2023: Getting down to business | News

Property values skyrocket throughout Colorado

Headlines were everywhere throughout Colorado about property values rising at an astronomical pace. For taxing districts, soaring property values would mean a boon to their coffers. For property owners, they would mean a hit to their wallets.

After Pitkin County resolved more than 4,700 appeals filed by property owners, a record number, taxing districts got going on whether to seek the full return on the mils they levy. The districts have the authority to accept the full property tax rates they charge or lower them. The districts will be mailing out their bills in early 2024.

The actual values of properties in Pitkin County mushroomed by nearly 72% in 2023, while their assessed values saw a 57% increase.

The Aspen Daily News reported in November, “The actual value, also known as market value, soared to $71.03 billion this year from $41.35 billion last year, according to Pitkin County Assessor Deb Bamesberger. That was an increase of $29.68 billion. The actual value was based on sales of comparable properties between Jan. 1, 2021, and June 30, 2022.”

In the meantime, Aspen’s retail economy was flat throughout the year and real estate sales were down, as the city saw real estate transfer tax collections of $22.3 million year-to-date through November, 10% off the $24.9 million mark set through the first 11 months of 2022.

What’s next: Taxing districts are still finalizing their plans before tax bills go out in early 2024.

Wheels spin on Hunt/RH projects

Developer Mark Hunt paid a handsome price for all of the buildings he bought in Aspen over the years, and in 2023 he was paying the price in the court of public opinion.

Having control of more than 20 properties in and around downtown, Hunt was lambasted by opinion and letter writers in the local newspapers, chiefly over his stalled projects and his venture with RH to create a so-called “Aspen Ecosystem.”

It wasn’t so long ago when California-based RH, formerly known as Restoration Hardware, announced the Aspen Ecosystem it was developing with Hunt. A gallery, restaurant, hotel, residential and worker housing projects were all part of the grand plan the publicly-traded RH announced in a press release and public filings nearly three years ago to this day.

Press releases, alas, don’t always go according to plan, like this part of the Jan. 5, 2021, announcement: “RH currently plans to open the RH Gallery on Galena, and the RH Guesthouse at the Historic Crystal Palace, which will include the Company’s first RH Bath House & Spa, in 2022.”

That’s not to say that the RH/Hunt projects have been shelved. They haven’t. But they remain unbuilt, falling well behind the schedule RH announced to its shareholders in early 2021. The Hunt team has said change orders, city red tape, supply-chain issues and other factors have slowed progress.

The old Boomerang Lodge spot on East Hopkins Avenue has been eyed for residential homes or duplexes as part of the “Aspen Ecosystem;” but in August, the city cited Hunt and his M Development company for “demolition by neglect,” a civil infraction that Hunt has agreed to remedy through a series of deadlines imposed by the city.

In October, the city, citing minimal progress at the former Crystal Palace Dinner Theater where RH and Hunt are building a 20-room boutique hotel and spa, put the developer on notice that the project’s building permit was in peril unless remedies were addressed.

That’s not to say that all of Hunt’s projects have come to a standstill.

Finishing work is being done on the old Main Street Bakery property where a detached building has gone up along with a remodel of the old building and a dining terrace (the project is not part of the RH ecosystem). The Gravity Haus has gradually expanded its operations on the 300 block of East Hyman Avenue, much of which Hunt owns other than the Wheeler Opera House and all of the Prospector Lodge. The Gravity Haus runs a cafe at the old Hub of Aspen store location, and its presence is also filling the “Compound” space, formerly home to a bar, pool hall and Mexican restaurant.

What’s next: The Cooper Avenue mall is where RH and Hunt have a gallery planned where the Bidwell Building once was. Not part of the RH endeavor are future sites for a new Red Onion tavern and a performance venue, recording center and education center for Jazz Aspen Snowmass. Construction is ongoing.

Foreign intern claims exploitation

Foreign interns allegedly working as cheap substitutes for domestic labor put Aspen employers on alert that they could be violating terms of the J-1 Exchange Visitor Program.

A former J-1 intern at St. Regis Aspen Resort Hotel filed a class-action lawsuit in October against the luxury hotel brand’s owner, Marriott International Inc., claiming that he and other foreign workers were exploited by working for “low-wages” and performing “menial work” in violation of federal law.

Daniel Esteban Camas Lopez, in his late 20s, alleged that he came to Aspen from Mexico in 2020 with a J-1 Exchange Visitor Program sponsorship with the understanding that the experience would elevate his talents as a chef and set him on a solid career path.

Lopez’s suit said the hotel worked him up to 72 hours a week when he was transferred to St. Regis Aspen because it was thin-staffed and he and other J-1 holders provided cheap labor to the five-star resort.

“I think the bigger picture is, this doesn’t happen again,” Lopez told the Aspen Daily News. “The J-1 program needs to be respected and it needs to be honored. When I arrived here in the valley … I realized that the hotels and restaurants could not function without J-1s. There’s a need for domestic employees to be the actual backbone and then the J-1s come and learn and support the rest of the employees. It needs to be honored. This doesn’t need to be happening; that is the bigger picture of justice — the J1s need to be compensated fairly. And the J1 needs to be trained.”

Update/what’s next: The suit was transferred from Pitkin County District Court to the U.S. District Court of Colorado on Dec. 15. Marriott has until Jan. 12 to file a response to the suit, according to court documents. The number of members

participating in the lawsuit, which requires a judge’s certification to reach class-action status, has yet to be determined. The Denver nonprofit legal organization called Towards Justice filed the suit.

Saga at Aspen Valley Ranch

A group of aggressive lenders was pitted against the owner of Aspen Valley Ranch and other local real estate holdings over a loan that was past due.

Legal battles played out in New York, Texas and Colorado over the fate of the ranch, which the lending group tried to foreclose on and ultimately won through a bankruptcy auction. Well, not quite. The $30.5 million sale was supposed to close in November but has been delayed until January.

Souki also pledged Ajax Holdings, a real estate holding company based in Aspen that owns the Coldwell Banker Mason Morse firm, as collateral against the loans. The same lenders have attempted to auction off the assets of Ajax Holdings.

Lawyers for Souki and the ranch accused the lender group of over-aggressively attempting to foreclose on the property after he defaulted on $90 million in personal loans.

The lenders comprised Nineteen77 Capital Solutions of New York, Bermudez Mutuari Ltd. of the Cayman Islands, Chicago-based UBS O’Connor LLC and Delaware-based Wilmington Trust National Association.

What’s next: The ranch is scheduled to be sold no later than Jan. 12, according to court records, but the Aspen Valley Ranch’s bankruptcy remains unresolved, and until it is resolved, litigation over Ajax Holdings is on hold in New York.