City’s Home Demo Program Catching Heat

The city of Aspen’s rules surrounding the demolition of residential properties face legal opposition mounted by the owner of two single-family homes in the West End neighborhood.

Nevada-based Lake House Aspen LLC’s lawsuit against the city asks the court to invalidate Aspen City Council’s decision on Oct. 30 to reject the ownership’s appeal to raze two homes at 400 Lake Ave. and 410 Lake Ave. for future residential development. Lake House Aspen originally initiated two appeals, one for each property. The matter was consolidated into one hearing. 

The suit’s filing on Nov. 24 came less than one week before the city council on Tuesday passed a resolution in a 3-2 vote giving the Community Development Department the authority to seek a change to the land use code, as it pertains to the selection process for building-permit applications, of which there is a finite number. 

Ben Anderson, the city’s interim director of Community Development, told the council that the change would be to abandon the email application-selection process in favor of a lottery for building permit applications. A first and second reading of the ordinance goes to the council in December.

“This resolution does not amend the land use code,” Anderson told the council. “It simply gives staff direction to pursue code amendments.”

The email application-selection process did not go as the Community Development Department intended last year. Hundreds of emails for the same eight properties deluged the city’s server on Aug. 8, 2022, which coincided with the termination of the council’s ban on residential development that had been in place since December 2021.

As part of the city’s overhaul of its land use code, it was a new process aimed at restricting the number of demolition allotments to six per year to slow the pace of development and take pressure off the county landfill being populated by home materials, among other reasons. Two allotments also are allowed annually to owners of an Aspen home for at least 35 years. 

The application process drew 13 suitors, the first six of whom were awarded building permit applications by Community Development. The winners, however, learned five weeks later their applications were being rejected because they had overwhelmed the server and effectively cut the other five applicants out of the process.

A total of 406 emails were associated with eight properties represented by the same planning firm, BendonAdams of Aspen. After the first six property owners were told they would be awarded demolition permits, they were later told that the permits had been denied because of the email bombardment. Rather than going to court with the rejected property owners, the city agreed to award them demolition allotments, debiting the six allotments from those reserved for 2024. 

That decision resulted in four property owners (who did not participate in the 2022 email process) appealing to the city for demolition permits that no longer were available next year. In June, the city council allowed them to have the demolition permits, the suit said.. 

“The City denied Plaintiff procedural due process by forcing Plaintiff to submit the Application, which could not possibly be approved by ComDev, only to force Plaintiff to appeal to City Council, where Plaintiff was arbitrarily treated differently from similarly situated property owners and (Councilman John) Doyle went far afield of the record,” said the suit, which was filed by Aspen law firm Garfield & Hecht in Pitkin County District Court.

According to the suit, Doyle’s rationale to deny the Lake Avenue appeal was because the demolition allotment system was meant to “keep people from scraping the, their houses, and it ending up in our landfill.”

The suit continued, “Notably, the record contained no information regarding how Plaintiff intended to or planned to dispose of waste created by the demolition of 400 Lake and 410 Lake. Doyle simply went outside of the record and made a presumption without any evidence. Even worse, Doyle injected his own personal experiences into the appeal when he based his decision on the fact that, in the past, he ‘had the pleasure of being inside’ 400 Lake and 410 Lake, and, in his opinion, they were nice and did not need to be demolished.”

The plaintiff acquired the two properties for a combined $29.8 million in December 2021. The homes on both lots were built in 1996, according to property records 

Doyle joined Councilman Ward Hauenstein and Mayor Torre in their denial of the appeal; freshman councilmen Bill Guth and Sam Rose voted to approve the appeal. During the hearing, Rose noted the apparent inconsistencies between the council’s October rejection of the Lake Avenue properties and its June approvals for the four other appellant homeowners. As well, Guth said the decision was “welcoming a lawsuit.”

A lawyer with Garfield & Hecht leading the litigation for Lake House Aspen also spoke at this week’s meeting and did not go easy on the council. Chris Bryan argued the council’s “artificial suppression” of the demo-permit supply created a “natural demand” and demonstrated that the council lacked the economic astuteness necessary to examine a cap on demo permits.

“Look, the current system is an affliction, and the proposed cure isn’t a cure at all: It’s a Band-Aid,” he said, noting that former Community Development Director Philip Supino, who was the architect of the idea, was not able to defend it. “But worse, because whereas a Band-Aid might be ineffective when I put it on my 5-year-old to help his boo-boo, this is a Band-Aid that is worse than the affliction you’re purporting to remedy. This Band-Aid of a lottery system is actually going to exacerbate and not alleviate your problem.”

Aspen property owner Michael Maple also expressed his chagrin over the council’s decision on the demolition restrictions. For many people in Aspen, notwithstanding the second-, third- and fourth-homeowners, he said, the property they own are their most valuable assets. Losing the ability to redevelop their property, he argued, is a “fundamental taking and the city will be sued over and over and over again for taking people’s property values if this demolition allotment process continues.”

City Attorney Jim True said the city had not been served with the complaint and would not be making a comment on the matter at this time. 

At this week’s council discussion over the demolition program, Doyle said: “This whole demo permit thing, these six demo permits that we approved per year with two additional available for people who lived here for over 35 years … those are for when you are completely scraping the residence. The idea behind this policy was to help preserve some of the properties so the whole thing wouldn’t be scraped.”

A permit is required for homes undergoing 60% demolition.

“If you can figure out how to preserve (60%) of your original structure,” Doyle said, “that still gives you a lot of leeway to build a fabulous new structure.”

Rick Carroll | Aspen Daily News | December 1, 2023