The city of Aspen’s plan to build nearly 50 units near the water treatment plant on Doolittle Drive above the hospital has been shelved indefinitely.
The city already spent almost $1 million in creating a site plan, architectural designs and construction drawings, along with feasibility studies and neighborhood outreach for Water Place Housing Phase II.
Those expenditures were incurred in 2018 and 2019 when Aspen City Council approved contracts with architectural firms 359 Design and Roland + Broughton, along with Concept One Group as construction manager and advisor, to do the preliminary work on the project.
“Over a period of years the design team has gotten deeper into the details with geotechnical work, site plans and traffic studies,” said Scott Miller, the city’s public works director.
A draft conceptual site plan was presented to council in spring 2020, but then work stopped when the pandemic hit.
At the time, City Manager Sara Ott told council that there wasn’t enough capacity for staff to continue with the project as the municipal government had to shift into response and recovery mode with the onset of COVID-19.
“I recall very clearly Sara saying we have too much going on and there was no capacity to move it forward,” said Councilwoman Rachel Richards.
Now the issue is that the fund that would pay for it doesn’t have enough money available for what could be a $50 million project, with construction and labor costs being so high, according to Miller.
The 505 fund, which pays specifically for city employee housing and is funded in part by each department in the municipal government paying into it annually, is forecasted to have $3.45 million in it by the end of the year and $14 million in 2027.
Each department allocates a certain percentage of its budget into the 505 fund every year. It grows about $2 million annually. The fund balance typically is between $3 million and $4 million.
That’s clearly not enough to cover the $1 million per unit needed to build deed-restricted housing in the Aspen area.
“In each budget deliberation, it comes up at least once,” Miller said, adding the city is always “trying to house as many people as we can as fast as we can.”
The city last month entered into purchase contracts for $1 million each for two condos in Snowmass Village and at the Airport Business Center to add to its roughly 60 units dedicated to employee housing for its employees.
The plan in 2018 and 2019 was to build up to 48 units near the Thomas Reservoir on a parcel in the Water Place development where the city has about two dozen homes for employees already.
“We did make a presentation about density and then postponed the project, but the high-level conceptual work is done, and we could go back to council with some options to develop it with much less density,” said Rob Schober, the city’s capital asset director.
Water Place was constructed in 1998 by the city on land it owns, and the parcel considered for development is located to the north of the water facilities property in challenging terrain.
“I’ve always wondered if there are better opportunities than that location,” Richards said. “But I absolutely support moving forward with the concept.”
Most of the employees who live in Water Place are considered essential workers, including police officers, first responders and utility personnel.
Miller said the city’s long-range goal is to house 60% of its workforce, which is roughly 320 employees.
“The project is on hold but on the horizon,” he said.