Aspen City Council Approves Amendment to Lumberyard Affordable Housing Project

Stephanie Kroll

In a three-to-two vote on Tuesday, Aspen City Council approved a crucial amendment to the services contract with Dynamic Program Management (DPM) concerning the Lumberyard Affordable Housing Development Project. This decision comes as a response to the evolving dynamics of the project and the need for continued support from DPM.

The Lumberyard project, slated for construction at the Aspen Airport Business Center, aims to provide 277 deed-restricted units and 435 parking spaces, with an estimated cost ranging between $325-400 million. Originally approved in October 2023, the contract with DPM appointed them as the Construction Manager as Advisor (CMa) for the project. This project delivery method involves a construction manager supplementing the owner's development staff.

The initial contract was greenlit with the 2024 budget pending approval, leading to the understanding that an amendment would be necessary once the budget was officially sanctioned. With the council's approval of the 2024 budget, the city sought an amendment to the contract to include hourly CMa management services throughout the remainder of the year.

The Add Service Request from DPM revealed that the original hourly total for services stood at $58,763. The requested change order, approved by the council, brought about an increase in the contract value by $259,184.96, making the grand total $317,947.96, inclusive of reimbursables. The city highlighted DPM's instrumental role in managing ongoing work and providing crucial oversight, justifying the additional costs.

The approval wasn't without contention. Council members Bill Guth and Sam Rose voted against the contract amendment. Guth expressed concerns about the city continuing to play a "developer role" while advancing the project's initial phase. He emphasized the need for the city's resources to focus on identifying a partner for the project to enhance efficiency.

Council member Ward Hauenstein, one of the three members supporting the amendment, voiced concerns about clarity regarding the owner's agent's liability during the construction phase. Hauenstein stressed the importance of establishing a clear firewall between the city and subcontractors to protect against potential liabilities.

Affordable Housing Development Project Manager Chris Everson addressed Hauenstein's liability concerns, explaining that many CMa contracts include various protections and follow industry-standard language. He emphasized that DPM functions as an advisor, ensuring that typical contractual protections are in place.

The approval of the contract amendment signifies a continued commitment to the Lumberyard Affordable Housing Development Project. While the decision was not unanimous, the council's deliberations highlighted the complexities of balancing financial considerations, city roles, and the necessity for clear contractual safeguards. As the project progresses, the city will continue to navigate the intricate path of development, seeking optimal solutions for the benefit of the Aspen community.

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