Boulder, Ash House owner agree to settlement

BOULDER — Attorneys representing Boulder and the owners of the Ash House apartment building signed a settlement agreement this week that requires the landlord to remove unpermitted bedrooms and return the units to the conditions previously approved by the city by Oct. 7.

“The city has been proactively working with the property owners on a resolution. Our hope is to make this property safe for the students who are living there as quickly as possible,” Boulder’s director of planning and development services Brad Mueller said in a statement Thursday. “We know this has been a disruptive situation for the students and are committed to doing what we can to work toward a fast resolution with the property owners and bring certainty to tenants.”

The settlement, a copy of which was provided to BizWest by Boulder staff, was inked after Boulder County District Court Judge J. Chris Larson last week temporarily blocked an attempt by Boulder officials to shutter and vacate Ash House, an off-campus apartment building owned by 891 12th St LLC and occupied by CU students, over numerous alleged building-code violations.

“Yesterday, Ash House and the city reached a settlement that allows students to remain in their homes while ownership completes restoration,” a representative for the property’s owners told BizWest in an emailed statement Thursday. “That is the result Ash House had been seeking since last Monday, when the city pushed students out onto the streets without a plan for where they should go or when they could return. With the assurance that students can stay in their homes, ownership is eager to work quickly, and together, to resolve the city’s concerns.”   

The historic Ash House was originally built in 1923 to serve as the Sigma Alpha Epsilon fraternity house and was taken over in 1973 and converted into the Marpa House, which provided housing for members of the Shambhala community. 

Developer John Kirkland, along with a group of investors who purchased the Marpa House in 2019 for $5 million, won approval from Boulder City Council in May 2021 to transform the property into apartments for CU students despite vocal opposition from neighborhood residents. The redevelopment project finished during last school year.

The plans that Boulder officials approved three years ago allowed for 48 residents spread across 16 three-bedroom units to live at the property at any one time, according to city documents.

Boulder’s code compliance division manager Jennifer Ross testified last week that her office recently received a “complaint that there were fourth bedrooms” added to Ash House’s three-bedroom units from a tenant who noticed that their lease specified that the unit included only three bedrooms, not four. 

After an inspection on Sept. 12, city officials determined that “most units” had been modified to fourth bedrooms and several even had a fifth area that appeared intended to serve as another bedroom, she said. 

When Mueller was looped into the situation, he testified that he “was immediately concerned about the life-safety issues” presented by the room modifications.

Specifically, city officials said they were concerned about the potential for fires, given that it appeared that electrical work was performed without permits and smoke detectors were not installed in the modified bedrooms, which also appeared to lack proper ingress and egress. 

Ash House owners, in their lawsuit filed last Monday to block the closure order, said that this summer they made “improvements to thirteen units within the Property, such as extending four-foot ‘pony’ walls up to the ceiling, and adding doors to the newly partitioned area.”

The newly extended “walls were purely to partition the structure and were not load-bearing or otherwise structural,” the lawsuit said.

Because the work performed in the units was of a “limited nature,” Ash House’s owners “did not believe that it required City authorization or permitting and did not consult the City,” attorneys for the landlord wrote in the lawsuit.

Boulder officials had hoped to keep residents out of Ash House until the room modifications are removed and the property meets the specifications spelled out by the previously approved conditions, the city said. 

The parties have agreed to end the legal battle and drop the closure order if certain conditions are met.

For example, the landlord agrees to “as soon as possible, submit demolition permits, complete any required procedures and inspections, and obtain any required approvals, such as state-required asbestos procedures, to return Ash House to the condition represented by the Building Permit Plans stamped approved by the city … and in compliance with all applicable City laws.”

The city agreed to “expedite review” of the permits necessary for Ash House’s owners to perform the demolition work and to “conduct building inspections as expeditiously as possible.”

Even if the work isn’t completed by Oct. 7, the city agreed to “refrain from issuing a new order that would require vacation of Ash House so long as progress is being made toward completing the reinstatement work by the Completion Date and no immediate life-safety hazards emerge before the Completion Date,” the settlement said.

The agreement stipulates that “each Party shall bear their own costs, attorney’s fees, and other expenses incurred in connection with the Action. The Parties expressly release and disclaim any entitlement they may have to the payment of costs, attorney’s fees, or other expenses by the other Party related to the Action.”

Whether the city has the ability and appetite to pursue fines and penalties for the initial code violations remains unclear. 

“The city continues to evaluate all legal options to hold the owner accountable,” a Boulder spokesperson told BizWest in an email Thursday.