desired component of the Armory and there is limited low-cost space for people to gather in Aspen. Based on market conditions, the following recommendations within the market analysis, are provided: • “Food service: food service is recommended to be included in the Armory as there is a lack of available lower price point options, especially during the dinner service hours. A full service, casual dining is recommended, potentially with a couple quick service concepts in the building. • Retail: A retail component is a feasible component in the building. Some form of a Makers Market is supported by market conditions allowing for small storefronts and local/artisan products. • Flex-space / Coworking Space: Integrated spaces where individuals or small groups can meet for low or no cost is recommended. • Non-profit Office Space: office space for non-profits is not considered the highest and best use for the Armory building, as they do not tend to drive foot traffic and do not appeal to a broad segment of the community.” DISCUSSION: To move the project forward, City Council will need to provide direction on the preferred extent of remodel, prioritization of uses for the building, and identification of important operational characteristics of any use programmed within the Armory. Staff has outlined 3 questions, below requiring Council direction. 7 Page 7 of 8 Preferred extent of remodel. Previous discussion with City Council has identified a remodel in the $18 - 23 million range as the target expenditure. This was referred to as the ‘Somewhere in the Middle’ option, between ‘A Light Touch’ and ‘The Works’1. The scope of work assumed an overhaul of the building and included the removal of the present second story with the potential for a ground floor addition and basement along the alley. Removal of the second story, which is recommended by the consultants, will mean approximately 5,000 sq. ft. will be removed from the Armory’s existing footprint of 17,635 programmable sq. ft. As shown in several of the design concepts, the introduction of a mezzanine allows the recapture of some square footage. An addition allows the Armory to retain a greater amount of square footage; however, it will increase overall development costs, require design approval from the Historic Preservation Commission, potentially infringe on locating required mechanical for the building, and impact existing parking. 1) Staff would like confirmation that the second story should be removed and the above grade structure be brought back to its original two story floor to ceiling head height as the design moves forward. 2) Staff would like direction on whether a potential addition to the building should be considered during schematic design. Prioritization of the program/use mix. With the additional round of public outreach that has been undertaken, it’s clear that the provision of food is highest on the communities’ preferences for the reuse of the Armory. Retail also received high marks, as well as the desire to gather, both informally and more formally. The building can accommodate multiple uses, but final location and layout of the uses will depend on additional consideration of the needs of each use, how the uses cooperatively work together in the building, and specific needs of an operator to develop a mix that has the greatest chance of success. While the test fit shows multiple uses can fit into the building and the market study identifies uses that may be underserved in today’s market, staff is asking Council to rank the following uses and, if comfortable, identify any uses that should not be included for further study as the building has a finite amount of space. By ranking the uses, further design work can focus on ensuring the needs of top ranked uses are prioritized. 1 Previously discussed remodel options ranged from a ‘Fluff and Buff’ of $7.5 million that included new carpet and paint, as well as some basic mechanical upkeep, to the ‘The Works’ option that was estimated with a top end cost of $26.5 million and included increasing the head height and size of the basement, reworking the entire interior of the building, and constructing an addition along the alley. Figure 7: 'Somewhere in the Middle' 8 Page 8 of 8 3) Staff would like Council to rank the following uses: food vending, lower price point retail, community lounge – informal gathering space, flex space – formal gathering space, visitor center, ACRA offices, co-working space, non-profit space Next Steps. Currently, the city has issued an RFP for design services (schematic to construction documents) on Bidnet that closes on December 4th. As part of the scope, the selected design team will need to demonstrate responsiveness to the Council direction provided tonight. The RFP also requires prioritizing completion of an operational study to ensure that any uses programmed into the building have adequate space or are ‘right sized’ and evaluate the operating costs associated with running the building as well as recommendations on different operating models. The RFP also notes the City may issue an RFQ for Public-Private Partnership (“PPP”) development and financing interest near the end of the SD design phase. RECOMMENDATION: Staff requests direction on the three questions posed within the memo. EXHIBITS: Attachment A: Aspen Market Analysis – market assessment component, Design Workshop 9 Page 1 of 30 Aspen Armory Market Assessment A market assessment was conducted to study and gauge viability for the project site. The following section presents historic, current, and projected market conditions for the City of Aspen, including data and trends most relevant to each use case identified through previous engagement. This analysis informs recommendations for the future use of the armory based on market feasibility, positioning, and demand of each programming opportunity. Retail Market CoStar Commercial Real Estate Information Company 1 defines the purpose, location, and characteristics of retail properties as, “to promote, distribute, or sell products and services to the public. It will often be in high traffic or easily accessible areas. Retail buildings are configured for the display of merchandise or the interaction of company sales personnel with others. Retail buildings can be used for various sales opportunities, including, but not limited to, stand- alone stores, strip centers (with or without anchor tenants), malls, and fashion or specialty centers.” The retail mix in Aspen is generally comprised of for-sale goods and services. The following summary includes real estate trends, forecasts, and figures for retail in Aspen. Retail properties often include multiple tenants with varying business types. Food and beverage related uses, such as bars/night clubs, supermarkets, restaurants, and fast-food locations, are a common use-type found within retail properties. As a result, the data reported and analyzed here includes figures for square footage dedicated to food and beverage spaces along with all other retail use types. Retail Market Real Estate Trends & Forecasts Inventory & Vacancy According to data retrieved from Costar, the Aspen area has approximately 106 buildings and 1.2 million square feet of existing retail space. Occupancy is extremely high with 99.7% of retail space occupied as of Q3 2023. Most of Aspen’s retail space (95 properties and about 1 million square feet) is located within a 1-mile radius of the Armory building. There are 26 properties located outside of city limits around the Aspen/Pitkin County Airport, with seven of the 23 properties being classified and marketed as retail properties. The properties located north of the airport are also outside of city limits. The majority of retail development within Aspen (102 of 106 properties) are listed as General Retail (e.g., standalone strip centers or pad site retail space). Four properties are listed as Strip Centers (e.g., mid-scale strip malls). Figure 11 illustrates the distribution of retail throughout the Aspen area. FIGURE 11: CITY OF ASPEN, CO – RETAIL LOCATIONS, SOURCE: COSTAR 1 “Costar Glossary.” CoStar Glossary | CoStar North America, www.costar.com/about/costar-glossary#go_c. Accessed 23 Oct. 2023. 10 Page 2 of 30 Vacancy rates within the Aspen market have historically ranged between 0.3% and 4.4%, indicating a strong retail market that is capable of absorbing new retail space as it is made available or introduced into the market. Vacancy rates have trended downward over the past year, dropping from 0.8% in Q4 2022 to 0.3% in Q3 2023. Vacancy rates are projected to continue to remain low over the next five-year period, ranging between 0.1% and 0.3% between 2023 and 2028. Figure 12 illustrates historic and predicted future vacancy trends in Aspen. Given historic and projected vacancy trends, it is predicted that vacancy rates within the Aspen retail Market will continue to remain low, even as more retail products are introduced into the market. FIGURE 12: CITY OF ASPEN, CO – RETAIL VACANCY TRENDS, SOURCE: COSTAR Rental Rates & Pricing The current market rent per square foot in Aspen is $96.57. Rental rates within Aspen have been climbing steadily for the past ten years, rising from $74.75 in 2013 to their current high of $96.59, and are forecasted to continue rising, growing to $102.50 by 2028. Asking rent is the dollar amount lessors are asking for to lease their building/space/land. Market rent represents the rental income that a property would most probably command in the open market. Asking rent has fluctuated in Aspen over the past 10 years, dropping to a low of $67.23 in 2014. Current asking rent ($142.46) is greater than market rent ($96.59), indicating that there is sufficient demand within the market to both lease space without offering incentives or lease to competing tenants who are offering rental rates greater than market rate. Figure 13 illustrates historic and projected market and asking rent in Aspen. 11 Page 3 of 30 FIGURE 13: CITY OF ASPEN, CO – RETAIL HISTORIC AND PROJECTED RENT, SOURCE: COSTAR New Deliveries & Absorption Aspen has not experienced a significant amount of new retail development in the last decade, with only 33,800 square feet of new retail space delivered since 2013 (Figure 14). In 2019 net deliveries, meaning total square feet of new construction built less total square feet of retail space demolished, were -17,361 SF. About half (15,600 SF) of retail deliveries within the past decade were delivered between 2020 and 2023 (YTD). Currently, there are several proposed and under construction retail projects in Aspen, including the Main Street Bakery space, the Belly Up space, the property at 430 E. Cooper, the property at 300 East Hyman Avenue, and the property at 227 E. Main Street. 12 Page 4 of 30 FIGURE 14: CITY OF ASPEN, CO – HISTORIC DELIVERIES AND DEMOLITIONS (SQUARE FEET PER YEAR), SOURCE: COSTAR Absorption2 measures change in occupancy over a given period. Retail space (measured in square feet) may become available for lease due to new construction or previous leases terminating. Square feet are counted as “absorbed” once they are leased by a new occupant. The time of absorption is based on the move-in date of the lessee. According to CoStar, “lease renewals are not factored into absorption unless the renewal includes the occupancy of additional space. (In that case, the additional space would be counted in absorption.) Pre-leasing of space in non-existing buildings (e.g., Proposed, Under Construction, Under Renovation) is not counted in absorption until the actual move-in date.” Absorption within the Aspen market fluctuates, with approximately 27,363 square feet of retail space leased between Q4 2021 and Q3 2022, and 3,448 square feet of retail space leased between Q4 2022 and Q3 2023. However, historic trends indicate that as existing or new retail space is introduced, the market is quick to absorb it, with a 50% chance that space will be leased within 6 months. Figure 15 illustrates historic and predicted future absorption, deliveries, and vacancy in Aspen. 2“Costar Glossary.” CoStar Glossary | CoStar North America, www.costar.com/about/costar-glossary#go_c. Accessed 23 Oct. 2023. 13 Page 5 of 30 FIGURE 15: CITY OF ASPEN, CO – RETAIL ABSORPTION, NET DELIVERIES, AND VACANCY TRENDS, SOURCE: COSTAR Commercial Real Estate Capitalization (CAP) Rates Commercial real estate capitalization (CAP) rates are defined by Costar as the “income rate of return for a total property that reflects the relationship between one year's net operating income expectancy and the total price or value. Calculated by dividing the net operating income by the sale price or value.” Typically, a lower CAP rate implies that the property is more valuable and less risky due to type, class, and market3. According to data retrieved from Costar, the CAP rate for retail in Aspen is 5.9%, which is lower than that of many cities in the surrounding region, including Denver (6.2%), Steamboat Springs (6.5%), Basalt (6.4%), Vail (6.5%), Fort Collins (6.6%), Telluride (7.3%). This suggests that investing in retail property is comparatively less risky, and of greater value, in Aspen than in the other cities included here. 3 “Cap Rate 101: Definition, Calculation & Good Cap Rate Factors.” Commercial 1 Brokers, 9 June 2022, commercialonebrokers.com/what-is- capitalization-rate-1/. 14 Page 6 of 30 Retail: Foodservice Foodservice in Aspen Aspen has a vibrant and rich culinary scene, with dozens of restaurants that can satisfy different tastes and budgets. However, because of Aspen’s status as a vacation destination and resort community for wealthier individuals, food options are often tipped towards more expensive and contemporary dining options. Particularly since the onset of the COVID-19 pandemic, Aspen has seen many of its more affordable restaurants permanently close and an end to more economical bar menus, leaving limited options for residents and visitors who may be looking for a more affordable dining experience. Through community outreach the City of Aspen has identified lower priced dining options as a potential priority use for the Armory building. The following section examines the current foodservice environment within Aspen in order to gauge demand for lower priced dining options. Foodservice Inventory In larger, more land abundant communities, foodservice providers are typically located either in pad style development, strip style development, or as a ground floor tenant in a larger mixed use commercial or residential building. In Aspen, however, foodservice providers are almost exclusively singular tenants in larger mixed-use developments. As a result, it is challenging to isolate the exact proportion of foodservice provider leased square footage compared to overall retail commercial square footage. An examination of overall retail performance in Aspen can be found earlier in this section. Foodservice Delivery Models Foodservice can be delivered in a variety of models, each of which is highly dependent on factors including local and regional market, location, target customer type, and typology of restaurant. The following section describes different foodservice models and their strengths and weaknesses and provides guidance and to which model may make the most sense for the Armory building. Table Service Restaurant 4 Table Service Restaurants are the model that most people associate with full-service restaurants (FSRs). Table Service Restaurants are full-service restaurants where guests are typically greeted by a host and seated at a table. Once at their table guests interact with a server to take their drink and food orders, ask questions, or share special requests, and provide payment. Food runners and bussers typically deliver prepared food and clean tables. This is the standard service model for all full-service restaurants. Strengths of the Table Service Restaurant model are that it provides predictable and generally attentive experience to patrons. It is also a model that most foodservice employees have worked in, which enables staff to quickly pick-up on procedures and rotate in and out of the restaurant as needed. Additionally, this model is one that many operators are familiar with and can implement quickly and efficiently. Weaknesses of the Table Service Restaurant Model are that they are often subject to the problems facing the foodservice industry, such as higher labor cost due to increased staff overhead and a server-centric flow of service that can sometimes result in delays or miscommunications. The Table Service Restaurant model is a strong option for food service within the Aspen Armory. It can be easily implemented by an experienced operator, it provides attentive service to customers, and it requires a space layout and design that can be shifted to alternative owners or operators as needed. Counter Service Restaurant5 Counter Service Restaurants use less staff labor as they require more work from restaurant guests. Guests typically place their order off of a limited menu at a counter. Depending on the type of Counter Service Restaurant, guests either receive their order while they wait at the counter or are given a number or buzzer and then receive their order once it is available. Payment is almost always conducted prior to leaving the counter, after which there are usually no more guest interactions. 4 How to Choose the Right Restaurant Service Model | On the Line | Toast POS (toasttab.com) 5 Ibid. 15 Page 7 of 30 The strengths of Counter Service Restaurants are that they typically have lower labor costs as there are fewer staff in the front of house. Additionally, Counter Service Restaurants typically have smaller and simplified back-of-house operations as their menus are often more limited and require less space to prepare and store food. Weaknesses of Counter Service Restaurants are that their limited menu can mean less marketability to guests. Additionally, because ordering additional food or beverages require that patrons stand in line and order at the counter, guests often order once and then leave the restaurant once they are finished. While this can quickly turn tables over for more guests, it also means that guests are less likely to stay for longer periods of time to catch up with friends they visit with or may run into, which can detract from certain desired dining experiences. The Counter Service Restaurant model is also a strong option for food service within the Aspen Armory. It requires less space than a Table Service Restaurant, can act as a quick to-go option for lunches or breakfasts, and requires less staff to operate. Food Hall67 In recent years Food Halls have become an increasingly popular foodservice model. Food Halls are typically a mix of counter service style restaurant concepts whose food items are usually cooked from scratch on-site at the time of ordering. Options within a food hall are usually multicultural and diverse, enabling customers to have a wide range of dining options when visiting. In a Food Hall model customers order at the counter of the vender of their choice, and then either receive a pager or number for them to retrieve their food or for a food runner to bring them their food. Foodhall concepts are sometimes accompanied by a brewery or bar. Seating within a Food Hall is usually communal and in an inviting and aesthetically pleasing space, creating a destination where patrons can linger after their meals. Strengths of Food Halls are that they offer guests multiple choices, enabling groups of all sizes to find options that satisfy their needs, while also allowing individuals to try multiple cuisines simultaneously. Food Halls also enable aspiring restaurant operators the chance to develop a concept at a lower cost as they are typically leasing a small space with relatively low labor costs. Finally, food halls offer diners a quick and casual experience where they can either grab something to go or sit down and enjoy a casual meal. Weaknesses of Food Halls are that their success is highly dependent on location, population density, and their operational model. Food halls require a significant amount of foot traffic during hours of operation to both sustain their multiple vendors while also making the space feel alive and inviting during all hours of the day. Even in major cities, many food halls can struggle to attract sufficient visitors to keep all vendors in business, indicating that there is a balance to be struck between population size and number of vendors within a space. Additionally, choosing an operational model that reduces risk and maximizes flexibility for both the landlord and tenants is important to ensure that space can easily transition to a new vendor as needed and that sufficient financial incentive exists to attract new and innovative tenants. Based on Aspen’s location and population size, a Food Hall concept would likely be challenging to implement in the Armory building. However, one or two smaller foodservice concepts, such as a coffee or sandwich shop, within the armory may be appropriate to complement other uses in the building and provide additional food options to residents. Foodservice and Affordability Defining what is affordable within foodservice can be challenging because what each person is willing to pay for dining often varies depending on factors such as their income, the size of their party, or the occasion. Because of the variability of what may be perceived as “affordable” dining options, this study focuses instead on analyzing dining options within Aspen by price tiers. These tiers allow for the grouping of restaurants by average cost per individual and enable restaurants to be divided up into a lower cost group of restaurants ($ and $$) and higher cost restaurants ($$$ and $$$$). A description of each tier of the dollar sign pricing method can be found below. It should be noted that the dollar sign pricing reflects cost per individual, not costs for a group, and does not consider the purchase of alcohol. 6 What is a Food Hall? | On the Line | Toast POS (toasttab.com) 7 2023-03-06_-_FOOD_HALLS_2023-DOWNLOAD.pdf (flowcode.com) 16 Page 8 of 30 • $: Inexpensive, usually $10 and under. • $$: Moderately expensive, usually between $10 and $25. • $$$: Expensive, usually between $25 and $45. • $$$$: Very expensive, usually $50 and up. Common Typologies of Foodservice Food and beverage providers come in a variety of forms and price points. The following section describes common typologies of food and beverage service providers and defines common characteristics of each. Because food prices can vary widely by location, time of year, and other factors, the following typology descriptions use the dollar sign ($) pricing method that is used by Google, Yelp, Facebook, and other entities. Quick Service Restaurants8 Also referred to as Grab and Go or Fast Food, Quick Service Restaurants feature a limited menu and generally serve items that can be prepared quickly or in advance. Most quick service restaurants require customers to place their order at a counter and retrieve their food once it’s ready. They are minimally staffed and usually have limited seating for customers. Characteristics: • Service Style: Counter service and/or drive-thru service. • Menu: Limited menu options like burgers, sandwiches, and salads. • Interior: Casual, functional dining spaces that are easy to clean. • Examples: Grateful Deli, New York Pizza, Paradise Bakery. • Price $-$$. Fast Casual Restaurants Fast-casual eateries combine elements of Quick Service Restaurants with menus that tend to have more variety and choices. Build-your-own menus are a common fast-casual concept, featuring sandwiches, wraps, or burritos that are prepared fresh to order. Ordering, payment, and food pickup are all performed at the counter. There is often more seating in a contemporary style dining space. Some fast casual restaurants may perform limited table service by delivering orders, but there is generally no serving staff. Characteristics: • Service Style: Counter service or limited table service. • Menu: Sandwiches, subs, salads, wraps, or burritos. • Interior: Contemporary but casual. • Examples: Jour De Fete, CP Burger, The Crepe Shack. • Price: $-$$. Casual Restaurants Casual restaurants offer full-service dining, where guests are seated and waited on by the server staff. Casual restaurants provide roomy, comfortable seating and a laid-back atmosphere. Menus contain comfort foods and items that are generally more along the line of cultural staples rather than experimental cuisine. Diners, mom-and-pops, and many popular chain restaurants are considered casual dining restaurants. Characteristics: • Service Style: Full service. • Menu: Classic menu items, comfort foods, large portions. • Interior: Neutral decor, comfortable booth seating. • Examples: Poppycocks, Aspen Public House, Hickory House. 8 Types of Restaurants: 12 Restaurant Concept Ideas (webstaurantstore.com) 17 Page 9 of 30 • Price $$. Contemporary Casual Restaurants Contemporary casual restaurants offer sit-down table service similar to a casual eatery, but they generally have an elevated theme, a trendy menu, and picture-worthy decor. Many contemporary restaurants feature global or fusion cuisine, gluten-free and vegan options, and sustainable practices. These upscale casual restaurants are often independently owned or part of a small regional chain. Characteristics: • Service Style: Table service, mobile order-and-pay, QR code menus. • Menu: Trendy cuisine, farm-to-table, global flavors, diet-inclusive options. • Interior: Thoughtful, vibrant decor that stands out in a photo. • Examples: Parc Aspen, White House Tavern, French Alpine Bistro. • Price $$-$$$. Fine Dining Restaurants Fine dining restaurants are usually of the highest formality and price. Guests are sometimes expected to follow a dress code when dining out at an upscale establishment and staff prioritize service and experience. Fine dining menus typically feature items that you wouldn't eat every day, like caviar, steak tartare, or foie gras. They strive to give dining an exclusive feel and are usually reserved for special occasions, such as an anniversary, a birthday, or a wedding. Characteristics: • Service Style: Full table service with etiquette rules. • Menu: Pricey, exclusive items and prix fixe menus. • Interior: Elegant, sophisticated décor. • Examples: Matsuhisa, Steak House No. 316, Bosq. • Price $$$-$$$$. Foodservice Demand and Positioning in Aspen In order to assess the demand for additional lower priced foodservice options in Aspen, Design Workshop analyzed all foodservice providers currently in operation within the city. In total Design Workshop identified 61 foodservice providers ranging from quick service restaurants to fine dining establishments. The analysis examined the distribution and availability of foodservice options by price, typology, and hours of operation. The following section details the findings of the analysis. Distribution of Restaurants by Affordability & Hours of Operation Of the 61 restaurants currently in operation within the City of Aspen, 33 restaurants, or 54%, are $ - $$ restaurants, meaning that guests can typically expect to spend $25 dollars or less on their meal (not including alcohol sales). Of the 33 $ - $$ options, 13 are open during breakfast hours, 32 are open during dinner hours, and 17 are open during dinner hours. This is in contrast to more expensive $$$ - $$$$ options, which are less available during breakfast and lunch hours but more available during dinner hours. Of the 28 $$$ - $$$$ restaurants, three are open during breakfast hours, 9 are open during lunch hours, and 28 are open during dinner hours. When examining the availability of one- and two-dollar sign options during different mealtimes, there is significantly more availability of less expensive dining options during breakfast and lunch hours. During dinner hours, however, the availability of less expensive dining options shrinks dramatically, with only 38% of dining options being $ and $$ and the remaining 62% of dining options being three- and four-dollar signs. This is a significant departure from what is typically seen in larger markets, where the foodservice landscape behaves more like a bell curve, with a large number of options priced moderately, and fewer options priced at more expensive levels. 18 Page 10 of 30 Through conversations with staff and feedback collected through surveys and other methods of public engagement, public perception is that there are very limited lower priced dining options within Aspen. Based on the analysis of restaurants by price shown in Table 10, this appears to be partially true, with just over half of all restaurants being priced at $ and $$ levels. What is apparent, as noted above, is that the availability of $ and $$ options drops off dramatically after lunch hours. $ and $$ options make up 75% of all breakfast options, 76% of all lunch options, but only 38% of all dinner options. With dinnertime being a popular meal to choose to eat at a restaurant, it is clear why there is a perception that there could be lower priced options available to residents. TABLE 10: ASPEN FOODSERVICE PROVIDERS BY AFFORDABILITY AND HOURS OF OPERATION Distribution of Restaurants by Typology & Hours of Operation When examining the 61 restaurants currently in operation within the City of Aspen by typology, 11 are classified as Quick Service, 7 as Fast Casual, 13 as Casual, 22 as Contemporary Dining, and 8 as Fine Dining. The majority of Quick Service and Fast Casual restaurants are open during breakfast and lunch hours. Casual restaurants are mostly open during lunch and dinner hours. Contemporary Casual and Fine Dining are mostly open during dinner hours. In looking at the distribution of restaurant typologies by hours of operation there is a pattern as to the types of restaurants that are available during different mealtimes. Guests choosing to dine out for breakfast are mostly visiting restaurants that have a more casual atmosphere or where they can grab something quickly and leave. Guests choosing to dine out during lunch have a variety of restaurant typologies to choose from, ranging from quick grab- and-go style options to full-service casual and contemporary casual options. Guests choosing to dine out during dinner have less options, with 68% of restaurants available during dinnertime hours falling under the contemporary casual and fine dining typologies. The remaining 32% of restaurants open during dinnertime hours are either Quick Service, Fast Casual, and Casual restaurants. A breakdown of restaurants by foodservice provider typology and hours of operation can be found in Table 11, while a breakdown of restaurants by typology and price can be found in Table 12. This information, when paired with the findings that there are only 17 $ and $$ restaurants out of 45 total restaurants open during dinner dining hours begins to tell the story of what many in Aspen are likely experiencing. Not only do they have limited dining options during dinner hours, but of the options that are available, only 10 are full-service restaurants (8 casual restaurants and two contemporary casual restaurants) that can provide the type of authentic and relaxing dining experience that many in Aspen are likely looking for. TABLE 11: ASPEN FOODSERVICE PROVIDERS BY TYPE AND HOURS OF OPERATION Foodservice Provider Pricing Per Person Number of Foodservice Providerss within Pricing Tier Percent of Total FoodService Providers Open During Breakfast Hours (6:00 - 11:00 am) Open During Lunch Hours (11:00 am - 5:00 pm) Open During Dinner Hours (5:00 - 10:00 pm) $: Inexpensive, usually $10 and under 8 13%3 8 3 $$: Moderately expensive, usually between $10 and $25 25 41%10 24 14 $$$: Expensive, usually between $25 and $45 14 23%2 8 14 $$$$: Very expensive, usually $50 and up 14 23%1 1 14 Total 61 100%16 41 45 Foodservice Provider Typology Total Number of Foodservice Providers within Typology Percent of Total FoodService Providers Open During Breakfast Hours (6:00 - 11:00 am) Open During Lunch Hours (11:00 am - 5:00 pm) Open During Dinner Hours (5:00 - 10:00 pm) Quick Service 11 18%6 11 3 Fast Casual 7 11%2 6 2 Casual 13 21%3 11 8 Contemporary Casual 22 36%3 9 20 Fine Dining 8 13%0 0 8 Total 61 100%14 37 41 Foodservice Provider Typology Total Number of Foodservice Providers within Typology $: Inexpensive, usually $10 and under $$: Moderately expensive, usually between $10 and $25 $$$: Expensive, usually between $25 and $45 $$$$: Very expensive, usually $50 and up Quick Service 11 5 6 0 0 Fast Casual 7 2 5 0 0 Casual 13 1 12 0 0 Contemporary Casual 22 0 2 14 6 Fine Dining 8 0 0 0 8 Total 61 8 25 14 14 19 Page 11 of 30 TABLE 12: ASPEN FOODSERVICE PROVIDERS BY TYPE AND AFFORDABILITY Foodservice Risks Capital Development Costs 9 One of the most costly components of developing a foodservice concept is the build out of a commercial kitchen that can process orders in mass quantities. Costs for a commercial kitchen can vary widely based on the size of the space, the quality of the materials used, and the number of specialized pieces of equipment in the kitchen, some of which can cost up to $20,000 per unit. Development costs don’t stop at the kitchen, as there are also important building considerations and costs involving exhaust and fresh air intake that, depending on the location of the kitchen inside the building, can be very expensive to construct. Utility lines within a building may also have to be upgraded as the water, sewer, electricity, and gas capacity required for kitchens is often higher than those required for typical retail tenants. It is important to note as well that commercial kitchens and their equipment are often tailored to a specific food concept and not always transferable to a new tenant. If a food concept fails, then outfitting the kitchen for a new tenant may require significant demolition and new construction. Because commercial kitchens are so dependent on the user and can be so highly customized, identifying broad cost estimates can be challenging with estimates for a 3,000 square foot kitchen ranging from $350,000 to $650,000, or $117 per square foot to $217 per square foot. It should be noted that these costs are likely higher in Aspen due its location and competitive market. Staffing Many industries have struggled with staffing since the beginning of the COVID-19 pandemic. The food service industry has been impacted particularly hard as problems with recruitment and retention persisted even prior to the pandemic. Specifically, workers within the food service industry have been hard to retain due to long hours, low pay, lack of benefits, burnout, and competition from nearby restaurants. Aspen in particular has been hard hit by staffing challenges due to employers in the food and beverage and other retail industries being unable to attract and retain staff and pay a wage that can accommodate the region’s high cost of living. Staffing in Aspen is likely to be particularly challenging as there are many restaurants that can offer employment and pay competitive wages in Aspen, as well as in down valley communities. While lower priced food service options in the Armory may be able to see savings on rent for their space, labor costs are likely to be in line with other food service providers throughout the community, which in turn may drive up food costs and result in unpredictability around pricing and operating costs. If food service is selected as a preferred use within the Armory Building, understanding the operator’s anticipated business strategy related to hiring and retention will be a key consideration. Permanence of Building Modifications As noted in the capital development costs section above, restaurants often require considerable building modifications. These modifications are not only costly, but once made are generally permanent as the cost to convert the space into something else is prohibitive. Once a space is retrofitted to accommodate a foodservice provider, the space is often unable to meet the needs of a traditional retailer, who may just require space to show and store goods. As a result, the city may have difficulties in attracting other retailers to the armory and may be forced to subsidize the cost of empty space until a new foodservice provider tenant is able to be secured. Implications on Competing Restaurants Aspen has a strong restaurant market with offerings that can serve a variety of tastes and price points. There are, however, more limited options available at lower price points than at higher price points. While it is impossible to predict the impact that new affordable foodservice options within the Armory may have, there is a possibility that affordable restaurants that currently exist today could face additional competition that could affect their business. 9 Estimating Build-Out Costs and Rental Rates for Commercial Kitchens | LoopNet.com 20 Page 12 of 30 Foodservice within the Armory Building There is clear demand from residents for less expensive dining options and there exists a lack of available $ and $$ restaurants, particularly during dinner hours, within the market. Of the options that are available, only a few are full- service restaurants that can provide the hospitable and relaxing experience that many within the community likely desire. Given the significant size of the Armory, foodservice could take multiple forms within its walls, enabling users to have different types of dining experiences and options throughout the day. At minimum, space within the armory should be reserved for a full-service casual dining concept that is priced at or around the $$ price point. This concept could be complimented by one or two additional quick service concepts found elsewhere in the building. For example, the Armory could have a coffee/breakfast quick service option and a lunch quick service option that operating during daytime hours to drive traffic within the Armory. These would complement a full-service restaurant that is open during dinner hours and drive traffic to the Armory during the evenings. Additional study is recommended to assess the exact sizing and location of foodservice options within the Armory, as well as the operational model that would work best for the final building program. 21 Page 13 of 30 Retail: Goods & Services Common Typologies of Retail The retail typologies below help segment retail offerings for large markets by types and formats of products or services sold as well as typical location and store size. However, they do not always indicate the types of products sold and may overgeneralize store typologies for markets like Aspen, which are primarily made up of specialty, convenience, and food and beverage-based businesses. For example, the typology “specialty retailer” suggests a narrow selection of products and services, but not a particular category. Specialty retailers could include boutiques, hardware stores, hair salons, pet stores, art galleries, toy stores, bookstores, pet stores, etc. Comparatively, the retail typology of “supermarkets” is typically assumed to focus on perishable, food-based products. Unless otherwise noted, the definitions provided below are directly quoted from CoStar’s Glossary 10. • Grocery / Supermarket: “Commonly referred to as supermarket, market, or grocery store. These buildings are often freestanding or stand-alone in design, and anchor neighborhood/community centers. Tenants range from smaller local, independent grocers to the regionally/nationally owned supermarket chains. Buildings usually have some truck loading capability in the rear (grade level, truck well, dock hi, etc.).” • Convenience Stores: “Free-Standing or Stand-Alone buildings typically 1,500 to 3,000 sf. Example: 7-11, Quick Trip, Circle K. May also have a couple of gas pumps, however, the primary business/use is the store itself. This use also includes small market/grocery type stores (typically 3,000 to 7,500 sf) that are not large enough to be classified as supermarkets.” • Specialty Store11: “Specialty stores typically focus on a single category of products or services, which require higher levels of knowledge and customer service to sell. For example, specialty stores may include Ace Hardware, Radio Shack, and D'Angelico Guitars Aspen Showroom.” Goods & Services in Aspen For the purposes of this analysis, retail categories with higher levels of specificity were defined to establish an understanding of the existing retail market in Aspen, Co. The retail categories for Aspen’s market are defined as follows: • Apparel: The three categories defined below help to provide context and general observations for apparel- based products in Aspen’s retail market. Notably, the terms “affordable” and “expensive” have been excluded from these definitions as consumers’ willingness to pay and determination of affordability is subjective and based on a range of variables including personal values, for which this analysis cannot account for. As a result, the categories here are intended to help illustrate the types of products currently available in Aspen as well as potential gaps or limited offerings in the market. • Active/Outerwear & Accessories: Accessories including jewelry, handbags, leather goods, outerwear, sport apparel, shoes, and outerwear. This category is primarily made up of adult-focused retailers, however some retailers included offered high-end children’s accessories at luxury price-points. “Luxury prices” were defined as having all or most items priced above $100.00. Many retailers in this category offer most products for several hundreds to thousands of dollars per item. • Luxury Retail: Stores primarily sell high-quality, and sometimes custom, items at luxury price points (defined above). • Lifestyle & Family: Stores offering moderately priced clothing and accessories for children/teens. “Moderately priced” for children/teens was defined as having multiple items available at or below $50.00. This category also includes retailers offering casual clothing and workwear for adults at “mid-range prices”, which was defined as having many products for sale between approximately $50 and $250. • Auto / Transportation: Products and services related to automobiles, including but not limited to gas stations, car rentals, maintenance, and repairs. This category also included aviation-related goods and services. 10 Costar glossary. CoStar Glossary | CoStar North America. (n.d.). https://www.costar.com/about/costar-glossary#go_c 11 Albrecht, Dr. Maria Gomez, et al. “18.2 Major Types of Retailers - Principles of Marketing.” OpenStax, OpenStax, openstax.org/books/principles-marketing/pages/18-2-major-types-of-retailers. Accessed 23 Oct. 2023. 22 Page 14 of 30 • Décor / Home Goods / Artisanal Gifts: Products and services related to florals, gifts, antiques, and home décor. • Fine Art: High-quality, custom art dealers, galleries, and stores. • Food & Beverage: Includes all bars, restaurants, bakeries, grocery, and convenience stores. • Health & Wellness: Retailers offering fitness-related services, medicinal products, dermatological, cosmetic and beauty products, as well as health practitioners, salons, spas, and pharmacies. • Personal / Professional Service: Banking, legal, accounting, finance and insurance-related services, as well as packing and shipping services, IT, and consulting. • Real Estate / Architecture / Construction / Development: All products and services related to real estate development. • Specialty: Retailers focused on a narrow range of product categories such as books, electronics / cell phones, guitars, and hardware. Goods & Services Inventory According to data retrieved from CoStar’s Commercial Tenant platform, which provides a comprehensive list of all commercial tenants in a given geographic area, there are approximately 600 tenants in 155 properties in Aspen. Tenant “space-use types” include office, industrial, retail, flex, and medical. Of the 600 total tenants, 334 located in 108 properties 12 are listed as using their spaces for retail purposes. 334 retailers were reviewed and cross- referenced with publicly available records to account for recent changes, including closures and relocations. The resulting list includes 279 retailers, which are organized by the categories defined above. The results, illustrated by Figure 16 below, show that Aspen’s retail market, excluding food & beverage (18%), which is covered in depth in Foodservice Chapter of this analysis, is largely made up of retailers carrying high-end activewear and accessories, health & wellness products and services, and personal/professional services. The two categories with the smallest number of tenants are décor/home goods/artisanal gifts, and family and lifestyle apparel. While further analysis is needed to determine causation, an initial observation of the tenant distribution analysis is that there are the fewest apparel-based tenants in the lifestyle & family category, which makes up just 4% of total retail tenants and has the most mid-range priced retailers. Additionally, the fine art category, which includes high- quality, custom art dealers, galleries, and stores, makes up 7% of retail tenants, while décor / home goods / artisanal gifts, including products and services related to florals, gifts, antiques, and home décor, makes up just 2% of retail tenants. This may indicate that high-end brands with luxury price points are capable of supporting retail rental prices in Aspen, while mid-range priced retailers struggle to support operating costs. The City of Aspen may be well- positioned to support new retailers in the Armory, particularly those with low-to-mid-priced goods, through subsidized rent prices. 12 This number is slightly higher than the 106 properties reported above in the “Real Estate Trends & Forecasts” section because some retailers use spaces that are technically classified as office or flex for retailing purposes. 23 Page 15 of 30 FIGURE 16: ASPEN RETAIL TENANT DISTRIBUTION, SOURCE: COSTAR TENANT RECORDS, CATEGORIZED BY DESIGN WORKSHOP Apparel-Based Retail Tenant Distribution As illustrated by Figure 16 above, apparel-based businesses make up approximately 22% of all retail tenants in Aspen. Figure 17 below shows the distribution of apparel and accessory retailers across the three apparel-based retail categories previously defined. The majority (45%) of apparel-based businesses in Aspen focus on active/outerwear products. The second largest retail category is luxury retailers at 35% of apparel-based tenants, and the smallest category is lifestyle & family. 18% 11% 11% 11%7% 10% 9% 9% 7% 2%4% Aspen Retail Tenants - Distribution by Category Food & Beverage Apparel - Active/Outerwear & Accessories Health & Wellness Personal / Professional Service Apparel - Luxury Retail Specialty Auto / Transportation Real Estate / Architecture / Constr. / Dev. Fine Art Décor / Home Goods / Artisanal Gifts Apparel - Lifestyle & Family 24 Page 16 of 30 FIGURE 17: ASPEN APPAREL & ACCESSORY RETAIL DISTRIBUTION, SOURCE: COSTAR TENANT RECORDS, CATEGORIZED BY DESIGN WORKSHOP Apparel – Active/Outerwear & Accessories Retail Category Detail (45% of Apparel-Based Tenants) Figures 18, 19, and 20 below show the brand types, demographics served, and products sold for tenants in the active/outerwear & accessories category. Examples of Retailers in this category include The Golden Goose, Orvis, Aspen Hatter, Ute Mountaineer, Kate Maller Jewelry, and Christy Sports. The majority (67%) of brands are locally based, meaning that they are solely based within Aspen or have a few select locations within the region. Additionally, 74% of tenants have unisex products, 19% primarily serve women, and 0% serve men alone. A small portion (7%) of stores in this category offer products for children. The top two product offerings in this category are jewelry (30%) and sporting goods (48%). As stated previously, many retailers in this category, a large portion of which are luxury ski apparel and jewelry/watch retailers, offer most products for several hundreds to thousands of dollars per item. FIGURE 18: ASPEN ACTIVE/OUTERWEAR & ACCESSORY BRAND TYPES, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES 45% 20% 35% Aspen Apparel & Accessory Retailer Distribution by Category Active/Outerwear & Accessories Lifestyle & Family Luxury Retail 30% 4%67% Active/Outerwear & Accessories Brand Types International National Local 25 Page 17 of 30 FIGURE 19: ASPEN ACTIVE/OUTERWEAR & ACCESSORY PRIMARY DEMOGRAPHICS SERVED, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES FIGURE 20: ASPEN ACTIVE/OUTERWEAR & ACCESSORY PRODUCTS SOLD, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES Apparel – Luxury Retail Category Detail (35% of Apparel-Based Tenants) Figures 21, 22, and 23 below show the brand types, demographics served, and products sold for tenants in the luxury retail category. Examples of Retailers in this category include Henry Beguelin, Prada, Gucci, Res Ipsa, Kemo Sabe, and The Little Bird. The majority (67%) of brands are internationally based, meaning that they have locations around the world. Additionally, 38% of tenants have unisex products, and 29% have both unisex and products for children, 29% primarily serve women, and 5% serve men. The top product offering in this category is clothing/accessories (90%). As stated previously, retailers in this category have “luxury price points,” and offer high- quality, and in some cases designer and custom products. 74% 7% 19% 0% Active/Outerwear & Accessories Primary Demographics Served Unisex Unisex / Children Women Men 30% 4% 4%48% 7%4%4% Active/Outerwear & Accessories Products Sold Jewelry and Accessories Glasses Shoes Sporting Goods Athleisure and Fitness Hats Bags 26 Page 18 of 30 FIGURE 21: ASPEN LUXURY RETAIL BRAND TYPES, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES FIGURE 22: ASPEN LUXURY RETAIL PRIMARY DEMOGRAPHICS SERVED, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES 67% 14% 19% Luxury Retail Brand Types International National Local 38% 29% 29% 5% Luxury Retail Primary Demographics Served Unisex Unisex / Children Women Men 27 Page 19 of 30 FIGURE 23: ASPEN LUXURY RETAIL PRODUCTS SOLD, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES Apparel – Lifestyle & Family Retail Category Detail (20% of Apparel-Based Tenants) Figures 24, 25, and 26 below show the brand types, demographics served, and products sold for tenants in the lifestyle & family category. Examples of Retailers in this category include Overland, J.McLaughlin, Ralph Lauren, Aspen T-Shirt Company, Monkeys, and Peruvian Connection. About half of brands are internationally based, with 25% being locally based and 25% being nationally based. Of the three categories of apparel-based tenants, family & lifestyle retailers have the largest percentage of national brands, meaning they have locations throughout the United States. Most stores in this category offer unisex products and children’s products (58%). Approximately 25% of retailers in this category primarily serve women, 0% serve men alone, and 17% focus on unisex products and 58% offer unisex products and items for children. The top product offering in this category is clothing/accessories (50%). T-shirts account for 25% of this category. Kid’s apparel, Loungewear, and Athleisure each account for 8%. As stated previously, retailers in this category have “mid-range points,” and offer casual, everyday apparel for adults and children, as well as workwear for adults. FIGURE 24: ASPEN LIFESTYLE & FAMILY BRAND TYPES, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES 90% 5%5% Luxury Retail Products Sold Clothing and Accessories Loungewear Shoes and Accessories 25% 25% 50% Lifestyle & Family Brand Types International National Local 28 Page 20 of 30 FIGURE 25: ASPEN LIFESTYLE & FAMILY PRIMARY DEMOGRAPHICS SERVED, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES FIGURE 26: ASPEN LIFESTYLE & FAMILY PRODUCTS SOLD, SOURCE: COSTAR TENANT RECORDS AND TENANT WEBSITES Retail Demand and Positioning in Aspen The above analysis indicates that Aspen has a strong retail market and can support additional retailers and new retail space. Preliminary observations also indicate that there are many retailers offering sporting goods and luxury retail products, while artisanal goods, products for children, and mid-range priced apparel items are less saturated. Key findings from the previous two sections are summarized below. Key Findings from Retail Real Estate Trends and Forecasts (Including Goods & Services and Foodservice) • Occupancy: Aspen’s retail occupancy is extremely high with 99.7% of space occupied as of Q3 2023. • Vacancy: Vacancy rates are projected to continue to remain low over the next five-year period, ranging from between 0. 1% and 0.3% between 2023 and 2028. Given historic and projected vacancy trends, it is 17% 58% 25% 0% Lifestyle & Family Primary Demographics Served Unisex Unisex / Children Women Men 50% 8% 8% 25% 8% Lifestyle & Family Products Sold Clothing & Accessories Athleisure and Outerwear Loungewear T-Shirts Kid's Apparel 29 Page 21 of 30 predicted that vacancy rates within the Aspen retail Market will continue to remain low, even as more retail products are introduced into the market. • Deliveries & Absorption: Historic trends indicate that as existing or new retail space is introduced, the market is quick to absorb it, with a 50% chance that space will be leased within 6 months. • Rent: The current market rent per square foot in Aspen is $96.57. Rental rates within have been climbing steadily for the past ten years, rising from $74.75 in 2013 to their current high of $96.59, and are forecasted to continue rising, growing to $102.50 by 2028. Current asking rent ($142.46) is greater than market rent ($96.59), a positive within the market that can be interpreted to mean that there is sufficient demand within the market to both lease space without offering incentives or lease to competing tenants who are offering rental rates greater than market rate. Key Findings from Goods & Services Retail Tenant Distribution Analysis • Aspen’s retail market is largely made up of retailers carrying high-end activewear and accessories, health & wellness products and services, and personal/professional services. The two categories with the smallest number of tenants are décor/home goods/artisanal gifts (2%), and lifestyle & family apparel (4%). • Apparel-based businesses make up approximately 22% of all retail tenants in Aspen. The majority (45%) of apparel-based businesses in Aspen focus on active/outerwear products. The second largest retail category is luxury retailers at 35% of apparel-based tenants, and the smallest category is lifestyle & family. • This suggests that approximately 80% of retail tenants in Aspen focus on offering high-end goods at high- end to luxury price points. Goods & Services Retail within the Armory Building A Space for and by Locals | Goods & Services Retail as a Complement Through previous engagement efforts, the City of Aspen and its partners have collected feedback and insights from stakeholders related to the new vision and uses for the Armory. One of the concepts suggested was a Maker’s Market, which would function similarly to a food hall operation, but would include a mix of complementary uses throughout the space. Spaces for lifestyle & family retail, local artisan-based businesses, boutiques, and start-ups would be the focus of the retail component in this model. The Armory would be redeveloped into an incubator for local entrepreneurs looking to have small storefronts and places to meet with clients. It would also provide a space for people to try out new concepts and ideas before signing leases for larger spaces. The first floor would be the primary retail space, offering small customer-facing street-level storefronts available for lease. Smaller spaces with subsidized rent prices may also help to create a sustainable operating model for lifestyle & family retailers with mid-range priced products. The first floor could also include some small food and beverage concepts such as a coffee shop and sandwich shop, smoothie place, salad bar, a wine bar, or a place to grab cocktails while shopping. The basement could be a supporting space as a working studio space for local artists who sell products on the first floor. The upper level of the building could include a mix of additional flex spaces. Goods & Services Retail Viability & Associated Risk A Maker’s Market aligns well with the priorities for the new Armory space, which included a local focus and places to gather. In addition to supporting locally based artisans, this concept supports community members by increasing the diversity of products in the retail market and providing new social spaces. Given the sufficient tenant demand in the retail market illustrated by asking rents higher than market rents, as well as high absorption rates and low projections for new deliveries, new retail space is a viable option for the adaptive reuse of the Aspen Armory building. Additionally, renovations required to convert spaces to be used for retail would be less-industry specific than those required for food and beverage operations, and would likely be less costly, less time-consuming, and less permanent/prohibitive, should a new use be considered in the near future. Should the City of Aspen support this type of development, it is unlikely that it would compete with existing retailers or retail spaces available for lease as the small-scale booth-style spaces would serve a new demographic of tenants and store-types. 30 Page 22 of 30 Non-Profit Office Space Non-Profit Office Space in Aspen Through community outreach, the City of Aspen has identified non-profit space as a potential priority use for the Armory building. The following section examines the availability within Aspen in order to gauge demand for these types of flexible meeting space within the Armory Building. Non-Profit Typologies in Aspen Aspen and the Roaring Fork Valley are home to dozens of active non-profits that support and champion a wide variety of causes. Funding for these non-profits comes from a variety of sources, such as the Aspen Community Foundation, which administers a donor driven grant making fund, and from individual doners who either live in the region full-time or part-time. The following section defines the primary types of non-profits operating within Aspen and provides examples of each. A list of active non-profits from the Aspen Chamber Resort Association can be found in Table 13. Arts and Culture Arts and Culture play a major role in Aspen’s identity and tourism economy. To that end, the town is home to multiple arts and culture non-profit organizations that champion different aspects of the arts. These organizations include Aspen Film, Aspen Journalism, Aspen Public Radio, Jazz Aspen Snowmass, and Theatre Aspen. These organizations provide arts related services and events throughout the year that support both residents and visitors. Environment and Education Aspen has historically been at the forefront of the environmental movement. Because of its role as a champion for environmental innovation and policy, many environmental and education non-profits have chosen to make their home in Aspen. Organizations such as the Aspen Center for Environmental Studies, the Farm Collaborative, and the Environment Foundation advocate for conservation and environmental stewardship, while also leading community education efforts around sustainability. Health and Human Services Aspen, like many mountain resort communities, has significant socioeconomic stratification. As a result, many within the community are unable to access basic health and wellness services, such as health and dental care, addiction support, and literacy and learning support. Organizations such as the Aspen Valley Hospital Foundation, and Community Health Services help to fill critical care gaps and provide resources to Aspen’s most vulnerable. Community Coalitions Several organizations in Aspen focus on building stronger community relationships through grassroot efforts. Organizations such as the Latinx House, the Grassroots Community Network, and Lead with Love support community events, discourse, and engagement within the City of Aspen to enhance community bonds and support individual and community wellbeing. Youth Youth related organizations make up a large proportion of non-profits within Aspen. These organizations, including the Buddy Program, the Aspen Education Foundation, the Aspen Science Center, and Aspen Youth Center support a multitude of youth related causes, including learning and career preparedness, mentorship, and outdoor access. 31 Page 23 of 30 TABLE 13: ACTIVE NON-PROFITS AND PHYSICAL LOCATIONS, SOURCE: ASPEN CHAMBER RESORT ASSOCIATION Non-Profit Office Space Availability within Aspen Affordable commercial office space within Aspen can be very difficult to obtain. With market rate office space vacancy currently at 1% and rents at a 10-year high of $38.87 per square foot, many non-profit organizations likely struggle find suitable space within the city 13. As a result, many non-profits have chosen to build their own spaces, while others have found solutions in city owned buildings. Some of the non-profits list PO boxes and may have their physical offices in down valley communities. The following section details the type spaces that non-profits within Aspen occupy. The Red Brick Center for the Arts 14 The City of Aspen owns and operates the Red Brick Center for the Arts. Built in 1942, the building was once home to Aspen’s elementary, middle, and high schools. In 1991 the school district vacated the building and put it on the market for sale. The Aspen community successfully petitioned the city to purchase the building with the intent of providing a long-term home for the arts, non-profit organizations and other community uses. The building is operated by the Red Brick Council for the Arts. Today, the Red Brick plays a critical role in the community by housing several non-profit organizations, artist studios, and providing a space for the community to engage one another and gather. Of the non-profit organizations listed on the Aspen Chamber Resort Association’s website, approximately one quarter are located within the Red Brick building. Space for non-profits within the building ranges from 616 square feet to 2,157 square feet, with an average space size of 1,000 square feet. Non-profit organizations within the Red Brick building are able to access office space below market rents, enabling them to direct funds toward their mission and service the Aspen Community. Tenants of the Red Brick sign annual leases with rent increasing every to accommodate inflation. Rent for 2023 was on average $2.02 per square foot per 13 Data Retrieved from CoStar, 2023. 14 About Red Brick Arts | Red Brick Center for the Arts (redbrickaspen.com) Non-profit Name Non-profit Address Non profit Type Physical Location In Aspen Type of Physical Location Aspen Psychedelic Resource Center P.O. Box 1696 Aspen Health and Human Services No N/A Aspen Science Center P.O. Box 4669 Aspen Environment and Education No N/A AspenOUT P.O. Box 3143 Aspen Community Coalition No N/A Environment Foundation P.O. Box 1248 Aspen Environment and Education No N/A Lead with Love P.O. Box 4829 Aspen Community Coalition No N/A The Latinx House P.O. Box 1208 Aspen Community Coalition No N/A Aspen Center for Environmental Studies 100 Puppy Smith St. Aspen Environment and Education Yes Private Building Aspen Center for Physics 700 W. Gillespie St. Aspen Environment and Education Yes Private Building Aspen Education Foundation Aspen Middle School, 235 High School Road Aspen Youth Yes Private Building Aspen Institute 1000 N 3rd St, Aspen Environment and Education Yes Private Building Aspen Music Festival and School 225 Music School Road, Aspen Arts and Culture Yes Private Building Aspen Valley Hospital Foundation 0401 Castle Creek Road Aspen Health and Human Services Yes Private Building Aspen Valley Ski & Snowboard Club 300 AVSC Dr. Aspen Environment and Education Yes Private Building Aspen Youth Center 0861 Maroon Creek Road Aspen Youth Yes Private Building Colorado Mountain College Aspen/Basalt 0255 Sage Way Aspen Environment and Education Yes Private Building Community Health Services 0405 Castle Creek Road Aspen Health and Human Services Yes Private Building Roaring Fork Transportation Authority 0051 Service Center Dr. Aspen Health and Human Services Yes Private Building The Farm Collaborative 210 Juniper Hill Road Aspen Environment and Education Yes Private Building Americans for Ben-Gurion University 1010 Juniper Hill Dr. Aspen Community Coalition Yes Private Residence Aspen Community Foundation 455 Gold Rivers Court Basalt Arts and Culture No Shared Building Aspen Chamber Resort Association 590 N Mill St Aspen Arts and Culture Yes Shared Building Aspen Elks #224 510 E. Hyman Ave #300 Aspen Community Coalition Yes Shared Building Aspen Film 110 E. Hallam St. Aspen Arts and Culture Yes Shared Building Aspen Journalism 1280 Ute Ave. Aspen Arts and Culture Yes Shared Building Aspen Public Radio 110 E. Hallam St. Aspen Arts and Culture Yes Shared Building Aspen Words 110 E. Hallam St. Aspen Health and Human Services Yes Shared Building Buddy Program 110 E. Hallam St. Aspen Youth Yes Shared Building Challenge Aspen 309 Snowmass Village Mall Snowmass Village Community Coalition No Shared Building Charlie's Angels 4 Autism Foundation 600 Carriage Way Snowmass Village Community Coalition No Shared Building Chris Klug Foundation 110 E. Hallam St. Aspen Community Coalition Yes Shared Building Community Office for Resource Efficiency 111 AABC Aspen Environment and Education Yes Shared Building EcoFlight 307 Aspen Airport Business Ctr Environment and Education Yes Shared Building GrassRoots Community Network 110 E. Hallam St. Aspen Community Coalition Yes Shared Building Jazz Aspen Snowmass 110 E. Hallam St. Aspen Arts and Culture Yes Shared Building Theatre Aspen 110 E. Hallam St. Aspen Arts and Culture Yes Shared Building 32 Page 24 of 30 month. Both artists and non-profits generally pay a similar amount to rent space within the building. With rent significantly below market rates, nonprofits within the Red Brick have been able to secure long-term spaces for their operations, with of many of the nonprofits residing there since the Red Brick’s creations. City Owned Buildings One of Aspen’s more prominent non-profit organizations, the Aspen Chamber Resort Association (ACRA), leases space from the City of Aspen for their office. The building, located north of downtown, is shared with other City of Aspen staff offices. Currently, the building acts as the primary visitor center for guests visiting the city. ACRA also has a kiosk in the Wheeler Opera House and on the Pedestrian Mall at the corner of Galena Street and Cooper Avenue. Organization Owned Buildings Several non-profit organizations, such as the Aspen Center for Physics, The Aspen Institute, The Aspen Education Foundation, and the Aspen Valley Hospital Foundation either own their own building or utilize space within buildings owned by their partner organizations. In many cases these buildings not only serve as staff offices, but also as spaces to host educational and fundraising events or administer services that are core to each organization’s mission. Of the 34 non-profit organizations listed in Table 13, 35% are located within privately owned buildings. Commercial Buildings As noted above, commercial office rent and availability in Aspen can make securing a suitable space for non-profits difficult. However, in a limited number of cases non-profits such as the Community Office for Resource Efficiency, and EcoFlight have found space in commercial buildings. With limited commercial office space currently available and none planned, non-profits requiring space are likely to be forced to look elsewhere down valley. Non-Profit Office Space within the Armory Building Non-profits within Aspen play critical roles in the community, ranging from supporting health and wellness initiatives to enriching the arts and culture that make Aspen such an incredible community. Depending on their missions, however, non-profit organizations often serve targeted groups of individuals, making their appeal less community wide and more individually focused. It is recommended that non-profit space within the Armory be limited, if provided, as they are less likely to drive foot traffic to the Armory building and create the lively and welcoming space that many within the community seem to desire. If non-profits were to be housed within the Armory, it is recommended that their space be limited to the basement of the building to not only allow for more privacy for offices or the administration of services, but also to not clash with other, more energetic uses on other floors of the building. Flexible Meeting Space Flexible Meeting Space in Aspen Aspen’s location and role as a premier recreation destination means that land is at premium. When parcels or spaces become available, they are usually absorbed quickly by the market and dedicated to uses that can generate sufficient revenue to justify their typically high cost. As a result, there are limited spaces in Aspen where community members can gather, and even fewer where the community can gather at low to no cost. Through community outreach, the City of Aspen has identified community space, multipurpose space, and co- working space as potential priority uses for the Armory building. The following section examines the availability within Aspen in order to gauge demand for these types of flexible meeting space within the Armory Building. “Third Places” and their Role in Communities15 In the 1980’s sociologist Ray Oldenburg coined the term “third place” to refer to a physical location other than work or home where there’s little to no financial barrier to entry and where conversation is the primary activity. These third places served an important role in early industrial cities where many lived in small apartments and worked long hours at physically arduous jobs. They were spaces that appealed to those from all walks of life and took the form of French Cafes, German American beer gardens, and English pubs. These third places served an important community 15 “Third places” as community builders | Brookings 33 Page 25 of 30 function as being a space where social classes and backgrounds can be leveled out, creating situations where low- income workers could be sitting and conversing with wealthier individuals and be completely unaware. Particularly in our post-COVID-19 society, these spaces are becoming increasingly rare. As many of our interactions shift to digital mediums and the price to develop and operate low-cost meeting spaces continues to increase, modern development has deprioritized these types of spaces in favor of revenue generating land uses. This is particularly true in a place like Aspen, where premium land values require development to maximize revenues and profitability. This type of development results in more wealth stratified spaces and creates fewer opportunities for those from all walks of life to engage and interact. Flexible meeting spaces within communities can serve the role of a third place, allowing individuals to gather and engage at low to no costs. Types and Availability of Flexible Meeting Spaces within Aspen Flexible meeting spaces can take a variety of forms. The following section describes different types of flexible meeting spaces found within Aspen. A breakdown of flexible meeting spaces within Aspen is illustrated in Table 14. Co-Working16 Co-working spaces have become increasingly popular as remote and flexible work opportunities have increased. Co- working space is a place that can accommodate multiple users from different companies working in a shared environment. These spaces are characterized by shared facilities, services, and tools, and are available on a flexible basis. Typically access to coworking spaces is through a paid membership model, though some spaces allow for drop in users as well. Depending on the size of the space, some are able to accommodate larger groups for presentations or meetings. Aspen currently has one-coworking space called The Aspen Office. The Aspen Office offers users private office space, individual desks in a shared space, and meeting spaces. According to their website, users can access their space for durations ranging from 2 days (minimum) to seasonal or long term. The Aspen Office also hosts quarterly networking and regular social events throughout the year. Public Buildings Public buildings can be considered any building that is owned and operated by a government entity. Within Aspen these buildings include Aspen City Hall, the Pitkin County Public Library, the Aspen Police Station, the Aspen Recreation Center, the Aspen Red Brick, and the Aspen Fire Station. Public buildings generally have rooms available which can be reserved for use by groups or organizations. Some public buildings have small social spaces where individuals can gather. Typically reserving meeting space in public buildings is free of charge, though sometimes a small fee or deposit may be required. Of the public buildings in Aspen, the Pitkin County Library, Aspen Recreation Center, and Aspen Red Brick all have small spaces where individuals can gather. The Pitkin County Library is free to access and the small seating area at the N. Garmisch St. entrance of the Red Brick is free to use by the public. The Aspen Recreation Center requires a membership or payment of a $26 - $28 entrance fee. These public spaces are limited in their capacity and in many cases serve a supporting role in the building’s primary function, meaning that they may be occupied by users of the building during operating hours. For larger groups, the Pitkin County Library, Aspen City Hall, the Aspen Police Station, the Red Brick, and the Aspen Fire Station all have spaces that are available for reservation and use. Most of these spaces are free to use, however, The Red Brick charges a small hourly fee for the use of their space. These spaces often come equipped with tables and chairs and A/V capabilities, enabling them to accommodate a wide range of uses. In many cases, however, these spaces must be rented by a formal organization for meeting purposes and cannot be rented by individuals for smaller gatherings. 16 The Aspen Office 34 Page 26 of 30 Religious Institutions Of the many religious institutions in Aspen, three currently offer spaces for larger groups to meet. Christ Episcopal Church, Aspen Community Church, and Chabad of Aspen all offer spaces for groups to gather. These spaces are currently used by many support groups within the community and religious study groups, many of which either pay a fee or donate to use the space. Other groups may also rent space within these religious institutions, though a fee or donation will likely be required. While religious institutions can offer a place for individuals to gather during worship hours, many are closed during off hours for security reasons. Hotel Event Space Aspen is home to dozens of hotel providers, many of which have event space available for rent by groups. The St. Regis, Hotel Jerome, and the Ritz-Carlton Club all offer event and gathering space rentals. Given the location and upscale status of these hotels, however, many charge high fees for space rentals and are often booked for weddings or other events where an additional banquet charge is required. For individuals who are not guests at these hotel providers, there is limited opportunity to use common space to gather. Paid Membership17 18 Paid Membership spaces are locations that are reserved for use by individuals who pay a monthly or annual fee for their access. These spaces can provide locations for individuals, social circles, or small clubs to gather and participate in activities, work, or just hang out. In Aspen there are currently two paid membership clubs – Here House and Gravity Haus Aspen. Here House is a membership-based social club that provides members with space to work and gather, invitations to exclusive members only events and 24-hour use of their facilities. Here House offers a tiered membership plan ranging from $990 per year to $4,800 per year. Walk-ins are welcome to use the facilities at a rate of $25 dollars per day or $225 dollars per week. Aspen’s other paid membership club, Gravity Haus Aspen, offers members exclusive use of fitness areas, coworking spaces, building amenities, outdoor equipment, and discounts on use of their overnight facilities and sponsored trips. Membership for individuals ranges from $110 per month to $200 per month. 17 Here House Aspen Membership — 614 E COOPER 18 Membership | Gravity Haus 35 Page 27 of 30 TABLE 14: FLEXIBLE MEETING SPACES IN ASPEN Flexible Meeting Space within the Armory Building It is recommended that flexible meeting space geared toward individuals and small groups be included in some capacity within the future program of the Armory building. There is a clear lack of available “third space” within the community where individuals and small groups can gather for low to no cost. Large groups and organizations, however, have many options available between both public facilities, hotel event space, and religious institutions. Of the options that are available for individuals or small groups, many have limited gathering space and hours, or require a membership for their use. Meeting space within the armory should be integrated with, and supporting of other building uses and designed in manner that is welcoming to individuals or small groups. These spaces should be available for use free of charge for both short and extended periods of time throughout the day. This space should have a variety of informal seating types available to support different needs. Seating should include both larger communal tables, such as picnic benches or 4- and 6- top tables, and smaller more intimate seating opportunities, such as loungers and couches. More formal private meeting spaces, such as conference rooms or smaller breakout rooms may be appropriate, however, they should be located in more private areas of the building, such as upper floors or in corner spaces. These spaces can be utilized by individuals for relaxing, working, or conversing, or by small groups for gatherings. Ideally, these group spaces should be located on the first floor of the armory so that they can aid the space in feeling activated and welcoming throughout the day. The exact layout and size of the meeting space will be dependent on the location and size of other uses within the armory and will require additional study. Armory Programming Recommendations The Role of Armory in Aspen The reimagining of the Aspen Armory is a once in a generation opportunity to develop a significant amount of space that can be used for the benefit of the community. The last time an opportunity of this magnitude arose was the purchase of the Red Brick by the City of Aspen in 1991. The Red Brick has since become a cornerstone of the community, providing residents with space for the arts and local non-profits space to service the community. The Location Name Type of Space Available for Use by Individuals Available for Use by Groups Fee Associated with Use 411 E Main St The Aspen Office Co-working Yes No Yes 536 W North St Christ Episcopal Church Religious Institutio No Yes Yes 200 E Bleeker St Aspen Communtiy Church Religious Institutio No Yes Yes 435 W Main St Chabad of Aspen Religious Institutio Yes Yes Yes 120 N Mill St Pitkin County Public Library Public Building Yes Yes No 427 Rio Grande Pl Aspen City Hall Public Buildings No Yes No 540 E Main St Aspen Police Station Public Buildings No Yes No 0861 Maroon Creek Rd Aspen Recreation Center Public Building Yes No Yes 110 E Hallam St Aspen Red Brick Public Building Yes Yes Yes 420 E Hopkins Ave Aspen Fire Station Public Buildings No Yes No 315 E Dean St St Regis Hotel Event Space No Yes Yes 232 W Main St Annabelle Inn Hotel Event Space No Yes Yes 610 S W End St The Gant Aspen Hotel Event Space No Yes Yes 550 S Spring St The W Aspen Hotel Event Space No Yes Yes 845 Meadows Rd Aspen Meadows Resort Hotel Event Space No Yes Yes 617 E Cooper Ave Aspen Square Hotel Event Space No Yes Yes 675 E Durant Ave The Littl e Nell Hotel Event Space No Yes Yes 355 S Monarch St The Limelight Hotel Event Space No Yes Yes 330 E Main St Hotel Jerome Hotel Event Space No Yes Yes 75 Prospector Rd The Ritz-Carlton Club Hotel Event Space No Yes Yes 315 E Hyman Ave Gravity Haus Paid Membership Yes Yes Yes 615 E Cooper Here House Paid Membership Yes Yes Yes 36 Page 28 of 30 Armory has an opportunity to make a similar impact on Aspen, with a currently blank slate of programming that can be shaped to meet the needs of the community both today and tomorrow. The following section examines the multiple uses proposed for the Armory Building and provides recommendations for which uses may be most appropriate to include in the redevelopment of the building. Aspen Area Demographics Figures related to wealth and employment in Aspen and surrounding communities are important when considering future uses within the Armory building. Compared to Pitkin County and the State of Colorado, Aspen’s 2023 median household income, per capita income, and wealth index are all higher, indicating that Aspen’s population is relatively wealthier than that of the county and state. However, the median household income distribution illustrates that almost half of Aspen’s households have a median income under $99,999, which is similar to Pitkin County. Additionally, 23% of Aspen’s households have a median income under $49,999. Aspen’s economy is largely based on recreation, tourism, and hospitality, with the largest number of people employed by Arts/Entertainment/Recreation, Accommodations, Food Service, and Retail businesses. For future uses within the Armory building, this can be interpreted to mean that goods, foodservice, or service options should be priced at lower levels that are more in alignment with the spending power of local full-time residents. Of additional importance when considering future uses within the Armory is the significant increase in daytime population due to commuting workers. Aspen’s daytime population increases by 76% during working hours, which indicates that more people commute in than those who leave the city for work. The population increase is more significant for the 5-minute and 15-minute walking areas surrounding the Armory building, which increase by 808% and 184%, respectively. This presents a significant opportunity to capture additional visitation and use by the commuting workforce. Amory Building Use Recommendations This report examined multiple programming options for the Armory Building, including Food Service, a Makers Market providing space for locals to sell goods, Non-profit Office Space, and Flex Space / Co-working Space. The following section summarizes the recommendations associated with each space type and provides guidance on how each programming option may manifest itself within the Armory building. Retail – Makers Market A Makers Market within the Armory is a viable use supported by both the market conditions and public feedback. A Makers Market would act as an incubation space for local artisan-based businesses, boutiques, and start-ups looking to have small storefronts to sell their goods and spaces to meet with clients. A Makers Market would also provide a space for entrepreneurs to try out test new goods and services related to retail concepts and ideas before signing leases for larger spaces. In a Maker’s Market Concept, a portion or all of the first floor of the Armory building would be the primary retail space, offering small customer-facing storefronts available for lease. These spaces could be complemented by small food and beverage concepts such as a coffee shop and sandwich shop, or other food and beverage venders. The basement could be a supporting space as a working studio for local artists who sell products on the first floor. The exact size and number of spaces within the Armory building will require further study and analysis. Food Service It is recommended that foodservice be included in the future program of the Armory building. There is clear demand from residents for less expensive dining options and within the Aspen Market there exists a lack of available $ and $$ restaurants, particularly during dinner hours. Of the $ and $$ options that are available, a limited number are full- service restaurants. Given the significant size of the Armory, foodservice could take multiple forms within its walls, enabling users to have different types of dining experiences and options throughout the day. At minimum, space within the Armory should be reserved for a full-service casual dining concept that is priced at or around the $$ price point. This concept could be complimented by one or two additional quick service concepts found elsewhere in the building. While a Food Hall concept may work within the Armory, a lack of foot traffic during portions of the day and week may present 37 Page 29 of 30 challenges to generating sufficient business to support multiple concepts within the Food Hall. Additional study is recommended to assess the exact sizing and location of foodservice options within the Armory building, as well as the operational model that would work best for the final building program. Non-profit Office Space Aspen has an abundance of non-profits that play important roles for both community members and visitors. While they are a critical part of the Aspen community, office space for non-profits is not the highest and best use for the Armory building. Because non-profits often have specific and focused missions, their appeal to the broader Aspen community, and ability to drive foot traffic and use within the Armory building throughout the day and week is limited. Having non-profit offices within the building would likely create portions of the building that have limited to no activity during evening hours and weekends, which is in conflict with times that are likely to see spikes in use by the Aspen community. If non-profits were to be housed within the Armoy building, it is recommended that their space be limited to the basement of the building to not only allow for more privacy for offices or the administration of services, but also to not clash with other, more energetic uses on other floors of the building. Flexible Meeting Space In Aspen there is a clear lack of available space within the community where individuals and small groups can gather for low to no cost. While large groups and organizations have many options available between both public facilities, hotel event space, and religious institutions, of the options that are available for individuals or small groups, many have limited gathering space and hours, or require a membership for their use. To create more opportunities for small and intimate gather space within the community, it is recommended that Flexible Meeting Space geared toward individuals and small groups be included in some capacity within the future program of the Armory building. Meeting space within the Armory should be integrated with, and supportive of other building uses and designed in manner that is welcoming to individuals or small groups. These spaces should be available for use free of charge for both short and extended periods of time throughout the day. These group spaces should be located on the first floor of the Armory so that they can aid the space in feeling activated and welcoming throughout the day. The exact layout and size of the meeting space will be dependent on the location and size of other uses within the armory and will require additional study. Summary of Potential Space Uses and Attributes Scoring Methodology To assess the highest and best use of the Armory building amongst the uses studied, Design Workshop developed a scoring methodology that looked at multiple variables. Variables received a score of either 0, 1, or 2, with 0 being Low, 1 being Medium, and 2 being High. Scoring was based on Design Workshop’s experience with developing and planning for these programming elements. The following variables were examined and scored: • Revenue Generation: The ability of the use to generate revenues that could support the costs associated with the redevelopment of the building and its daily operations. • Anticipated Foot Traffic: The ability of uses to attract users to the Armory building throughout the day. • Market Support: The ability of uses to fill gaps within the market as identified in the study, as well as serve both residents and tourists. • Anticipated Dwell Time: The ability of uses to influence guests to stay for extended periods of time. • Development Risk: The level of risk that the use type will struggle and could result in vacant space within the Armory building. Please note that risks were applied to the scoring methodology using negative numbers to detract from the overall score. • Development Intensity: The amount of physical alterations within the building required to support the use. The results of the scoring exercise are illustrated in Table 15. Flexible Gathering Space received the highest score at 11 points. Both Quick Service Food Service and Full-Service Restaurant received the second highest score, at 10 38 Page 30 of 30 points each. A Maker’s Market Retail space received the third highest score with 9 points. A Food Hall received the fourth highest score, with 8 points, while non-profit office space received the lowest score with 3 points. TABLE 15: POTENTIAL USE MATRIX FOR ARMORY REDEVELOPMENT, SOURCE: DESIGN WORKSHOP Because of the significant size of the Armory and multi-floor layout, the uses listed above are not mutually exclusive and can and should be blended in such a way that encourages use throughout the day and maximizes the appeal of the Armory to residents and visitors from all backgrounds. It is recommended that the city move forward with Foodservice, including a Full-Service restaurant concept as well as Quick Service options, a Retail Makers Market, and Flex Space and/or Coworking Space, as the primary uses of the Armory building. If non-profit uses within the Armory are deemed appropriate by staff and council, they should be located either in the basement or portions of the building expected to see less foot traffic. Finally, recommended uses should complement and support one another, particularly if they will be located on the same floor. Careful consideration must be given to the design and layout of the space to ensure that that uses are sized correctly and that adjacent uses complement one another. Next Steps It is recommended that the City of Aspen continue to study future uses of the Armory Building. Specifically, the city should solicit responses from a licensed Architect for a Spatial Programming Analysis and Schematic Design process that identifies the location and size of building uses and provides sufficient detail to perform initial construction estimates for the building’s desired program. Once the Schematic Design process is complete and construction costs have been deemed acceptable by Council, it is recommended that the city engage in a competitive solicitation process to identify a future operator of the building. This process should focus on the operator’s expertise and ability to execute the vision of the Armory building established by City Council. As part of this process potential operators should be asked to detail their operational model and provide a pro-forma that estimates potential revenue and returns that could be expected. Once an operator is chosen it is recommended that they have the opportunity to influence the design and layout of the building to ensure that it is in alignment with their operational model and includes their professional expertise without compromising the vision for the building. Morning Afternoon Evening Fills Existing Gap in Market Resident Serving Tourist Serving Flexible Gathering Space 0 1 2 2 2 2 0 2 0 0 11 Full Service Restaurant 2 0 1 2 2 2 2 2 -1 -2 10 Quick Service Food Service 1 1 2 1 2 2 2 1 -1 -1 10 Retail - Makers Market 1 1 2 0 2 2 2 1 -1 -1 9 Food Hall 2 0 2 1 2 2 2 1 -2 -2 8 Nonprofit Office Space 1 1 1 0 1 1 0 0 -1 -1 3 Low 0 Medium 1 High 2 Total Score Scoring Scale Building Use Revenue Generation Potential Anticipated Foot Traffic Market Support Anticipated Dwell Time Development Risk Development Intensity 39 1 City of Aspen | Armory Hall Engagement Report | October 2023 ASPEN’S ARMORY HALL ENGAGEMENT SUMMARY REPORT October 4 - October 31, 2023 40 2 City of Aspen | Armory Hall Engagement Report | October 2023 CONTENTS ENGAGEMENT SUMMARY OVERVIEW 3 • Engagement Window and Goals • Previous Project Engagement RECENT PROJECT ENGAGEMENT 4 • Open houses • Aspen Community Voice • Questionnaire DISTRIBUTION CHANNELS 5 • Print Presence • Online Presence • Advertising • Email Presence QUESTIONNAIRE 7 • Content/Questions 41 3 City of Aspen | Armory Hall Engagement Report | October 2023 ENGAGEMENT WINDOWS AND GOALS The current phase of engagement occurred between October 4-October 31. The goal of this engagement window was to encourage community members to weigh in on what the potential uses could be in the redevelopment of Armory Hall to inform Council’s decision on programming. Engagement levels included Inform (keep informed) and Consult (listening, acknowledge concerns and ideas and incorporate feedback into the decision-making process.) Community feedback was centered around conceptual designs and floor plans, which were based on previous public outreach and council action that signaled that the primary focus for Armory Hall should revolve around community use, aligning with the key findings of previous public outreach efforts. These findings pinpointed specific areas of interest, including casual dining, a community center, versatile multi-purpose spaces, non-profit services, and accessible retail options. ENGAGEMENT SUMMARY OVERVIEW PREVIOUS PROJECT ENGAGEMENT Since the beginning of 2022, City staff has engaged in multiple community engagement endeavors including three online surveys, two focus groups, three open houses, media coverage and collecting feedback from community partners like ACRA. A questionnaire that was posted on Aspen Community Voice in February and March of 2022 asking about community needs and uses attracted 975 people visiting at least one page and 296 people answering the survey. A follow-up questionnaire in April of 2022 asked participants to confirm the priority access and uses (identified in the initial survey), then help rank which of those top uses would be best served in the Armory space and meet community needs. Those outreach opportunities also sought to gain more insight for future operations, facility maintenance, and funding as it relates to impact on the remodel’s extent. The online survey on Aspen Community Voice conducted between April 6 and April 24, 2022, attracted 397 people visiting the page and 122 participants answering the questionnaire. When looking at the entire engagement process between February through April of 2022, the project had a total of: Over the past year, City staff has conducted seven meetings with Aspen City Council, culminating in a recent work session in June 2023. The Council reached consensus that the primary focus of Armory Hall should revolve around community use, aligning with the key findings of community outreach efforts. 2.1K total page visits 502 engaged visitors 901 Informed visitors 1.3K aware visitors 125 new registrations 418 participated in at least one of the questionnaires 251 visited or contributed to at least one of 31 submitted ideas Aspen Historical Society, Mary Eshbaugh Hayes Collection 42 4 City of Aspen | Armory Hall Engagement Report | October 2023 RECENT PROJECT ENGAGEMENT OPEN HOUSES Armory Reimagined open house on Oct. 4: The open house attracted between 150-200 people attending the event in Armory Hall. Tours of the building were conducted, and participants provided ideas and feedback on the programming concepts. Based on ranking of the identified potential mix of uses, a food hall concept received 41% of the votes while restaurant/bar received 9%, equaling 50% of the open house participants preferring provision of food within the Armory. A visitor center received 14% of the votes, and a community lounge received 11%. Flexible multi-purpose spaces (9%), retail spaces (7%), ACRA offices (6%), and co-working space at 3% rounded out the votes. Armory Reimagined open house on Oct. 18: This open house attracted roughly 20 people at Armory Hall who took a tour of the building and offered their opinions verbally and on the Aspen Community Voice survey. ASPEN COMMUNITY VOICE PAGE Over the course of the survey being conducted on the site between October 7-October 31, there was a total of: ASPEN COMMUNITY VOICE QUESTIONNAIRE Demographics A total of 168 individuals responded to the Reimagining the Armory: Shaping the future questionnaire. The largest demographic group of respondents in a question about self-identification answered that they identified as Aspen residents (145, or 86.8%). General Observations • When asked about a vision statement that was developed based on seven guiding principles approved by Aspen City Council and feedback collected from the first two rounds of community feedback in 2022, a majority of participants (82.7%) agreed that it aligns with Aspen’s community values. • When asked what their preference was among uses for Armory Hall, the majority of respondents (142 individuals) chose food hall with multiple vendors, a coffee shop and/or a bar. Over 50 individuals chose a community lounge with a variety of seating options to eat and hang out. Another 51 individuals chose rentable, flexible multipurpose spaces to facilitate meetings, networking events, receptions, community groups, fitness and educational classes or workshops. Three options were presented by the City’s consultants based on community input from previous engagement windows, data from a market study and priority directives from Council. Here are the results: 858 total visitors 689 aware participants 397 informed visitors 168 engaged participants 63 new registrations 40.5% agreed they wanted a two-level food hall 32.7% prioritized a food hall and restaurant 10.7% wanted none of the options presented 16.1% indicated that they wanted a food hall and visitor center 43 5 City of Aspen | Armory Hall Engagement Report | October 2023 The questionnaire also inquired about adjacent space use and what type of use would make the Armory a good neighbor in the future. When asked how to engage Armory Hall with Conner Park: The questionnaire asked participants what elements they would like to see to activate the alley behind the Armory building: 117 individuals chose multiple seating options 107 individuals indicated they want updated landscaping 94 individuals chose additional tables 72 individuals want additional lighting 58 individuals indicated they want yard games 102 individuals voted for food trucks 94 respondents indicated seasonal outdoor seating 83 individuals want markets and street fairs 54 respondents indicated art installations 46 individuals favor concerts 41 individuals want movie nights DISTRIBUTION CHANNELS PRESS RELEASES • September 29, 2023: Explore the Future of Armory Hall: City of Aspen to host Open House on October 4th • October 10, 2023: City of Aspen seeks public input on Armory redevelopment • October 17, 2023: Public Service Announcement promoting Aspen Community Voice survey MEDIA COVERAGE • Aspen Public Radio, Sept. 26: https://www.aspenpublicradio.org/2023-09-26/tuesday-september-26 • Aspen Daily News, Sept. 30: https://www.aspendailynews.com/news/public-can-see-the-future-of-historic- armory-hall/article_01b79652-5f55-11ee-a2c2-0bac5d0cd312.html • Aspen Times, Oct. 2: Explore the future of Armory Hall: Aspen to host open house on Oct. 4 | https://www. aspentimes.com/news/explore-the-future-of-armory-hall-aspen-to-host-open-house-on-oct-4/ • Aspen Times, Oct. 5: https://www.aspentimes.com/news/armory-open-house-unveils-three-proposals-for-how- to-use-space-to-enthused-crowd/ • Aspen Daily News, Oct. 5: https://www.aspendailynews.com/news/the-new-heart-of-aspen/article_2c050cfc- 6331-11ee-b479-d7eaec74dba3.html • News briefs in both newspapers promoting ACV survey during questionnaire period: Oct. 7-Oct. 31 WEBSITE https://aspen.gov/CivicAlerts.aspx?AID=691 • Homepage newsflash • News Page • Aspen Community Voice Aspen’s Armory Hall project page PRINT PRESENCE ONLINE PRESENCE 44 6 City of Aspen | Armory Hall Engagement Report | October 2023 PRINT ADS • Aspen Times: 1/4 page ads on Sept. 18, 20, 22 (Promoting open house) • Aspen Daily News: 7 1/4 page ads September 19-Oct. 2 & Oct. 13 (Promoting open houses) DIGITAL ADS • Aspen Daily News: Rectangle left one position from Oct. 16-Oct. 30 (Promoting ACV survey) RADIO • KSPN: 28 spots from Sept. 18-Oct. 4 (Promoting open house) • KNFO: 28 spots from Sept. 18-Oct. 4 (Promoting open house) • LIFT: 28 spots from Sept. 18-Oct. 4 (Promoting open house) • PSA spots ran on all three channels ASPEN COMMUNITY VOICE: ASPEN’S ARMORY HALL September 25, 2023 Subject: Save the date! Armory Reimagined open house on Oct. 4 • 402 sent • 358 open rate October 10, 2023 Subject: Weigh in on the Aspen Armory Reimagined project • 412 sent • 363 open rate October 27, 2023 Subject: Last chance to fill out Aspen Armory community survey • 92 sent to those who signed up at Oct. 4 and Oct. 18 open houses OTHER ACRA Membership newsletter September 20, 2023 ComDev Newsletter September 22, 2023 EMAIL PRESENCE ADVERTISING 45 7 City of Aspen | Armory Hall Engagement Report | October 2023 Visitors 354 Contributors 168 CONTRIBUTIONS 168 Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 ENGAGEMENT TOOL: SURVEY TOOL Reimaging the Armor y: Shaping the future VisionThe following vision statement was developed based on the seven guiding principles approved by Aspen City Council and feedback collected during the first two rounds of community feedback. This Vision Statement will be utilized to help shape t... 139 (82.7%) 139 (82.7%) 17 (10.1%) 17 (10.1%) 12 (7.1%) 12 (7.1%) Yes, I think it aligns No, I do not think it aligns I don't know Question options Page 7 of 11 Mandatory Question (168 response(s)) Question type: Radio Button Question ENGAGEMENT TOOL: SURVEY TOOL 354 Visitors 168 Contributors 1. Vision Statement: “A vibrant, welcoming community-supporting space for gathering, innovating, learning, and lingering. Providing dining with welcoming local wares, affordable grub, collaboration, and arts. A partner to thriving downtown businesses, restaurants, and shops. A local place, reflecting the historic character and classic relaxed vibe of Aspen, with sustainable and durable materials and systems to ensure a continued long and flexible life of the Armory building.“ Do you believe that the Vision Statement aligns with the Aspen community’s values? 46 8 City of Aspen | Armory Hall Engagement Report | October 2023 Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Building program inspirationReferencing precedent imagery in the image above, what is your preference among the following users/vendors if located in the Armory building? A small restaurant or cafe with casual tables and a relaxed vibe A food hall with multiple food vendors, a coffee shop and/or bar Retail spaces featuring local goods and artwork A new home for the Aspen Chamber Resort Association (ACRA) staff offices A visitor center with local information, maps, and links to community events A community lounge with a variety of seating options to eat, hang out, linger, etc. Rentable, flexible multi-purpose spaces in a variety of sizes. Can facilitate meetings, networking events, receptions, community groups, fitness and educational classes or workshops Co-working space with rentable offices, desks, and meeting spaces Other (please specify) Question options 20 40 60 80 100 120 140 160 37 142 55 21 45 54 51 20 19 Page 8 of 11 Mandatory Question (168 response(s)) Question type: Checkbox Question What is your preference for what vendors or users should be located in the Armory building? Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Building program inspirationReferencing precedent imagery in the image above, what is your preference among the following users/vendors if located in the Armory building? A small restaurant or cafe with casual tables and a relaxed vibe A food hall with multiple food vendors, a coffee shop and/or bar Retail spaces featuring local goods and artwork A new home for the Aspen Chamber Resort Association (ACRA) staff offices A visitor center with local information, maps, and links to community events A community lounge with a variety of seating options to eat, hang out, linger, etc. Rentable, flexible multi-purpose spaces in a variety of sizes. Can facilitate meetings, networking events, receptions, community groups, fitness and educational classes or workshops Co-working space with rentable offices, desks, and meeting spaces Other (please specify) Question options 20 40 60 80 100 120 140 160 37 142 55 21 45 54 51 20 19 Page 8 of 11 Mandatory Question (168 response(s)) Question type: Checkbox Question Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Building program inspirationReferencing precedent imagery in the image above, what is your preference among the following users/vendors if located in the Armory building? A small restaurant or cafe with casual tables and a relaxed vibe A food hall with multiple food vendors, a coffee shop and/or bar Retail spaces featuring local goods and artwork A new home for the Aspen Chamber Resort Association (ACRA) staff offices A visitor center with local information, maps, and links to community events A community lounge with a variety of seating options to eat, hang out, linger, etc. Rentable, flexible multi-purpose spaces in a variety of sizes. Can facilitate meetings, networking events, receptions, community groups, fitness and educational classes or workshops Co-working space with rentable offices, desks, and meeting spaces Other (please specify) Question options 20 40 60 80 100 120 140 160 37 142 55 21 45 54 51 20 19 Page 8 of 11 Mandatory Question (168 response(s)) Question type: Checkbox Question 47 9 City of Aspen | Armory Hall Engagement Report | October 2023 Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Space planning optionsThe three options presented above were developed by our consultants based on community input from previous engagement windows, data from the market study, and priority directives from Aspen City Council. Click here to enlarge ... 55 (32.7%) 55 (32.7%) 27 (16.1%) 27 (16.1%) 68 (40.5%) 68 (40.5%) 18 (10.7%) 18 (10.7%) Food hall and restaurant Food hall and visitor center Two level food hall None of the above Question options Page 9 of 11 Mandatory Question (168 response(s)) Question type: Radio Button Question Three options were developed by the City’s consultants based on community input from previous community engagement, data from market study and priority directives from Aspen City Council. Which option are you most likely to visit? 48 10 City of Aspen | Armory Hall Engagement Report | October 2023 Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Select all the elements you would like to see to help the Armory building engage with Conner Park.Conner Park Additional tables Multiple seating options Yard games Improved lighting Updated landscaping Other (please specify) Question options 10 20 30 40 50 60 70 80 90 100 110 120 130 94 117 58 72 107 19 Page 10 of 11 Mandatory Question (168 response(s)) Question type: Checkbox Question Select all the elements you would like to see to help the Armory building engage with Conner Park. 49 11 City of Aspen | Armory Hall Engagement Report | October 2023 Aspen Community Voice : Summary Report for 02 October 2023 to 31 October 2023 Connecting to the outdoorsSelect all the elements you would like to see to activate the alley behind the Armory Building.The Alley behind the Aspen Armory building Seasonal outdoor seating Markets/street fairs Movie nights Concerts Art installations Food trucks Other (please specify) Question options 10 20 30 40 50 60 70 80 90 100 110 94 83 41 46 54 102 21 Page 11 of 11 Mandatory Question (168 response(s)) Question type: Checkbox Question Select all the elements you would like to see to activate the alley behind the Armory building. 50 51