Out of funds, Aspen looks to private sector for public housing
ASPEN, Colorado ” The Aspen city government is calling on private developers to build affordable housing on two publicly owned properties. One is on Main Street, and the other at the base of Smuggler Mountain.
Because the government has depleted its housing fund as a result of tens of millions of dollars spent on land purchases during the past two years, no money is left to actually build housing.
So city officials are putting out a request for qualifications (RFQs) to attract developers who are interested in partnering with the government to build more than two dozen housing units. The projects are slated for 802 W. Main St. and 517 Park Circle. The Main Street parcel could accommodate 10 units or more and there would be at least 15 units at Park Circle, according to city officials.
It has been the city’s policy since 2007 to bank several parcels of land and then use bond financing to build housing units, which is the plan for the second phase of Burlingame Ranch and a parcel located at 488 Castle Creek Road, according to Assistant City Manager Barry Crook.
Given the current economic environment and the projected revenues for the city housing fund, officials recognize the challenges in funding new affordable housing. Exploring public-private partnerships is one option to build private capital and develop more units faster ” rather than waiting for public dollars to accumulate and build housing several years from now, Crook said during a Tuesday meeting with the Aspen City Council.
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“We want to see if the development community is interested in partnering with us on several parcels,” Crook said, noting the Main Street and Park Circle parcels are the first priorities. “Our recommendation is to allow maximum flexibility while the proposals are out there and see what the community brings us.”
Developers will be asked as part of a competitive bidding process to provide their specific plans, such as a project’s overall vision; a detailed financing proposal; a development pro-forma; possible ownership stakes and a host of other details.
A public-private partnership with the city of Aspen could be formed many different ways and officials are looking to developers for their ideas.
Council members on Tuesday outlined some basic principles that should be included in any proposal. Council members said they want proposals that focus on low and mid-income one-bedroom units that are both rental and for sale.
Mayor Mick Ireland said enough affordable housing has been built that accommodates higher income individuals with families.
“We’ve always built high end and not low end,” he said. “I think we need to focus on the other 95 percent.”
Council members didn’t appear thrilled about allowing free-market components to be included in any affordable housing development proposal as a way to subsidize the costs, but said they are willing to consider it.
“It’s just fuel to offset the capital challenge that we all have,” City Councilman Dwayne Romero said.
The concept was brought up by Crook, who said the city received an unsolicited offer by an individual to put an office for a nonprofit at the Main Street location.
The RFQs are expected to go out in the coming weeks. Officials said they believe because of the slow economy, the construction industry might jump at the chance to partner with the government.
“My prediction is that we are going to have a great deal of interest,” Romero said. “The timing is opportune.”
“That is why we are here ” to take advantage of the market,” Crook responded.