Since 2009, City of Aspen staff have demanded that Centennial is only in need of about $650,000 worth of repairs for all 92 units contradicting the findings of a team of engineering, construction, architectural, and mold experts who placed the figure close to $10 million. (This was in place of their primary recommendation; tear down and rebuild.) Significant amounts of public money and time have been wasted producing biased reports to back up those claims.
In 2012, City staff requested a professional estimate to reconcile the competing amounts on which all parties could agree. Athen Builders, the contractor who has spent the last 8 years reconstructing the Centennial rental units, was chosen. Their report, which includes a construction plan, establishes the repair costs at $3.2 million. City staff have tried to break up the report in order to suggest that only $2.1 million is necessary.
Centennial HOA has consulted with legal and financial advisers. It is not possible for a deed-restricted, affordable housing HOA of 92 units valued as it is to obtain a loan of this amount. If it were possible, repayment of the principal and interest would be well beyond the financial capabilities of even a free-market development. And remove any notion of affordability.
The Norris Analysis, provided by a credit analyst from Alpine Bank, shows this.
Athen Builders’ primaries have informed Centennial that the current process of executing repairs in $60-$90,000 blocks (the only option presently available) and continuing to do emergency repairs, will result in the buildings never being comprehensively fixed and an endless drain on HOA Capital Reserve funds.
Centennial HOA developed the following proposal with housing experts. Several consultants and analysts agreed that it is the best possible scenario for all parties involved:
City staff was directed to attempt to find a way to infuse cash for repairs into the community while minimizing the impact on both current owners and future owners. We would like to find a solution that does not just benefit Centennial but the affordable housing program in its entirety, which we believe the following proposal does. It will create a situation in which associations are encouraged to fund their reserves, while placing restrictions on the use of public monies for capital repairs.
With all this being said, the HOA would like to propose the following:
- The City/County funds the special assessment sufficient to fund the repairs currently estimated to be 3.2 million . It is not feasible to fund the assessment from the HOA’s capital reserve account. Because of the Council’s concern that associations not have an underfunded reserve account, any money used from the reserve would simply have to be rebuilt from owner funds. It would be no different from a loan that would need to be repaid except that there is no mechanism to recapture the expenses when the units are sold.
- A deed restriction would be recorded as part of a declaration amendment requiring the repayment of the special assessment on a pro rata basis at the sale of each unit. The amount of the special assessment would be added to the sale price of the unit, not subtracted from the appreciation on the unit.
- We believe the above proposals fit within the direction provided at the Joint Session. The City/County funds would be invested in the community housing projects and repaid with interest. They would be secured against risk of loss by the deed restrictions. This solution would stabilize the entire affordable housing program and provide a risk free way for the City/County to incentivize the associations to make repairs as they are needed and to keep the different affordable projects in top shape.
- A draft of the relevant policies and deed restrictions are shown here and would be usable across the affordable housing program. The City and County thus have an opportunity to strengthen the program and motivate owners to invest in long-term solutions and not just Band-aid repairs.
1$3.2 million is the current estimate according to the Athen study, but that number could change if it is decided to do more work, less work, invest in other energy-efficient upgrades, invest in the snow-removal system that defeats the roof ice-dams, the source of the water-intrusion, etc.
Eliminating Ice Dams from the Roofs
In addition to the reconstruction work proposed by Athen Builders, local contractor Malcom Nark of Aspen Snow Melt, produces a Heated Panel System which can be installed on the roofs that WILL ELIMINATE THE ICE DAMS CAUSED BY THE ROOF DESIGN WHICH ARE THE PRIMARY SOURCE OF CENTENNIAL’S WATER INTRUSION thus removing the cause of Centennial’s leaks, mold, structural damage, and rapid deterioration.
Centennial HOA asks that this system be included in Centennial’s revitalization as IT MAKES SENSE.
Energy Efficient Retrofit Upgrades
In addition to making Centennial safe and durable for the future, several industry experts including representatives from CORE and Energy Tech, have presented proposals to Centennial to correct the energy inefficiencies inherent to the buildings during the repair process. These opportunities are not included in the Athen Builders estimate and plan. Energy efficiencies have been part of recent afforable housing development and fit with Aspen’s core principals. Centennial HOA would like to consider bringing their poorly insulated units up to levels of modern efficiency. The more that the currently lofty utility bills can be reduced the more funds can be allocated to capital reserves and maintenance.