Council attempts to soften stance on horizontal zoning

“We are willing to bend a little”

A somewhat torn Crested Butte Town Council agreed to try to help those business owners on Elk Avenue facing a bad economy and the rigors of horizontal zoning. While not entirely heeding the pleas of some local business owners asking for help, the council did try to lighten the load.

Under the horizontal zoning code of Crested Butte, both floors of the Somrak Plaza building on Elk Avenue fall under the ordinance and are required to rent frontal space to retail shops. The Times Square building across the street is the only other building to fall in the same category.
The controversial ordinance, which was passed about 18 months ago, limits office space inside buildings along Elk Avenue or within 40 feet of the main commercial thoroughfare. The idea is to promote retail business in the town’s shopping core, as opposed to filling the space with offices.
Somrak Plaza co-owner Chuck Cliggett made the case that only one of the floors should fall under the rules, allowing the upper level to rent to service and office uses. “We are just asking to be treated the same as everyone else,” he said. “We want to be treated equally. We feel fine having one floor designated for horizontal zoning but feel it is unfair for both floors to be subject to the ordinance.”
Cliggett made the case that the current economy was killing his chances of leasing his space. “It is horrible out there right now,” he said. “It’s tough.”
The upper floor had a real estate company renting one side and a mortgage broker renting the other until this past summer. Both businesses closed.
His partner and building co-owner Dave Dlugasch reiterated the harsh economy theme. “We lost our biggest client and can’t get anyone else in there,” he said. “I am asking for help. On Elk Avenue there are at least a dozen vacancies. One thing that bothers me is that as we head into Christmastime, one of the town’s busiest times, there is a ‘for rent’ sign in the window. We have visitors coming and we need to fill those spaces.
“Times have changed since that ordinance was passed,” Dlugasch continued. “In this economy I still have my mortgage, my bills, my taxes to pay. Give us some leeway here.”
Cliggett emphasized that putting both Somrak Plaza floors under the horizontal zoning restrictions was onerous. “It is a policy decision and do you want a policy that treats someone unfairly? That’s what it is,” he said.
Councilperson Skip Berkshire stated that the ordinance provides a six-month grandfather clause that allows similar businesses to replace departing businesses, even if they aren’t retail in nature.
“The six-month grandfather clause is no help in this economy,” said Cliggett.
Town attorney John Belkin said the ordinance was working to some degree but the economy was making it rough. “The economy is exacerbating this greatly,” he said. “The council at the time was trying to regulate an impact of too many offices on Elk Avenue in the main shopping district. The economy has changed. Ideally, the real estate office would move out and a nice furniture store would take its place.”
Robb Fessenden, a property owner with commercial space at the far west end of Elk Avenue, agreed. “It’s a different world than when you originally passed horizontal zoning,” he told the council. “It’s way different now. It is unfair to these guys in Somrak Plaza and unfair to me way, way up there in the zero block of Elk Avenue. The amount of money people have to pay in commercial real estate taxes is huge and when you take away a big part of the potential rental pool, it really hurts.”
Berkshire felt the pain in the argument but was reluctant to change the law. “I am disinclined to diddle with the ordinance just because of the economy,” he said. “It opens up a whole ball of wax. I don’t like that. But maybe we can look for a way to soften the impact of the economy. What about extending the grandfather clause another six months? Give some more wiggle room to these people who are feeling constrained.”
Councilman Dan Escalante felt the ordinance was a case of over-regulation. “I think it is rare to get everything right the first time. I think it is good we are revisiting this. It makes sense to try to help some property owners and not be so heavy-handed.”
Councilman Reed Betz was less enthusiastic. “If we adjust this because we think it is over-regulation, I’m afraid it will open a big can of worms,” he said. “I’m back and forth on this issue.”
“I struggle with this one too,” added councilperson Kimberly Metsch. “I see the intent the council was trying to accomplish. With those big windows there, the building screams retail. With or without the current economy and horizontal zoning, no one is going to rent those spaces at the moment.”
Rankin said he was fine with Berkshire’s idea of extending the grandfather clause. He also wanted the staff to look into condensing the restricted uses outlined in the ordinance.
“No decision we make will cause your spaces to be rented right now,” said Berkshire. “It’s the economy. It’s not the zoning. In fact you’re in one of the best spots with the grandfather clause. You can rent to anyone at the moment. It’s the guy with a first-floor vacancy that doesn’t fall under the grandfather clause that’s really screwed.”
“I can vouch for that,” chimed in Fesseden. “My tenant is leaving and I won’t have those options.”
Rankin suggested having town staff pursue the adjustment to the ordinance. “I think the council generally believes in horizontal zoning,” he said. “But it is hard economic times and we are willing to bend a little. But I think we have to do it for all the buildings on Elk Avenue.”
The town staff will look at tweaking the ordinance and bring some options back for the council.