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HomeMy WebLinkAboutminutes.council.19810615Special Meeting Aspen City Council June 15, 1981 Mayor Edel called the special meeting to order at 5:00 p.m. with Councilmembers Parry, Michael and Knecht present. MAROLT RANCH - Final PUD subdivision Sunny Vann, planning director, told Council this is the final set of approvals for this project. The density has been lowered and is now 100 units; therefore, there is no necessity to rezone this property to a residential bonus overlay. The approvals that remain are the final PUD subdivision plat and agreement; the exemption from growth manage- ment plan under the 70/30 provision of the Code; and, condominiumization of the free ~o~ ~3 ~uu~u~m June 15, 1981 market portion of the project. Vann told Council that the plat has been reviewed by the engineering depar~tment and most concerns have been taken care of. The Council has reviewe~ the subdivision agreement at a work session. Section 1 of the agreement identifies the parcels being created by this subdivision. A number of parcels are being dedicated to the city as open space or rights-of-way; two parcels are being used for the development. Section 2 deals with the cost of the improvements and also has the construction schedule. Vann told Council the employee units are scheduled for December 31, 1982. The free market units are supposed to be done in July 1983. A mechanism has been provided whereby certificates of occupancy can be taken out on the free market units at a ratio of 70 to 30; for every 3 employee units that are qualified, a certificate of occupancy may be issue~ for the free market unit. There is a provision for a landscaping plan and for covering the cost of landscaping. Section 3 provides for the dedication of a number of rights-of-way and easements, primaril~ the Main street right-of-way which will be held for use as a transportation artery and improvements. ~lso the right-of-way for Cemetery Lane extension; easements for gaslines, ditch locations, etc. This section also provides that the city will providethe necessar' access across the Thomas property to provide for relocation of Cemetery Lane intersection, and also to provide access to lot 2, which is the employee portion of the project. Section 4 deals with park dedication fees. The city has agreed to exempt~khe~employee portion of the project from park dedication fees on the assumption, as provided in the agreement, that the project will be moderate income employee housing at the time of occupancy. Mayor Edel asked if this was moderate by today's guidelines. Vann told Counci~ the way this is set up it will be $.70 a square foot for rental and $76 a square foot for sale at the time of occupancy, December 31, 1982. If for some reason, excessive snow - act of God, they developer will have the higher of those two figures~or the moderate income guidelines in effect at that date. Vann said the staff does not know what the moderate income guidelines will be in 1983. Mayor Edel said, under these circumstances, wouldn't~it be more propitious for the developer to miss the deadline. Vann said the developer will have to demonstrate a reasonable cause for missing the deadline and there are some specific reasons spelled out. Vann told Council the developer represented at conceptual stage the units would be occupie( in 1982 and the rental rate would be $.70 per square foot. The planning office felt this figure would be moderate based on the rate the guidelines have been increasing. P & Z approved the rental rate at $.70 but added the proviso that it could be higher of the two if in fact the deadline cannot be met. There may be a very worthwhile reason why the developer cannot meet the deadline. In any case, it will be the moderate income guideline in effect at the time a certificate of occupancy is granted. Jim Mulligan, representing the developer, told Council they want to finish the free market units as quickly as possible from a cost control standpoint. The cannot be finished until the employee units are finished. Vann said the rental rate may be higher than $.70 but it will be no higher than moderate income in effect at that time. Mayor Edel asked if the free market units were going to be pre-sold. Mulligan said they would try; however, the free market units cannot be completed in advance of the employee units. City Manager Chapman pointed out the developer should care about completion becaus the completion is going to effect the cost and thus the profit margin. It would be to the advantage of the city for the developer to pre-sell because then there is more of an incentive for the free market units to be completed~ which is an incentive to complete the employee units. Vann pointed out a permanent c/o cannot be issued on any of the free market units units a 70/30 ratio of the employee units is completed. Vann told Council if, for some reason, the employee housing is not moderate income at the date of occupancy, the Council could go back and charge for the park dedication fee for the employee housing portion of the project. The park dedication fee is being waived at this time because the developer is guaranteeing that the units be moderate. Vann reminded Council they had instructed the staff to calculate the park dedication fees for the free market portion and recommend a figure to Council. The staff took~the total value of the Marolt property, 35.25 acres; Mulligan has agreed to document the value of the property. The V~lue discussed was four million dollars. The staff then came up with an average cost per acre. The staff then took the 6.9/odd acres attributable to the free market portion of the project and calculated the total value of that parcel based on the total value of the overall parcel. This works out to $786,000. Vann pointed out to Council that a park dedication fee has never been applied to a project of this size, nor a project with a 70/30 exemption. Using the formula in the Code, the total park dedication fee is $589,000 for the 30 free market units on 6.9 acres. Vann told Council the applicant has indicated that a park dedication fee of that amount will make the project unfeasible. The Code provides a method where the Council may accept land in lieu of a park dedication fee. The applicant is already dedicating free and clear as passive open space the reamining or approximately 24 acres of the total project, simply giving it over to the city. About 82 per cent of the 6.9 acres of the free market portion is being used as passive or active open space. Mulligan told Council this 82 per cent of the 6.9 acres is being used for active and passive recreation surrounding the units. Since the park dedication fee is to acquire active and passive open space, the developer will take that percentage of the project that is used for active and passive ~ecreation and dedicate in the documents it will be used for those purposes only; this will provide those as lands in lieu and apply the park dedication fee to those areas that are used for dwelling units only. Vann told Council the park dedication fee would be in the area of $65,000 to $70,000 if that formula were to be used. Mayor Edel does not agree with this thinking, for example, any citizen will not be able to walk out in that space or go use the tennis courts. Councilwoman Michael stated she had a hard time justifying backyards and frontyards as open space. Mulligan pointed out the developer is already dedicating 24 acres of land, plus this other space is for the common use of the project not just for one individual's use. Mayor Edel rebutted it was not for the entire city population. Mulligan said the way the Code is written, it is not required that the active and passive recreational area be for public use. Councilwoman Michael noted the park dedication fee started at $589,000 and is now down to $70,000. City Manager Chapman said there are so many different ways to interpret this and calculate it, the park dedication fee can go from $16,000 to $3,000,000. Council had told staff to work through calculations and come up with a method that will work for this project and also for other projects. Chapman said what the applicant is requesting, in the opinion of staff, the Code permits. Mayor Edel said this is based on an arbitrary figure of 88 per cent of the 6.9 acres. Mulligan said he did not feel this was arbitrary. Mayor Edel asked if the Code addresses accepting land for the general city. Chapman answered the Code just says land dedication. Mayor Edel asked if he wanted to have a picnic on this land, could he do that. Mulligan answered no. Mayor Edel explained to him land dedication means dedication to the city, not to a private enclave. Chapman pointed out it could also mean that there was intended to be open space just for visual purposes, aesthetic purposes, not necessarily use purposes. Vann said another way to look at this is that the intent was to use the money, the cash fee, to purchase necessary active and passive park lands that the additional people associated with the project would impact. The applicant, in this case, is arguing that he is providing for that on-site, through the provision of land for his people. The new tenants will not necess- arily impact the parks as much as they would have had h~not provided this opon space; therefore, this is a reasonable exchange in lieu for a portion of his park dedication fee. Mayor Edel said he followed the theory and agrees to some extent; however, it is out of proportion in terms of dollar return and dollar purchase amount. Mulligan said the developer and the staff are trying to come up with a realistic exercise; many things in this project are unique, such as 62 per cent of the land includes open space already, and the free market portion is being utilized to suffice for active and passive recreation purposes. Mayor Edel said he felt it should be a lot more than 12 per cent of the free market portion that the formula for park dedication fee is based on. Mulligan pointed out the formula for park dedication fee is a relationship to the size of the dwelling units, the number of bedrooms and residents - not necessarily the value of the units. Mulligan said if one takes that concept and applies it to the strictures of what the code seems to be saying, and a developer provides sufficient active and passive recreation use for all the additional residents under the formul, the purpose of the code has been met. Mulligan stated to Council that they are giving a lot of open space and providing intense active and passive recreation area, the only property that should be penalized for purposes of the park dedication fee is that land that is not used. City Attorney Taddune pointed out the code references land dedication, it does not indicate that it has to be dedicated specifically to the city. The code states, "the subdivision shall dedicate that amount of land the current value equals the amount of cash payment computed above". The code does not refer directly a dedication to the city for public park purposes. Taddune said when the staff calculated the park dedication fees they came to about 85 per cent of the estimated value of the land or $670,000~ Also in a PUD, which is a bit different from a subdivision application, the city requires a certain amount of open space. Councilwoman Michael stated though~the theory is good, she has trouble justifying that the open space fund get only $70,000 out of this whole project. Mulligan said this project is already giving $2,000,000 on that value formula worth of open space to the city. Councilwoman Michael said the Marolt project represents growth, and one of the reasons for tho park dedication fee and for the desire on the part of the city to acquire land as growth occurs is open space for the people whom this project will generate and the kinds of public uses of public land that they need. Councilman Parry said the developer is putting money into creating the facilities and paying a park dedication fee on top of that. Mayor Edel said the developer is putting the money in to make it as enticing as possible, to make the amenities nice and to boost up the cost of the individual units. The developer then comes to the city and say we are doing this to make the units sell at a higher price, but they also want a lower park dedication fee. Mayor Edel said he felt the $67,000 is out of line based on the fact that most of the 80 per cent of the land is for the accommodation and convenience and saleabitity of the units. Mayor Edol said he is looking for a compromise between the three million or $580,000 and the $67,000. Councilman Parry agreed to look for a com- promise, but how is one arrived at. Mulligan suggested they could handle $96,000 w~thout hurting the project. Councilman Knecht said he agreed the 24 acres of dedicated land is a lot of land; on.the other hand $2,000 per unit isn't very much. Mayor Edel suggested the applicant and staff caucus and come up with an acceptable formula. Vann told Council the 88 per cent used was based only on the parking sheds and the buildings. If the parking lot and roads were taken out, the percentage would change. Vann went on with the agreement, Section 5 deals with the open space and maintenance agree- ments. When Council decided not to take the 24 acres in lieu of the park dedication fee,1 the applicant agreed to dedicate it to open space with some specific conditions. Essentially, this land can be used for passive open space. Vann said if the city were to accept is in lieu of a fee, the city would want it unencumbered. The agreement is that the city will not put ball fields and horticultural centers on this open space. Taddune explained to Council that in the event this is not maintained as passive open space, the applicant wants the right to have this land back. Section 7 sets forth the procedure by which the applicant can be reconveyed the land if not maintained as passive open space. Taddune said the agreement is written in such a way that if the applicant takes the land back, it is still limited to the purpose the city is intending to use it for. Mayor Edel said was responsibility costs pursuant to terms of this agreement mean. Vann said whatever it takes to maintain the land as is is the city's responsibility. Vann told Council that Lot 1 is the employee portion and contains 70 units. This will be condominiumized; however, the conversion to sale is subject to Council approval. While the project is a rental project, it will have a management entity. Vann told Council the agreement provides this management contract is subject to Council approval, which is not an important issue to staff. Council agreed to delete that provision. Vann pointed out lot 2 is for the 30 free market units. These will be condominiumized for separate sale; this is one of the approvals. The agreement deals with the responsibility of maintenance for facilities, facilities in common for both of the projects will be shared on a 70/30 basis. In section 6, it says that the applicant will convey such water rights for maintenance of open space to the city. Taddune told Council this will be between .25 and .5 cfs, which is acceptable to the water department. Mulligan told Council these will be low priority water rights. Mayor Edel asked what percentage of the water rights this is. Mulligan said about one-fourth. Mayor Edel asked if there discussions about getting more of the water rights. Taddune said this is still in discussion. Vann told Council that section 7 deals with sewer, refers to the plant investment fees, etc. Section 8 deals wi~ the issuance of industrial revenue bonds or the concept that the city would accept title to the employee portion of the project for issuance of IRBs. It also says that as long as the property is rental, the city will accept ownership with lease back provisions for the purposes of deferral of real estate taxes. The Council must review if this comes up as a sale project and there are conditions. Section 9 is price guidelines; it will be $.70 per square foot for occupancy at December 1982. If they do not meet that deadline, and there is some justification, they will either meet $.70 per square foot or the moderate guidelines in place at that time. Mulligan told Council they would have to submit a request for extension if they cannot meet the deadline. There is a paragraph which provides for an annual adjustment after the date of occupancy, either at 8 per cent or the annual adjustment in effect at that time, the greater of the two. Section 10 deals with assurances required by the subdivision regulations. There will be escrowed $1,050,000 for water, sewer, roads, etc. Section 11 deals with additional parking. P & Z recommended Council approve a reduction in the required parking for the free market portion of the project from one parking space per bedroom to two parking spaces per units. The applicant has indicated on the plat provision for additional park- ing to meet the Code should the city determint that the two space per unit is inadequate. Section 12 deals with the six month minimum leases with no more than two shorter tenancie~ per year. Vann said that P & Z and Council were concerned about this being a tourist- oriented project; it was intended as a permanent-type project. The original conditions o~ the annexation did not address short-term tourist uses in this location. The R-15 zone is inappropriate location for tourist use. The City's master plan has tourist uses located close to the mountain. Mulligan reminded Council he had presented an exemption requested from the six month minimum restrictions, which was denied by Council. This request was based on the fact that the condominiumi ordinances applies to conversions, in the original intent, and not to new projects that are supplying additional employee hous- ing with no displacement. Mulligan said they also addressed this on the basis that the underlying zone category did not, in fact, require short term rental restrictions. Mulligan said they have accepted this condition although under protest. Section 13 is the deed restrictions for the employee portion. There will be a deed restriction for 50 years setting up prices, etc. consistent with guidelines established by Code. Section 14 is non-compliance and a provision for extensions and sets up the mechanisms whereby extensions from the time frame can be applied for the by applicant. Taddune pointed out there are six assumptions that are made which give a little flexibili' to the applicant in terms of asking for extensions. There is also a procedure if the city feels they are not complying notice can be given and approval withdrawn. Vann told Council the last sections deals with miscellaneous and other agreements to be entered into. The housing mix is outlined, which is 34 two-bedrooms, 19 one-bedrooms and 17 studios. Vann told Council the applicant is requesting sufficient flexibility, if the housing office recommends and Council approves, the mix may be changed within the overall total of 70 units to reflect what the demand is at the time. Mulligan said rather than try to get this into the agreement to do a separate resolution regarding what the housing office will come out with as a result of the study as to housing demand. Taddune suggest~ work out a modification to this agreement and have the applicant come in and ask for an amendment to PUD. Vann told Council the size of the units are within the guidelines established by growth management. Vann told Council there are guidelines associated with the 70/30 ordinance, and that is that the project maintain an average of 1-1/2 to 2 bedrooms per unit for the employee portion of the project; and at least 50 per cent of the total floor area is devoted to deed restricted units. The Marolt project does maintain a bedroom average of 1.5, subject to change as discussed above. Approximately 41 per cent of the total project floor area is currently devoted to employee housing. This was reviewed with the housing office; it was felt the free market units are excessive in size and that the mix is acceptable. There was no objection to this. Vann said the third approval being requested is condominiumization for the free market portion of the project. The request and application are consistent with the guidelines; the planning office has no problem with the request for cond0miniumization. Appropriate documents will have to be submitted. The planning office recommends that the applicant's request for growth management exemption and condominiumization be approved subject to compliance with the six month minimum lease provisions and subject to the deed restriction of the employee portion of the project at a rental rate of $.70 per square foot or sales price of $76 per square foot as provided for in the agreement. Council recessed for applicant and staff to discuss the park dedication fees. ~pec~a± meeting Aspen ult¥ ~ouncl± ~= ~, Mulligan told Council he and s~aff have gone back through the park dedication fee formula and tried to relate it to a number. When they went through the calculations, taking everything but the units and come up with a percentage to figure the park dedication fee on. They percentage came up from 11 per cent to 22 per cent, which comes to a figure of $129,580. Mulligan said this straps the budget for the project. Mulligan said the city does allow a note for park dedication fees to be executed at building permit and paid out of the c/O's of each unit. Mulligan requested to take a note out but not to accrue any interest. Mayor Edel said Council had arrived at a figure of 25 per cent for the park dedication fee, rather than 22 per cent; this comes to a park dedication fee of $147,000. City Manager Chapman told Council he would have to check of the consistency of charging 12 per cent interest. Chapman said he did not think the city has been doing this in an even manner. Chapman said if the Council wanted to do this, the applicant would pay the park dedication fee when the certificate of occupancy is issued and not pay any interest. The Code lets the director of finance use his discretion in this circumstance. Council decided as a compromise to use 22 per cent for the formula and charge 12 per cent interest Jeffrey Sachs said he felt this project was inappropriate for Aspen. It was upzoned when the land was annexed at a time when there was more urgency to the employee housing problem than there is now. This urgency has been abated; 100 units is not needed on this land. There would have been 17 units on this land had it been zoned appropriately. Sachs stated the growth management plan is being undermined; it was never intended for a project hike this. In a single year, this is basically two and a half times the growth rate which was originally established at the 3-1/2 annual rate. Sachs said with regards to the park ' dedication fee there is a set formula and it has always been applied fairly with respect to the value of the property and type of development; this is specified in the Code. If the same formula was applied to 30 single family dwellings, the park dedication fee wou2 be in the neighborhood of $600,000. The Council is establishing a precedent and cheating the City of Aspen out of 78 per cent of what the true correct totally practicable park dedication fee has been in the past. This developer is asking the city for a five times density increase and then asking to waive 78 per cent of the park dedication fee. The concept of dedicating private land as open area and calling that land in lieu of park dedication fee is incredible. Citizens cannot go out there and use that land; it is not a public park. Francis Whitaker said this project will add several hundred people to the population of the city all at one time. This means more cars, more air pollution, etc. The City has taken property that belongs to people who~are not residents of the city, annexed it and upzoned it five times. All that is heard this evening is exemptions; exemption from growtt management, exemptions from park dedication, exemptions from fl~or space ratio, reduction in the parking requirements. As far as cluster development, the purpose was to allow clust~rlde~elopment so there aren't so many r~ads, to reduce constructions costs, and to leave some of the land for all of the people to enjoy. In no way was that intended for community public use. That would be a sad mistake to consider that area in any way as a reason for reducing the park dedication fee. Ellie Bealmer, Ed Czacky~ Je~y Fels and Bob Francis opposed the project. Mulligan reiterated the applicant had accepted the six month minimum lease restriction under protest; they had to agree to it to get the approvals. Taddune told Council the applicant is agreeing to the six month minimum lease but they have their fingers crossed. Mulligan said by signing this agreement, they will adhere to the six month minimum lease; the applicant does not agree with the clause but does agree to it. Mulligan pointed out this process was started in recognition of employee housing needs. This will contain 2.8 units per acre; this is less overall density than much of the surrounding land. The property has been private property and never was dedicated to the city for park. Councilman Parry moved to approve the revised Marolt Ranc5 final PUD subdivision applica- tion as submitted subject to the following conditions; (1) the engineering department's conditions outlined in the attached memorandum dated June 8, 1981, and (2) the execution of final PUD/subdivision agreement prior to issuance of a building permit; seconded by Councilwoman Michael. Councilman Knecht said he likes this project because the city has gained 24 acres of open space. He also like the 30 units clustered rather than 17 single family dwellings all over. Councilman Knecht said he would like to swap with Jay Kuhen over at Silverking for the employee units. The area at Marolt where the employee units are is some of the most beautiful property in the entire project. Councilman Knecht said he felt it would be bett~ for employee housing not to be next to $600,000 houses. Councilman Knecht said not all employee housing should be the lowest rate; there are a lot of middle income employees in town and the employee housing should be a mix. Councilman Knecht said he would like the staff to ~ook into switching this housing approval to the east Side of town. Vann said there would be a process to amend this; the 70/30 ordinance would not preclude moving to a separate site so long as the conditions were maintained. Mulligan said he has discussed the idea of moving the employee housing with the applicant; they feel the idea has a lot of merit. One of the problems, however, is what would that do to the construction schedule Mulligan said the idea is very sketchy at this point. All in favor, with the exception of Councilman Knecht. Motion carried. Councilman Parry moved to approve the applicant's request for growth management exemption and condominiumization subject to the compliance with six month minimum lease provisions as currently set forth~ in section 20-22 of the Municipal Code; and subject to the deed restriction to the employee portion of the project to a rental rate of $.70 per square foot and a sales price,of $76 per square foot as provided for in the final PUD/subdivision agreement; seconded by Councilwoman Michael. All in favor, motion carried. Jim Mulligan expressed appreciation during a lengthy process; the applicant has expended much energy and sums; the city staff spent a lot of time and effort with the applicant. Special Meeting Aspen City Council June 15, 1981 Mayor Edel requested, on behalf of Brooke Peterson, that in Municipal Court in the Councilman Knecht issue that a new judge be appointed. Council requested this be put on the next regular Council agenda. BOND ISSUE FOR WATER MANAGEMENT PLAN City Manager Chapman reminded Council he had wanted to research the short term versus long term funding and give Council a recommendation. Chapman said it would cost $67,000 for 60 days, based on 70 per cent of prime, which is 14.35 per cent over the last two months. Chapman told Council the city would be required to reinvest the unused portion of the borrowed amount with the lender, who will pay the city the federal funds rate. Chapman said he then took an average of the federal funds and figured out the return and based on 19 per cent federal rate and a 20 per cent prime rate, the city would lose about $5,000. The decision of short term versus long term is predicated on what the city thinks the market will do in the next 30 to 45 days. Mayor Edel said he did not agree with the logic of this memorandum. Mayor Edel said the feeling of accountants and investors is that the prime will be down substantially in two months, and he would not like to go with the $2,700,000 bond issue. Chapman told Council what the city is trying to do in the short term market is get just enough money to get through the first 60 days of payments. Chapman explained short term borrowing at $1~200,000 was predicated on Council's request that staff go out for proposals for an underwriter. That would get through the first phase, then the city would go with the bonds. The first phase of the program, which will last more than 60 days, will cost more than $1,200,000. Councilwoman Michael moved the City issue $2,700,000 in long term bonds; seconded by Councilman Parry. All in favor, with the exception of Councilman Knecht and Mayor Edel. Motion NOT carried Councilman Knect said he felt short-term money is the best way to go on this; everything is so up in the air. Councilman Knecht said whenever one can do short-term and then renegotiate, it is a better situation. Councilwoman Michael said perhaps Councilman Collins should be in on this vote. City Manager Chapman said the staff would inform Council to both sides of the issue. Mayor Edel said he had no problem with having the whole Council vote on this. Councilman Knecht said he would sit with the staff to go over this because the issue is new to him. Councilwoman Michael moved to continue the meeting to Tuesday, June 16, 1981, at noon; seconded by Councilman Parry. All in favor, motion carried. Continued Meeting Aspen City Council June 16, 1981 Mayor Edel called the meeting to order at 12:10 p.m. with Councilmembers Collins, Knecht Michael and Parry present. Councilman Knecht moved to reconsider the previous vote; seconded by Councilman Parry. All in favor, motion carried. Councilman Parry moved to approve the issuance of a maximum of $2,700,000 in bonds for the water project; seconded by Councilman Knecht. All in favor, with the exception of Mayor Edel. Motion carried. Councilwoman Michael moved to adjourn at 12:15 p.m.; seconded by Councilman Parry. All in favor, motion carried. · City Clerk