Aspen Journalism

A streamlined process? Maroon Creek in late summer, with about 14 cfs of water flowing through it, just below the city’s diversion dam. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Monday, January 23, 2011

The city of Aspen’s request to the feds to use an expedited review process for its Castle Creek hydroelectric project has run into stiff opposition based on comments submitted to the agency that’s reviewing it.

Scott Fitzwilliams, the supervisor for the White River National Forest, sent a to the Federal Energy Regulatory Commission (FERC) on Jan. 10 in response to the city’s request to use a “traditional licensing process” instead of an “integrated licensing process,” or ILP.

The Forest Service recommended that a more lengthy review process be employed for the Castle Creek hydroelectric project because it allows FERC staff to be involved from the beginning and a process similar to full-blown NEPA (National Environmental Policy Act) review will occur. There also is more opportunity for back-and-forth discussions regarding study designs, dispute resolution and public participation, Fitzwilliams wrote.

For Matt Rice, the director of conservation at the Colorado chapter of the nonprofit organization American Rivers, the letter from the Forest Service to FERC is a big deal. American Rivers opposes the city’s request for an expedited process and is questioning the project’s environmental impacts.

“It’s huge,” Rice said. “We have not had very much success requesting an alternate licensing process without a request from a federal agency as well.”

City officials in December filed a pre-application document and a request to use the “traditional licensing process,” or TLP, with the federal agency.

FERC, based in Washington, D.C., issues licenses for hydro projects.

The city told FERC officials that going the TLP route would save time, money and prevent unnecessary duplication of effort when reviewing the proposed Aspen hydro project, which would use water diverted from Castle and Maroon creeks to spin a turbine to make electricity.

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It’s still all about the view, including this view of Mount Daly from the McLain Flats area, where a buyer paid $16 million for a home in 2011. Photo: Brent Gardner-Smith

By Catherine Lutz, Aspen Business Journal
and Brent Gardner-Smith, Aspen Journalism
Monday, January 23, 2012

ASPEN – For many watching Aspen area real estate, 2011 will be remembered for its large volume of high-end home sales.

Twenty-two residential properties in the upper Roaring Fork Valley changed hands for $10 million or more last year — equivalent to nearly two each month.

Those sales added up to more than $325 million, roughly one-quarter of Pitkin County’s $1.27 billion worth of property transfers — on less than three percent of the number of transactions.

Clearly, the buyers of these luxury properties have not been too badly hurt by the Great Recession — yet they are price savvy, as many of the estates changed hands for significant discounts.

Many of the properties had also been for sale for quite some time. Still, the new owners generally paid a higher price per square foot than other segments of the market.

The buyers vary. They are self-made businessmen, heirs to ongoing concerns or international billionaires. Some have strong ties to Aspen and already own property here, while others are new to the scene.

But what binds them all — a big league sports team owner, a major grocery store chain CEO, and an investor in Vail among them — is that they chose Aspen as a place to invest in both property and lifestyle.

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This is the road that winds through a parcel of BLM land that splits Bill Koch’s Bear Ranch east of Paonia Reservoir. He would like to trade the BLM land for other federal land in Colorado and Utah. Peaks on public land in the Raggeds Wilderness are visible in the background. Photo: Brent Gardner-Smith

By Madeleine Osberger, for Aspen Journalism
Monday, Jan. 16, 2011

PAONIA, Colo. — Billionaire Bill Koch, who has made his presence felt in Aspen by suing the city over hydropower water rights and proposing a million-dollar guardrail on Castle Creek Road, has also attracted the attention of residents over McClure Pass.

Koch, who is building a Western-style compound on his 4,500-acre Bear Ranch east of Paonia Reservoir and below Ragged Mountain, is proposing a federal land swap that would grant him control of a three-mile strip of BLM land separating his ranch.

In exchange, he would give the government private land he controls overlooking Blue Mesa Reservoir in Gunnison County and an in-holding he has under option in Dinosaur National Monument, along with other inducements to win local public support.

On Wednesday at a Paonia Town Council meeting, so many people showed up to comment on Koch’s proposed land swap that the meeting had to be moved from town hall to a theater across the street, where the crowd still filled the main floor, balcony and aisles.

The assembled crowd of ranchers and teachers, retirees, mine workers and other locals were intent upon speaking their piece about the proposed land exchange, as were representatives of Bear Ranch.

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The heart of the Base Village metro districts, where condo owners now have a bigger debt burden. Photo: Brent Gardner-smith

By Brent Gardner-Smith, Aspen Journalism
Sunday, Jan. 15, 2012

SNOWMASS VILLAGE — Interest rates on $32.6 million in bonds two Base Village metro districts issued in July 2008 have shot up to 10 percent from 1 percent as a result of actions taken recently by the Related Cos., the former owner and developer of the project at the base of the Snowmass ski area.

James DeFrancia, an executive at Destination Snowmass Services, which was appointed as receiver for the financially struggling project, said the increase in the bond interest rates could force Base Village property owners in 10 years to pay off about $65 million in debt, not $32.6 million.

“They are causing the metro district and owners considerable harm,” DeFrancia said of Related. “I don’t think it is very ethical business behavior.”

DeFrancia, who is also president of Lowe Enterprises Community Development, claimed that by forcing the bonds to be called last month under a tight deadline, Related was acting out of spite, likely as part of an ongoing legal and financial battle between Related and a consortium of European banks that now own the stalled project, where 611 residential units once were envisioned.

“There was no reason to do this,” DeFrancia said. “The Related people were shamefully uncooperative. They are obviously doing this to be obstructionist and intransigent.”

Dwayne Romero, president of Related WestPac, views the situation differently.

“Related WestPac is merely exercising its rights under the bond documents, which were negotiated back in 2008,” he said in a prepared statement.

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A snowmaking gun on Little Nell on Aspen Mtn. earlier this winter. The National Ski Areas Association claims a new Forest Service rule could hinder ski areas’ ability to make snow by illegally taking water. Photo: Brent Gardner-Smith

Here is a copy of the lawsuit, NSAA v. USFS, filed in the Tenth Circuit in Denver on Jan. 9, 2012 by the National Ski Areas Association against the U.S. Forest Service over water rights tied to ski areas.

NSAA also named the U.S. Dept. of Agriculture, the parent organization of the Forest Service in the suit, as well as Harris Sherman, a former Denver lawyer who is now the Under Sec. for Natural Resources and Environment at the Dept. of Agriculture.

Here is a copy of the exhibits that were filed in the suit.

The USFS and other defendants have yet to file an answer to the suit.

Here is a position paper from NSAA on the lawsuit.

Here is testimony from an attorney for NSAA at a Congressional hearing on the issue on Nov. 15, 2011.

Here is a letter on the new regulations from Rep. Scott Tipton (R) of Colorado to Tom Tidwell, chief of the U.S. Forest Service.

Here is some recent news coverage of the lawsuit:

Denver Post – National ski group sues Forest Service to keep water rights

The Colorado Independent: National ski areas association sues U.S. Forest Service.

Vail Daily: Ski industry suing Forest Service over water

KDNK: Ski area battle Forest Service for water rights

Here’s the NSAA lawsuit embedded in a Document Cloud reader (which has a zoom function):

The city’s diversion dam on Castle Creek, which is about 2.5 miles above the proposed hydro power plant. Photo: Brent Gardner-Smith

By Brent Gardner Smith, Aspen Journalism
Wednesday, January 4, 2012

ASPEN – The nine people behind a lawsuit against City Hall challenging its proposed hydro plant all own multimillion-dollar Aspen-area properties and some hold consumptive water rights on Castle and Maroon creeks.

The city of Aspen, through its Denver-based water attorney, filed a motion in to dismiss the lawsuit this past fall based on the notion that the plaintiffs don’t have standing to challenge the city’s water rights.

The plaintiffs recently submitted information to the court either detailing their water rights or giving other reasons why they should be allowed to sue the city over its water rights.

In the mix of property owners are two billionaires and two Aspen locals with a history of successfully taking on local governments.

The property owners sued the city in September 2011 in state water court (case number 2011CW130) in an effort to strip the city of its right to use water from the creeks for a new hydropower plant.

The city responded three weeks later by telling Judge James Boyd that the property owners don’t have the right to make their claims.

“The complaint does not identify which plaintiffs own water rights, what water rights they may own, or how those are or may be affected with respect to the alleged abandonment of the hydropower component of the subject water rights,” Cindy Covell, the city’s water attorney, told the court in a motion to dismiss the case.

The plaintiffs responded Oct. 24 with a 16-page brief and 139 pages of exhibits documenting their water rights and other interests.

The plaintiffs’ initial claim was that since the city has not used its hydropower water rights on the two creeks since 1961, it no longer has the right to divert 25 cubic-feet-per-second of water from Castle Creek and 27 cfs from Maroon Creek for hydropower use.

One of the most recognizable names in the lawsuit is that of Bill Koch, a billionaire who now owns one of the most scenic homesites in the Aspen area in the upper Castle Creek Valley.

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Here’s an updated graphic look at the below-average snowfall the upper Colorado River basin is experiencing so far this winter.

The graph, above, from the Natural Resources Conservation Service, shows that our regional snowpack, as of Jan. 9, is still well below the level of snow we enjoyed in 2011, and is also below the level of snow at this time in 2010 and 2009.

The thick blue line on the lower left of the graph represents this year’s snowpack in the upper Colorado River basin, which includes the Roaring Fork River watershed and the Aspen area. The storm that dropped about eight inches on the mountains in the basin last weekend caused the blue line to tick upwards, but it still has a long way to go to catch up with the average.

The thick red line represents the average snowpack for the winter. And the thin blue line shows last year’s snowpack, when the Aspen area and most of northern Colorado was awash in snow.

The statistics shown on the upper left-hand corner of the chart show that the snowpack in the upper Colorado River basin is 44 percent of last year’s snowpack and 59 percent of average, as of Jan. 9.

The data is based on “snow water equivalent,” which according to the Conservation Service, “is is a common snowpack measurement. It is the amount of water contained within the snowpack. It can be thought of as the depth of water that would theoretically result if you melted the entire snowpack instantaneously.”

- Brent Gardner-Smith

Base Village in Snowmass Village on a recent sunny afternoon. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Wednesday, Dec. 21, 2011

Lowe Enterprises Real Estate Services, a subsidiary of Lowe Enterprises, has a signed a contract to manage Base Village once it comes out of receivership next month.

The current court-appointed receiver is Destination Snowmass Services, Inc,. which is also a subsidiary of Lowe Enterprises.

DSS was formed specifically to perform the duties of a court-appointed receiver after the European lenders for Base Village foreclosed on the project in July 2010.

The lenders – two German banks, a Danish bank, and Belgian bank – bought the outstanding Base Village debt in November in a public trustee sale and now have the certificate of ownership in hand.

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The east side of Richmond Ridge, where Aspen Mountain Powder Tours has the exclusive right to used motorized vehicles to make laps. The run called McFarlane’s is the big gulch in the middle-left of the photo. Trails called Wine Tree and WOFTR (Watch Out For The Road) are further out the ridge. Photo: Dan Bayer

By Brent Gardner-Smith, Aspen Journalism
Sunday, Dec. 11, 2011

There have been many different visions through the years on how best to ski the terrain off of Richmond Ridge.

Proponents of the Little Annie ski area once mapped out six lifts, all of them coming together on the ridge’s flat summit. Four of the lifts were to serve the terrain on the east side, and one was to be built in Little Annie Basin. The lifts were approved by the Forest Service in 1981, but the ski area was never built.

Commercial snowcat operators have been working both sides of the ridge since at least 1970. And each operator back there has generally preferred to first ski out the powder on the west side, and then move over to the colder east side.

Over about the last 20 years, snowmobile-aided skiers have found the combination of winter-only roads and near-empty slopes off of Richmond Ridge to be increasingly appealing, despite the fact it is nearly impossible to make motorized laps without either trespassing on private property or violating federal regulations on public land.

And for the past seven years, Mike Sladdin of Aspen and his group, Powder to the People, have been working to open up the prime skiing terrain on the east side for anyone on a snowmobile. But today, the only motorized use the Forest Service allows there is by Aspen Mountain Powder Tours and its three snowcats.

(Disclosure: Mike Sladdin is married to Catherine Lutz, who is on the board of directors of Aspen Journalism).

Sladdin’s vision for the ridge was denied this year through a series of meetings and decisions, the last of which was held on Oct. 25 with officials from the Forest Service and Aspen Skiing Co., which owns the Powder Tours operation.

And ironically, his efforts appear to have tightened the restrictions on snowmobile-skiing on Richmond Ridge, not loosened them.

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A view of the core of Base Village this fall. The open area below the Elk Camp Gondola is slated for the Little Nell Snowmass hotel. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Friday, Dec. 2, 2011

ASPEN — The new owners of Base Village, a consortium of four European banks, issued their first statement Thursday about the future of the project.

“The international bank group which is now the owner of the property will work with the town of Snowmass Village and other parties to allow the completion of this project,” said Andreas Henry, the head of communications and a managing director at FMS Wertmanagement, which is based in Munich, Germany.

It wasn’t much, but it was one of the few public statements made by an owner of the project since the previous owners, Base Village Owner LLC, a subsidiary of the Related Cos. of New York, walked away in 2009 and defaulted on a $520 million loan from the banks.

“It sounds like a general statement,” said Russ Forrest, the Snowmass Village town manager. “But I think it is a positive step forward in that we are now at least dealing with owners versus a receiver. We are still looking forward to working with a new developer. That’s where we expect to get into meaningful discussions.”

FMS Wertmanagement, an agency of the German government, is in a position to speak about the future of Base Village because it has been charged with liquidating the assets of the Hypo Real Estate Group, a bank unit that the German government nationalized in the wake of the 2008 financial crisis.

A unit of the Hypo group, Hypo Real Estate Capital Corp., was the lead lender on the Base Village loan. Other lenders include Dekabank Deutsche Girozentrale of Frankfurt, Germany; KBC Bank N.V., of Belgium; and Danske Bank AS, of Denmark.

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