SNOWMASS VILLAGE – Years’ long complaints from condominium owners in Base Village that they are footing the bill to support resort amenities enjoyed by the general public are coming to a head.
They claim they pay 240 percent more than comparable property owners in Snowmass Village to financially support amenities like the Skittles lift, transportation center and parking garage.
From metro district taxes that are double those of the general Snowmass Village populace to master association fees four times higher for residential owners than businesses, the perceived inequities are now getting more attention as developer Related Colorado — operating as Snowmass Acquisition Co. LLC to develop Base Village — looks to extend its vesting rights beyond a Nov. 3 deadline.
The Snowmass Village Town Council is expected to consider the developer’s development application, which includes a recommendation by the planning commission for four additional years of vesting, beginning Aug. 18. Then by mid-October, Related Colorado representatives have said it will submit a master plan outlining the future of the entire project.
Some Base Village property owners suggest that autumn would be an opportune time to fix what they call “the metro district problem.” Property owners Bruce Smith and Richard Goodwin have been regular attendees at public meetings, and have aired their grievances in email exchanges with town staff and are part of a lawsuit challenging the legality of the metro district (there are actually two districts that function as a single unit).
“If the municipality wants to approve this application and they want to avoid litigation, one of the conditions should be the metro district gets paid off by Related,” said Goodwin, who owns a one-bedroom unit in Base Village that was purchased as an investment.
At the core of the recently amended lawsuit, “Bruce Smith, et al. v. The Related Companies, LP, et al,” which includes 29 owners of Capitol Peak condos, is, “When the developers sold the units to our clients, they never disclosed the true nature of the metro district obligation that was attached,” said lead attorney Michael Reiser.
Another claim is that the issuance of $47.5 million in bonds resulted in total property taxes that are nearly 250 percent higher than comparable properties in Snowmass Village. Whether there are enough Base Village property owners to service the bond’s debt has been called into question. Plaintiffs also have “been further damaged by the stigma associated with the failed project,” says the suit.
Reiser is no stranger to Base Village, having won back deposits of owners of Viceroy units that were untrue to their square-footage calculations. The California-based attorney also is experienced in metro district disclosure cases, as he successfully represented the 10 buyers of units at a Ritz Carlton property in San Francisco, “690 Market Street,” that disputed a $19 million bond issuance.
Inequitable arrangement
In a recent letter to Snowmass Village Community Development Director Julie Ann Woods, Capitol Peak homeowner Bruce Smith wrote: “There is no equity in how the BV finances are currently structured. SkiCo, TOSV property and business owners benefit greatly from the BV, while BV residential property owners pay the majority of the bills.”
Base Village condo owners haven’t generated much sympathy or support among the general public. Frequently heard responses to their complaints include, “Let the buyer beware” and “didn’t they read their disclosures?”
At the time of purchase of his Capitol Peak condo, Goodwin said he was told, “It was a very minor tax” and that the developer had “yet to develop the paperwork.”
Within the purchase agreement for Base Village units is a disclaimer saying it is “anticipated that the unit may be included in one or more special taxing districts. Special taxing districts may be subject to general obligation indebtedness that is paid by revenues produced from annual tax levies on taxable properties within such districts.”
According to Dwayne Romero, president of Related Colorado, “This [disclaimer] puts the buyer on notice that the buyer has an obligation to get himself satisfied” on the matter. “It’s not accurate to say things weren’t disclosed,” he added.
That said, Romero isn’t expecting the community to rally around the cause.
“I’ve heard the suggestion that [Base Village] owners said the mill levy should be spread upon the balance of the town. How enthusiastic do you think homeowners would be when they were asked to consider that?” he asked.
Public sentiment now leans heavily towards finishing the project but at the time of the 2004 vote, the community was bitterly divided over Base Village.
Dollars and sense
Some remain hopeful that the district’s future will be decided by dollars and sense.
Originally approved for about 610 units, just 250 of those have been built. That includes 14 units in Hayden Lodge, 82 in Capitol Peak and 154 in the Viceroy hotel. Seven of the units are deed-restricted for employees.
Attorney Reiser maintains that’s a small number of people to support this kind of debt.
“Fifty million dollars in bonds for 600 homeowners is a big nut,” he said.
As its receiver during Related’s bankruptcy, Jim DeFrancia was directly involved with Base Village’s finances and operation for about 18 months, until early 2012. Currently he is advising the Capitol Peak homeowners association “on a variety of issues that they’re concerned with.”
DeFrancia said the current owners must be realistic about the metro district’s limitations.
“The owners have to face the fact that we have this big debt,” he said. “The good news is, they can’t increase our mill levy.
“The debt is the debt,” he added. “Development will help and the more revenue that comes in, the better.”
But will that be too late to save the aqua center, an amenity Smith and others believe was promised to them by the first developers, Aspen Skiing Co. and Intrawest?
The overall Snowmass community didn’t appear to have an appetite for the water feature during three pre-sketch plan meetings held earlier this year. However, this is an area where the developer and the Capitol Peak owners do agree.
“It was our understanding that the aqua center achieve dual purposes — one, it was understood it would be an amenity for owners and guests in Base Village,” said Romero. “And two, it was understood it would be a broader amenity for residents. Those objectives are still valid today.”
Another area where homeowners may have a chance of gaining ground is through the master association, which DeFrancia termed as, “Parallel but different from the metro district.”
“In my opinion, there are elements of unfairnesses in it,” he said. “Times have changed and it needs to be revisited.”
One example that he speaks of surfaced during discussions about a possible Limelight Hotel for Base Village. That’s when “an obvious inequity” came to light about commercial versus residential assessments.
Commercial properties are paying 75 cents a foot compared to $3 a foot by residential property owners.
The transit center, whose costs are borne solely by Base Village property owners, is critical to the resort community’s operation.
“Initially, it struck me as a great inequity,” DeFrancia said. But he felt it “would be best addressed when we had a permanent owner of Base Village. Now we’re in a position to address it more seriously.”
District provides service plan
Special districts are permitted under Title 32 of the Colorado Revised Statues. In essence, they provide a financing tool to help fund, install, manage and maintain improvements or facilities on public and private sites.
The Base Village Metropolitan District’s organization came through a separate intergovernmental agreement that was approved in 2004, around the same time as the original Base Village application.
Its consolidated metro district/general improvement district was to provide a service plan for the financing, bonding powers, construction, management and maintenance of certain public and private improvements and facilities. While technically there are two Base Village metro districts, they function as a single entity with a joint board and joint meetings.
The board of directors for the metro district met July 30 and approved its current operating budget. Revenue is primarily earned through property taxes collected from owners, winter season parking structure fees and rentals of the Base Village conference center.
Goodwin was in attendance that afternoon in the Base Village conference center and asked association attorney Bill Ankele if metro district requirements are currently being attached to condo purchase agreements. Goodwin also wanted to know details surrounding the $47.5 million in tax exempt bonds that were sold to finance the district.
Goodwin wants the town to take notice of the issues. In a June letter to town attorney John Dresser, he said officials should consider the metro district when discussing the vesting extension with Related.
Dresser replied in an email, “Your suggestions imploring town officials to get concessions are interesting but need to be presented to the decision making officials for consideration in the course of the many public meetings that have already started and will continue in the upcoming months.”
Asked directly about its future, Related’s Romero said it’s highly unlikely that the metro district would be voluntarily dissolved. But he was open to discussing the 1.5 percent fee that’s levied on Base Village property owners who wish to rent their units.
“It would help to balance out charges throughout Base Village,” Romero said.
While some in the community believe Base Village issues should be aired while the town negotiates on Snowmass Acquisition Co.’s vesting extension, DeFrancia said, “it’s more appropriately addressed with the master plan.” And that is expected to be submitted by Oct. 15.
“As long as we’re going to revisit the whole plan, it’s the appropriate time to revisit things like equitable management of the transit center and the sensible structure of the master association based on real uses,” DeFrancia said.
Romero said he’s not going to debate some elements of Base Village that already have been decided.
“I do know this — there’s a great deal of consensus that Base Village needs to move forward,” he said. “That’s where we are focused.”
Editor’s note: Aspen Journalism and the Aspen Daily News are collaborating on coverage of Snowmass Village and other local governments. The Daily News published this story on Monday, August 4, 2014. Follow reporter Madeleine Osberger on Twitter at Madski99.