The owner of the historic Poppies restaurant building on the S-curves in Aspen is proposing to build a 39-bed seasonal employee “bunkhouse” in order to create housing credits and sell them to other developers who need to meet employee housing mitigation requirements.
Matt Brown is the manager of 834 W. Hallam Associates, which paid $1.4 million in February for the purple Victorian house that was built in 1886 and sits on a 6,600-square-foot corner lot.
The building was home to the romantic Poppies Bistro Café from 1981 to 2009, but has been mainly dark since then. It’s located right next to, and right across the street from, popular bus stops on an incessantly busy stretch of Highway 82 near Eighth Street that defines the entrance to Aspen.
Brown has submitted conceptual plans to the Aspen Historic Preservation Commission — for a work session on Wednesday evening — that show 39 beds in 10 dorm-style rooms. Each dorm room has a small bathroom.
A kitchen, dining and socializing area would be inside the historic Poppies building, which would remain detached from the new three-story bunkhouse building.
A two-bedroom unit would be on the second floor of the historic structure, which means there could be 41 people living in the new complex.
“It seems like an ideal site for an affordable housing program,” said Brown, who has developed hundreds of units of student housing in Pennsylvania. “So we’re going to give it a shot.”
If he proceeds with his conceptual plan, Brown would become the second developer after Peter Fornell of Aspen to build units for housing credit certificates from the city.
“With the ability to generate these credits, we can subsidize the cost of this housing,” Brown told the Aspen/Pitkin County Housing Authority board last Wednesday during an informal presentation. “The rent from a bunk house is not paying this off. So these credits are really essential to this project.”
Brown got mixed feedback on his bunkhouse idea during the housing board meeting.
“I think there is a need for dormitory style housing and I think it is the right location,” said board vice chair Rick Head. “It’s on the bus lane. It’s got everything it needs to get my support.”
But board member Steve Stunda was not impressed.
“The amount of credits that you are seeking is extraordinarily high,” Stunda told Brown. “For me to get behind this, I’d have to see a complete diminishment on these credits.”
Brown said after the meeting that the housing credits would likely be category 2 credits.
Fornell’s experience has shown such credits to be worth at least what it costs for a developer to pay cash to the city instead of building a category 2 unit, or $237,000.
At that rate, 39 housing credits could be worth $9.2 million.
For some developers, buying the city’s housing credits makes more sense than either building the required employee units, or using the city’s cash-in-lieu-of-housing option, which Aspen City Council tends to discourage.
Fornell launched the program in 2010 by creating 14 housing credits at a property located at 301 W. Hyman Ave. The credits were granted to Fornell for creating enough category 2 housing for 14 employees. He has since sold 12 of the credits.
Fornell’s second housing credits project is now under construction at 581 W. Main St., and will create 24 credits.
Forest Service lease?
Brown said he is discussing the possibility of a long-term lease for the Poppies bunkhouse with the U.S. Forest Service, which is interested in leasing most of the 39 beds, should they materialize.
The Aspen Ranger District is right next door to the Poppies property, and Brown is hoping he can park cars from his project there, and that the U.S. Forest Service can add some adult supervision to the bunkhouse.
“If we make it just open-bunk housing, it could get a little crazy,” Brown told the housing board. “Chances are, there will be some wild sort-of youngsters there. That goes with the nature of that type of housing.”
That issue aside, Forest Service likes Brown’s concept.
“We have quite a bit of need for bunkhouse-type housing,” said Scott Fitzwilliams, the supervisor of the White River National Forest, in a phone interview. “We’re very interested to see if we can’t enter into some sort of long-term situation.”
Fornell was critical at the housing board meeting of the idea of leasing all of the proposed beds to the Forest Service.
He said the housing developed for credits needs “to be for the benefit of people that work in our community, and I don’t count the Forest Service there,” he said. “First of all, they are only here half the year doing their thing, and second of all, they’ve shown their disdain for the community in all of the actions that they’ve taken with the real estate that they own over there, and the way that they’ve treated it.”
Fitzwilliams, informed of Fornell’s comments, noted that local Forest Service employees are people too, and that the public land surrounding Aspen is what makes the resort community possible in the first place.
But he did acknowledge the agency’s lack of property management expertise.
“We have proven to be ineffective landlords, and a big part of that is our maintenance budget keeps going down the drain,” Fitzwilliams said. “So Mr. Fornell is right. As evidenced by our properties, we’re not very good at it.”
The Forest Service has a worn-out employee bunkhouse on a corner of its Aspen property that houses between 20 and 25 people each summer.
Last year, the Forest Service sold five single-family lots carved out of its West End parcel for $7.1 million. The lots made up about a third of the agency’s Aspen property.
The Forest Service now plans to use part of the proceeds from the sales to build a new visitor’s center and offices on the corner of N. 7th Street and Hallam Avenue, using another third of their land in the process.
The remaining third of the Forest Service property includes the bunkhouse, and Fitzwilliams said he’s exploring the idea of entering into a long-term lease for that land with the city of Aspen, which could then build employee housing on the site.
Editor’s note: Aspen Journalism collaborated on this story with the Aspen Daily News, which published a version on Tuesday, April 8, 2014.