Aspen Journalism

The Crystal River winding through Placita toward Redstone. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Thursday, May 17, 2012

The listing of the Crystal River by American Rivers as one of the top-10 most endangered rivers in America this year is designed to influence the boards of two regional water districts: the Colorado River District and the West Divide Water Conservancy District.

“It is purely to influence the districts,” said Matt Rice, the director of conservation in Colorado for American Rivers. “Our interest is having them play a leadership role in the protection of this river and protection means no new dams. And success would be that the districts abandon all conditional water rights on the Crystal and the river continues to flow free and be without a dam.”

But Chris Treece, the external affairs director for the Colorado River District, said his organization and the West Divide District already have the river’s best interests at heart.

“The Crystal River goes dry just about every year and certainly will this year, in this drought year,” Treece said. “Having a little bit of storage where we pick up spring snowmelt and hang on to it for later-season release, principally for the health of the river, could be a huge benefit to the Crystal River. And I wish American Rivers recognized that.”

The lower Crystal often flows at barely a trickle in late August and into September, in large part because of significant irrigation diversions in the middle reach of the river.

But American Rivers says high spring flows are important for river health and that a dam at Placita would flood an expansive wetland that provides valuable habitat for wildlife.

The Crystal River at Placita, looking upstream. Photo: Brent Gardner-Smith

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The building that was once going to be a Little Nell Snowmass hotel in Base Village at the bottom of Snowmass Ski Area. An entity controlled by the Related Cos. of New York has recently signed a contract to buy the project, which will be the second time around for Related. But this time, there is no deal with Aspen Skiing Co. to run a five-star hotel. Photo: Brent Gardner-Smith

by Brent Gardner-Smith, Aspen Journalism
Wednesday, May 16, 2012

SNOWMASS VILLAGE — When Related Cos. announced May 1 that it had reached an agreement to buy its Base Village back from four European banks and settle ongoing litigation with those banks, executives at the private real estate company characteristically left many questions unanswered.

But after talking with a number of sources close to the deal, a few blanks can be filled in.

Is Related alone in the deal to acquire Base Village?

Yes, and no.

There are no other development partners besides Related, but there is a new financial lender involved that has not been disclosed, according to Snowmass Village Town Manager Russ Forrest.

Forrest was briefed on the deal earlier this month along with Snowmass Village Mayor Bill Boineau by representatives from Related, the banking consortium and Lowe Enterprises, which has been managing the asset for the lenders during and after foreclosure.

Pat Smith has no role in the new deal for Base Village, according to Forrest.

Smith, a developer from California, brought Related to Snowmass Village. He served as the first local point person for Related WestPac, the joint venture entity formed by Smith and Related Cos. to buy and develop Base Village and redevelop a long list of other property in Snowmass as part of a $2 billion project. Smith did not respond to requests for comment.

Aspen Skiing Co. is not in the deal either.

“We are not a financial partner with Related in any way on the Base Village project,” said Skico spokesman Jeff Hanle.

Skico and Intrawest sold the nascent Base Village project to Related WestPac in 2007 for $169 million.

Skico still owns commercial property in the completed section of Base Village, including the Treehouse children’s center and its ticket offices. It leases the Sneaky’s Tavern space.

A Little Nell Snowmass hotel, once planned to be operated by Skico, remains partially built in the stalled center of the project. It’s now unclear if the hotel will open with the Little Nell brand, which is owned by Skico.

“There is no current deal for this building,” Hanle said via email. “The Related Companies, in whatever new form of ownership they devise, will have to determine the prospective uses and operations in that building going forward, perhaps in the course of revising the entitlements and development phasing with TOSV.”

Skico still owns the Fanny Hill townhomes site just above Base Village. It has recently asked the town to continue its pending land-use application for the project until April 2013.

And, of course, Skico also operates the Snowmass Ski Area, where Base Village is located. The company has much to gain or lose depending on Base Village’s success or failure.

“We have been and will continue to be in discussions with all parties with regards to Base Village,” Hanle said. “We have a good working relationship with Dwayne Romero (president of Related Colorado) and Related and will continue to support this project however we can.”

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The entrance to the city’s emergency drain line and penstock at the Thomas Reservoir. The emergency drain line/penstock was put in place to both drain the reservoir and to carry water down the hill to a proposed new hydropower plant. The city’s efforts to classify the pipe as a conduit, in order to gain an exemption from a federal licensing process, has drawn criticism from American Rivers and others. Photo by Brent Gardner-Smith.

By Brent Gardner-Smith, Aspen Journalism
Monday, May 14, 2012

The approach used by the city of Aspen to gain federal approval for a proposed hydropower plant was cited as a bad example by a critic of the project in testimony last week before a House subcommittee on energy and power in Washington, D.C.

The Colorado conservation director for American Rivers, Matt Rice, on May 8 called into question the city of Aspen’s initial approach toward gaining approval for its proposed Castle Creek hydro plant.

He testified in person and submitted written testimony to a subcommittee of the House Energy and Commerce Committee in support of the Hydropower Regulatory Efficiency Act of 2012 (H.R. 3680).

The bill seeks to reduce the regulatory hurdles for certain types of hydropower projects, including “conduit” projects. Conduit projects involve installing small hydropower generators in existing pipelines, canals and tunnels that were not designed or built to generate power.

The proposed legislation, introduced earlier this month by Rep. Cathy McMorris Rodgers (R-Wash.) and Rep. Diana DeGette (D-Colo.), would exempt conduit projects from review by the Federal Energy Regulatory Commission (FERC), but includes a 45-day public review to vet any issues that could become controversial or are called into question, prompting a more thorough review.

Rice said the review period would be a “safeguard” that’s “critical to catch projects being proposed by developers that are intent on bending the rules,” Rice said via email after his testimony.

He noted that American Rivers, a Washington D.C.-based nonprofit dedicated to protecting and restoring the nation’s rivers and streams, worked to include the 45-day review period in the bill and has been dubbed “the Aspen provision.”

“The city of Aspen, Colorado is proposing to rebuild a 1.1 megawatt conventional hydropower project that operated from 1890 to 1958,” Rice wrote. “The proposal includes a significant increase in diversion from two streams beyond their municipal water supply demands to feed the facility. The proposed project is extremely controversial within the community and Aspen is currently in litigation with upstream water right holders.

“In an effort to expedite the permitting and avoid environmental review of the project, Aspen chose to pursue a small conduit exemption for the project,” Rice wrote in his testimony, which is posted on the house committee’s website. “But Aspen had a problem: It did not have a conduit. So the city built what was in reality a hydropower penstock and misleadingly labeled it as a conduit in order to receive favorable regulatory treatment.

“While Aspen eventually backed off of its pursuit of a conduit exemption because of public pressure, it continues to maintain that the project should qualify for FERC’s conduit exemption.

“If H.R. 3680 were to become law without this critical provision for a notification period, neither the local community nor affected water rights holders would have had an opportunity to challenge Aspen’s incorrect characterization of the project, and Aspen may well have been able to construct the project without any meaningful public review,” Rice wrote.

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A USGS staff gauge on Castle Creek was installed recently. The gauge, or “gage,” as USGS calls it, began measuring the height of the water in Castle Creek on April 26. Once enough initial data has been collected, the gauge will begin producing water measurements in cubic feet per second that show how much water is flowing down the stream. Photo: Chris Council, Aspen Daily News

By Brent Gardner-Smith, Aspen Journalism
Tuesday, May 1, 2012

A new U.S. Geological Survey stream gauge on lower Castle Creek began recording public data on April 26 as a result of $34,000 in funding from the Aspen nonprofit group Saving Our Streams.

The group is fighting the city’s proposed hydropower plant on Castle Creek and wanted the stream gauge installed so the public could tell whether the city was keeping its pledge to leave at least 13.3 cubic feet per second (cfs) of water in the stream.

“It is going to really give us a true picture of what’s left in the stream,” said Maureen Hirsch of Saving Our Streams. “It is just going to be data. And that’s going to be beneficial to the community.”

The new USGS stream gauge is number 09075400 and is called “Castle Creek at Aspen.” The data it collects is published on the USGS website at waterdata.usgs.gov/nwis/uv?site_no=09075400.

The process to develop a complete USGS stream gauge begins by installing a staff gauge to measure the height of the river. The staff gauge allows a visual reading of the water height and also includes a sensor in the river. Once different water heights are recorded for a specific location, a formula is then used to calculate how much water is moving past the gauge in a measurement known as cubic feet per second or cfs.

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The straight-edged dam across the upper Roaring Fork River that diverts water into the Salvation Ditch creates a still pond above the rocky riverbed. The owners of the ditch are being asked to leave water in the river this summer. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Monday, April 30, 2012

The Roaring Fork Conservancy and the Colorado Water Trust are asking owners of water rights in the upper Roaring Fork River basin and in the Crystal River basin to leave some of their water in the river this summer to benefit fish and the environment.

The two nonprofit organizations are seeking water owners who might be willing to lease their water on a short-term basis to the Colorado Water Conservation Board (CWCB) — without endangering their water rights — as part of an innovative program launched in the face of a looming drought.

“We’ve personally contacted them,” said Sharon Clarke, a land and water conservation specialist with the Roaring Fork Conservancy, about a number of major water rights owners in the valley. “We’re trying to reach out and get as many people to know about the program as possible.”

The snowpack in the Roaring Fork River basin was at 22 percent of average on April 29 and conditions are similar to 2002, when the Roaring Fork through Aspen was reduced to a trickle.

A meeting has been set for Thursday at 5:30 p.m. in Carbondale Town Hall for interested water rights owners to meet with representatives from the Water Trust and the Conservancy to discuss the program, which is called “Request for Water 2012.”

The deadline for water rights owners to sign up for the program is May 11. The initial round of screening is set to be wrapped up by June 6 and the leases are to be implemented — and the first round of checks to owners to be sent — by July 1.

That’s working at warp speed compared to how Colorado water law usually proceeds, but the Water Trust has designed the facilitated process in conjunction with the CWCB, which will lease the water and hold the water right for up to six months.

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By Brent Gardner-Smith, Aspen Journalism
Tuesday, April 10, 2012

A group of citizens, officials and reporters on April 10, 2012, taking a tour of the proposed Castle Creek hydro plant location below the Castle Creek highway bridge. On the tour were two officials from the Federal Energy Regulatory Commission, which is reviewing the city of Aspen’s application for the plant. Photo: Brent Gardner-Smith

ASPEN – City of Aspen officials are working to correct several mistakes in a report submitted last week to the Federal Energy Regulatory Commission regarding its proposed hydropower plant on Castle Creek.

City officials say once the mistakes in the report are corrected, the estimate of net power to be produced by both the new Castle Creek hydro plant and the existing Maroon Creek plant will likely be shown to be 6.1 million kilowatt hours a year, down from a previously estimated 6.2 million hours.

The report, as it was submitted to the federal government, indicated that the net power generated by both plants would be 5.4 million kilowatt hours.

The report, an “assessment of project operation, stream flow and power generation” relating to the proposed Castle Creek Energy Center, was dated Wednesday, April 4, and submitted to FERC the same day.

It was prepared by Kerry Sundeen, a hydrologist and president of Grand River Consulting in Glenwood Springs, who has been advising the city on its proposed hydro project for several years.

At least some of the information in the report was specifically requested by officials at the FERC, which is in the process of reviewing the city’s license application for the new hydro project.

Mitzi Rapkin, the city’s communications director, said that Aspen City Manager Steve Barwick noticed some of the mistakes over the weekend while reading the report, and that a story in Monday’s Aspen Daily News prompted other city officials to take a closer look at the report.

Rapkin said the errors in the report led to errors in the news story, which she said was otherwise well-researched (see letter, page 8).

“The city was rushing to try and get the report in before the officials from FERC came to town,” Rapkin said. “There was not a mandatory deadline, they just wanted it to get it in. It is unfortunate.”

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By Brent Gardner-Smith, Aspen Journalism
Monday, April 9, 2012

The city of Aspen’s diversion dam on Castle Creek, about 3 miles above the stream’s confluence with the Roaring Fork River. Photo: Brent Gardner-Smith

Editor’s note: This story was done in collaboration with the Aspen Daily News and was published in the newspaper’s Monday, April 9, edition. After publication, city officials said there were several errors in the report and that they were revising the report to reflect more accurate estimates of how much water was available and how much power would be produced. As of late Monday evening, when the story was posted on Aspen Journalism, city officials said they thought the amount of net power produced by the new Castle Creek plant and the existing Maroon Creek plant would be 6.1 million kilowatt hours, not 5.4 million kilowatt hours as stated in the report. We are posting the story here, as it ran in the Daily News, for the record, with the expectation that a follow-up story will be published after city officials have corrected their report.

ASPEN – Consultants for the city have lowered the estimate of how much electricity Aspen would likely produce if it built and operated a new hydro plant on Castle Creek and continued to operate the existing hydro plant on Maroon Creek, according to a new hydrologic report.

Instead of 6.2 million kilowatt hours a year as stated since last year by the city, the net annual amount produced by the two plants is now estimated to be 5.4 million kilowatt hours at full production and 3.1 million during the proposed “slow start” period. The new, lower estimates are a result of a more comprehensive look at available water against existing water priorities.

“We will update the financials accordingly,” David Hornbacher, the city’s director of utilities and environmental initiatives said Friday about the new power production estimate. “I would anticipate that it will slightly affect the number of years to pay back. But it will also still show a very positive economic impact over the project’s lifetime.”

In the report released April 4, hydrologists from Grand River Consulting have also clarified how much water Aspen proposes to divert from Castle and Maroon creeks to meet its various municipal, irrigation, hydropower and environmental goals.

Calculations based on the report reveal that from August through April each year, the city intends to divert at least 48 percent of the water from Castle Creek.

Matt Rice, the director of conservation in Colorado for American Rivers, said the organization has embraced new ecological studies that indicate taking more than 20 percent of a river’s water causes long-term environmental degradation.

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By Catherine Lutz, Aspen Business Journal and Brent Gardner-Smith, Aspen Journalism

Lower Red Mountain, where several billionaires have homes. Photo: Brent Gardner-Smith

At least 50 billionaires on Forbes’ most recent wealth lists own property or have strong ties to property in the Aspen area.

Their combined net worths total more than $242 billion and the value of their local personal property tops $741 million.

But these billionaires’ stake in Aspen is greater than the sum of their local property values. Besides playing a significant part in Aspen’s economic engine in terms of employing maids, caterers, gardeners, attorneys, accountants, and real estate agents, these are people who have power and influence — and it’s often felt locally.

Many give money to or fundraise for local organizations and causes, allowing for a proliferation of nonprofits unheard of in towns of similar size. That in turn allows arts and culture, as well as educational, social, and environmental efforts to flourish here. Several sit on boards or councils of such organizations as the Aspen Institute and Aspen Music Festival, helping to create programs and fund expansions that benefit a wider community.

On the flip side, these second-home owners have bought into a real estate culture that some say has been detrimental to the Aspen community. The building sites of new mega-mansions scar huge swaths of land; once-bustling neighborhoods sit empty most of the year; and escalating real estate prices have driven an untold number of locals downvalley or out of the valley altogether.

Some have chosen to get even more involved locally — for better or for worse, or sometimes both. Bill Koch, for example, number 14 on the Forbes 400 list with a net worth of $4 billion, is one of several plaintiffs suing the city of Aspen over its plan to use water from Castle and Maroon creeks for hydropower. Is he in this case using his power and money to highlight a really bad idea, or to obstruct a widespread community benefit? Koch also wants to install guardrails (on his dime) along winding Castle Creek Road which leads to his home— a self-serving measure that would ostensibly make the road safer for all.

Stewart and Linda Resnick, 29th on this year’s Forbes 400 list, waged a legal war against local governments in the early 2000s over an employee housing project to be built near their home. They claimed in part that the worker housing would devalue their property, now worth $15.3 million. The Stillwater housing was eventually built, but with major design modifications.

Others’ influence is felt more broadly. Stephen Ross is head of New York’s Related Cos., which developed Snowmass Base Village but then defaulted on a major loan, leading to foreclosure on the property and a partially built development that has had major business ramifications and has been the source of much local concern.

But not every billionaire with an Aspen address made the Forbes cut. The cutoff for the most recent Forbes 400 list was $1.05 billion, leaving those with a mere $1.04 billion and below in the dust.

Then there are the heirs of billionaires, and those whose fortunes could rise (or fall) by a few million, who might make the list next year.

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The channel dug along the Roaring Fork River by the city of Aspen in 1992 for flood control and as a “kayak park.” See also, an aerial view. Photo: Brent Gardner-Smith

By Brent Gardner Smith, Aspen Journalism
Thursday, March 8, 2012

A highly regarded expert on rivers who has worked for both Pitkin County and the city of Aspen has recommended that a channel dug by the city in 1992 as a kayak course along the John Denver Sanctuary be filled in because it is harming the ecosystem in the Roaring Fork River.

“With regard to the kayak park at the John Denver Sanctuary, we would recommend the complete removal of the course and reclamation of the area occupied by the course to a functional flood plain,” wrote Bill Miller of Miller Ecological Consultants Inc. of Fort Collins. “There are a number of potential problems associated with the kayak course that impact river function.”

The main issue, according to Miller, is that the kayak channel diverts too much water during low-flow months, thus compromising fish habitat.

Miller prepared a study of the condition of the Roaring Fork River in 2011 along with Ayres Associates Inc.

The study, called a “Geomorphic Assessment of the Stability of the Roaring Fork River Through the City of Aspen, Pitkin County, Colorado,” was done at the behest of the Pitkin County Healthy Rivers and Streams Board.

The study was an extension of similar work done by Miller for the county on the North Star section of the Roaring Fork east of Aspen.

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Exhibit F from a lawsuit against the various developers of Base Village, showing the difference between what was sold and what was purchased. The suit, filed by 29 condo buyers, alleges the developers deliberately overstated the size of condos in Capitol Peak Lodge, which were selling at well over $1,000 a square foot in early 2008. The developers say the buyers were duly notified that the size of their new condos was “approximate.” Photo illustration: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Wednesday, March 7, 2012

Editor’s note: Please also see the “document trove” at the bottom of this story.

Attorneys for 29 condo owners in the Capitol Peak Lodge claim in a lawsuit that Aspen Skiing Co. “participated in a joint scheme” with other Base Village developers to defraud condo buyers.

The suit claims that Skico, along with Intrawest, The Related Cos., Related WestPac and other corporate entities involved with Base Village, purposely overstated the size of the condos in the Capitol Peak Lodge in order to charge buyers more and increase profits.

The lawsuit also claims that entities associated with Related later took steps to conceal the true size of the condos from buyers by failing to list the size of the units on an official condo map and by providing overstated figures to the Pitkin County assessor.

Skico’s attorneys at the Denver law firm of Dufford and Brown have moved to dismiss the claims against Skico in the suit, which has been unfolding in Pitkin County District Court since June 2011.

“The amended complaint fails to allege any particular conduct of Aspen Skiing Co. in relation to the allegation of misrepresentation or concealment,” Skico’s attorneys claim, adding that “Aspen Skiing Co. was not a party to the contracts for sale of the condominium units.”

The owners of Skico, the Crown family, formed a partnership with Intrawest called Intrawest Brush Creek Development Co. LLC to develop Base Village, before selling the project to entities controlled by The Related Cos. and Related WestPac in 2007.

An official with another entity formed by the owners of Skico and Intrawest — Base Village Phase 1A Development Co., LLC — signed purchase and sale agreements in 2006 with prospective buyers of the 82 condos in the three Capitol Peak Lodge buildings at the bottom of Snowmass Ski Area.

When buyers later closed on their condo sales in 2008, they did so with Base Village Owner LLC, an entity controlled by The Related Cos. and Related WestPac, not Skico.

But the attorneys for the 29 condo owners who have filed suit, Matt Ferguson of Garfield and Hecht in Aspen and Michael Reiser of Walnut Creek, Calif., assert that Skico acted as a developer and an agent in the Capitol Peak Lodge sales and so had an active role in the deal.

“Skico’s insinuation that it had no involvement in the development and sales of the units in the Base Village project is disingenuous,” a brief filed by Ferguson and Reiser on Feb. 21 stated. “ … Skico aided and abetted and participated in a joint scheme with all other Intrawest defendants in an effort to defraud plaintiffs.”

The attorneys for the condo owners have grouped the nine different defendants named in their lawsuit into the “Intrawest defendants” and the “Related defendants,” depending on which phase of the project they were involved with.

Skico, given its association with Intrawest and its sales entity, Playground, has been deemed to be an “Intrawest defendant.”

When asked for comment on the claims in the lawsuit, Dave Bellack, a senior vice president and in-house counsel for Skico, responded by saying “We don’t believe that the Aspen Skiing Company had anything to do with any of the allegations of these plaintiffs.”

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