Trading Places

You're an ordinary person in Aspen, which is to say that at times your 15,000-square-foot rustic mountain cabin feels a little inadequate. Sadly, if you want to slap on a small addition--say, double the size of the place--you're at the mercy of the Pitkin County Planning and Zoning Commission, a famously stingy board.

Until recently. Four months ago the county threw such extravagant projects into the whirl of the open market. Since then, Aspen has become a place where wealthy homeowners can trade open space in Pitkin County's rural and remote areas for permission to realize their expansive personal projects in and around the city.

As a result, old mining families with lingering stakes in isolated mountain plots stand to become wealthy. More important, former retailer and current restaurateur Lenny Weinglass will get to add that 15,000-square-foot heated indoor tennis court and jogging track he so badly needs at his place. And publishing magnate William Ziff can build that 36,000-square-foot cabin he deserves.

The open-space-for-bigger-houses program actually has its roots in a Pitkin County ordinance passed some twenty years ago that severely limited growth. In an attempt to restrict the greater Aspen area's population growth to a target of about 2.5 percent annually, Pitkin's planners have allowed only a certain number of new residential, commercial and tourist developments each year since 1978. The quota numbers have become very low (only six new residential homes were allowed this past year), so each year developers and prospective homeowners compete against each other in a cutthroat contest for the right to build.

In November 1995 Pitkin County commissioners yanked the knot on future development even tighter. They passed an ordinance that drastically reduced potential development on land outside the Aspen metro area that was designated rural/ remote. The lawmakers didn't exactly prevent new building, but they might as well have. The new rules permit one 1,000-square-foot structure per 35-acre lot, a small septic system and no new roads, effectively rendering access to the tiny permitted cabin only by footpath (or, not unheard of in Aspen, by helicopter).

This new ordinance angered landowners who were certain they had been sitting on millions of dollars' worth of property in one of the state's most exclusive addresses. The new restrictions meant their land was now virtually useless for development. So as compensation, county lawmakers allowed the owners to sell the right to develop their land to builders who could cash in those rights closer to the city of Aspen.

As part of the package, Pitkin's planners also added a strong incentive for developers to buy the outlying landowners' development rights. If an Aspen-area developer accumulated enough of the rights, he would be spared the county's rigorous quota review system and would not have to compete against other developers for building projects in and around Aspen.

The idea of transferable development rights (TDRs) is nothing new. But in practice, TDRs have met with mixed success. Both the City of Boulder and Boulder County, for instance, have ordinances that provide for rural landowners to sell their development rights to builders in the city. "The intent is to preserve the rural character of the county and to transfer development from the rural areas into the city," explains Angela McCormick of the city's planning office.

That's only in theory, though. "The program has not really gotten off the ground here," she adds. In fact, McCormick says, the two-year-old TDR program has yet to be used even once.

TDRs have proved a hard sell in Pitkin County as well. When the county passed the ordinance permitting transferable rights just over a year ago, planners estimated that residents who owned rural land could sell their right to develop to Aspen builders for as much as $250,000. But that has not happened yet.

Aspen real estate agent Bill Venner says he has been trying to shop a small piece of ground on the outskirts of Aspen for several months. He claims he can line up development rights that would allow a builder to construct eight townhomes on the lot without having to go through the county's competitive quota system. But he has found no takers.

On the other end of the transaction, Venner says that rounding up development rights from rural landowners is no picnic. One reason is the scattered ownership of the old mining claims that dot the county's backcountry. Even if agents scouring the countryside for development rights can nail down the rightful owners of a piece of land, he says, there's no guarantee they are going to be willing to part with it.

Venner ran across one family that refused to part with its development rights because a son had died in a nearby hang-gliding accident and they wanted to keep the mining claim as a remembrance. When Venner managed to track down the owner of another claim, he recalls, "he didn't even know he owned it." But when the man found out, he didn't want to sell, either: "When I told him he owned it, he said, 'I kind of like the idea of owning a mining claim in Aspen.'"

Still, a potential bonanza awaits some mining-claim owners willing to part with their development rights. Cindy Houben, Pitkin County's community development director, says some of the claims were purchased as late as the 1970s through tax sales for less than $20. Once the TDR market gets going, she says, the development rights for those claims could sell for tens of thousands of dollars on the open market. "There's going to be a whole new economy out there," she predicts.

For now, however, the only TDR action in Aspen has involved the super-rich looking not to add new development but rather to inflate the size of their personal palaces. Lenny Weinglass gave county planners the idea.

Weinglass was one of the founders of Merry-Go-Round Enterprises, a national company that sells clothing under the store names Chess King, Cignals and Fashion Outlets, among others. At its height, the company owned more than 1,400 stores. In January 1994, however, Merry-Go-Round filed for bankruptcy. Weinglass left the company later that year.

Now a resident of Aspen, Weinglass has been busy buying up local real estate; he also owns Boogie's Diner. Last fall he applied to the county to expand his personal living quarters: Weinglass determined that he needed an indoor tennis court and jogging track, a feature that would pile another 15,000 square feet onto his 10,000-square-foot place.

Pitkin County has a ceiling on the size of residences, limiting personal domiciles to 15,000 square feet without additional review by government planners. "You would think 15,000 square feet would be enough," says Ellen Fassano, a county planner. "But remember, this is Aspen."

Pitkin's planners had been looking for new ways to promote transferable development rights (one idea was to trade TDRs for a permanent parking space in the town); Weinglass's application illustrated another possibility. Why not require people who wanted to exceed the 15,000-square-foot limit to purchase TDRs in proportion to the size of their proposed additions? Pitkin's lawmakers added the palace provision to the TDR regulations in October 1996.

Since then, they have received one other application for expansion. Early this year, William Ziff, whose family owns Ziff Communications Co., disclosed that he wanted to build onto his existing house, enlarging it from 14,700 square feet to about 36,000 square feet. According to the county's new formula, that meant he needed to purchase five transferable development rights from rural landowners.

Ziff hired local attorney Lenny Oates to arrange the deal. Oates contacted Venner, who, with the help of some old local mining families and Forest Service workers, tracked down the owners of backcountry mining claims willing to part with their development rights. Although he won't disclose the exact price, Venner says the claims averaged around $50,000 each.

For supporters of TDRs, the Ziff deal represents the perfect formula. Ziff gets his palace. Landowners zoned out of the potential real estate fortunes still pick up an estimated quarter-million dollars for selling the publisher the right to double the size of his cabin. And locals get more than a hundred acres of remote land that will never be developed. Ziff's application to expand the size of his house is scheduled to be heard by the Board of County Commissioners early next month.

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Eric Dexheimer
Contact: Eric Dexheimer