The Business Journal asked leaders in Pagosa Springs, Colorado what they predicted to be the most important event, development or happening, or what they hoped to see happen in 2006 in Pagosa Springs. Their responses are listed below.

“When we look back on 2006, in 5, 10, 25 years, what will stand out will be the emergence of a collaboration of Town and County governments, businesses, nonprofits, and individual people to create a sustainable vision for our community.”

Michael Whiting, Director
Southwest Land Alliance

“My first prediction is that Leslie Tottenhoff and I will marry on January 7, 2006. Parelli will start construction on our new corporate headquarters in Aspen Village. Parelli Natural Horsemanship University, a public education nonprofit foundation will launch in the fall of 2006. Seeds of learning will break ground on their new facility. Funding will become available to study the creation of a cultural arts center in the down town area. The Mankind project will hold an informational presentation meeting on January 7 that will change how all men and women will relate to each other and the rest of the world. Land conservation in our county will become a required portion of every land development request made to Town and County Officials. Town and County officials will adopt development impact fees that will support the infrastructure costs that development creates. The number of American troops in Iraq will be reduced by one-half and the seeds of democracy will flourish.”

Mark Weiler, President
Parelli Natural Horsemanship

“I hope to see a strong market and business arena for 2006. The tourist sector of the business economy will be fueled by numerous events this year starting mid-June and going strong until mid-September. I hope to see a lot of community involvement with all of the activities planned. With the addition of a music festival, bike tour, and all events having either a face-lift or new concept, I hope that the community will see new opportunities to get involved and experience the fun of Pagosa.

In addition to the visitor side of the business, the Chamber is planning more business seminars and several new and timely ways to disseminate information to our members. We plan to be a stronger business resource for our members and to create lots of events and opportunities on our own and with other organizations to make the whole year memorable.”

Mary Jo Coulehan, Director
Pagosa Springs Chamber of Commerce

“Adoption of the comprehensive plan and the downtown master plan will be the most important accomplishments for Pagosa Springs in 2006. Pagosa will continue to become more visible on the national radar screen.”

David J. Brown, Developer, Philanthropist, community member
Bootjack Ranch

“I hope to see continued growth and success for all of our students in the schools. We are proud of our teachers and especially proud of what they have accomplished over the last year. I predict there will be many exciting adventures for our students in 20006 and encourage parent to join us in this journey.”

Duane Noggle, Superintendent
Archuleta 50 Joint School District

PASOGSA SPRINGS — In a recent meeting with Town Manager Mark Garcia and Town Planner Tamra Allen, an unidentified developer outlined plans to build a commercial center with a 250,000-square-foot retail space along with a strip component of 272,000 square feet on a 60-acre parcel south of U.S. Highway 160 across from the Pagosa Country Center and Westside City Market.

On Dec. 6, the town council quickly and unanimously ratified Ordinance 656, an emergency ordinance temporarily suspending the processing of applications for large retail developments. This ordinance expires June 15, 2006.

“This ordinance recognizes and enacts the previously expired big box ordinance,” Garcia said to council and dozens of community members packed into the chambers.
The previous ordinance expired Aug. 3, when council and the community Big Box Task Force failed to find an acceptable compromise on the issue.

“Since our attempt to pass a mid-box size cap ordinance failed, there have been two scheduled meetings between council and the task force and both have been cancelled,” Garcia said. “However, council and the Big Box Task Force have agreed that there should be some design criteria and they agreed to size caps in the downtown area, but there has been no size cap agreement for the remainder of the community.”

Garcia said the town was working with the county to find out where they were on this issue. County Planner Blair Leist and County Commissioners Robin Schiro and Ronnie Zaday were all present at the council meeting. Zaday acknowledged that the county moratorium has also expired, but that the county is willing to work with the town on this issue.

“The county supports planning cooperation,” Leist added.

Garcia pointed out that design criteria work is underway as part of the downtown master plan and suggested that the town may be able to expand the scope to include big box retail. Allen agreed and said it was “definitely possible,” to ask consultant Winter and Company to work on this.

Garcia said that town staff felt it was important to execute a temporary moratorium to give the town the time it needs to complete various planning projects including the master plan and comprehensive plan, which have targeted completion dates of April 2006. It will also allow the town to prepare through its Land Use Code, the regulations of which currently do not adequately address the impacts of such development. The town wants to also consider implementing impact fees and to complete the unfinished business with the big box task force.

Angela Atkinson, chair of the big box task force, agreed that the moratorium would allow the task force to complete its work to provide recommendations to the council concerning future legislation. The earlier efforts failed when council members questioned some of the task force’s data and expressed concern about square footage size caps.

“I hope that council and the task force can come to an agreement on research methodology,” Atkinson said.

In other business, the council was updated on the lodgers’ tax and informed that the state will not collect the additional 3 percent tax and that the town will have to establish their own means of tax collection. Garcia asked for permission to begin establishing a tourism committee that will provide input on how the funds will be spent. Council also approved the addition of $47,000 to the 2006 budget to fund a detailed transportation plan that will include an evaluation of parking accumulation and occupancy, and provide a short, mid and long-term plan for parking and transportation options. The same person providing the preliminary evaluation for the comprehensive plan will complete the plan, and Tamra Allen said they were confident the detailed transportation plan would be completed on the same schedule as the comprehensive plan.

“I can’t think of anything more important,” council member Darrel Cotton said.

PAGOSA SPRINGS – Ask most people how many options they have for selling property and they will say two: List it with a real estate agent or try to sell it “by owner.” But a third option is on the rise. The number of real estate auctions in 2005 was 15 percent higher than the number in 2004.

The National Association of Realtors predicts that by 2008, one in three properties will be sold at auction. Most real estate auctions today are not foreclosure or distress situations; rather they are the result of a seller choosing a cost-effective, accelerated method to sell a property at a true market value. Auctions are win-win situations where sellers obtain immediate cash and buyers purchase properties for a price determined by open, competitive bidding.

The Four Corners is home to a master franchiser for the only franchised real estate company in the world, Pacific Auction Exchange. PAX Auction Option, LLC is one of 33 franchises nationwide and was recently named “Franchise of the Year 2005,” by their parent company in California. Auction Option LLC is owned and operated by Aristotle and Janelle Karas and is based in Pagosa Springs.

In addition to “Franchise of the Year,” the company placed first and second in the “Highest Auction Price” category. They sold a property in Kailua Beach, Hawaii, for $14,630,000 and the Ptarmigan Ranch in Durango for $1,078,000. The Karas’ were also awarded the prize for “Most Number of Auctions.” They hosted 20 auctions in 2005.

“For me,” Janell Karas, franchise director, said, “the number one thing is that we are pioneers in this industry. We can offer someone a different way of doing (real estate).”

Karas outlined for The Business Journal what she called “a totally streamlined way of taking a property and getting it sold.”

PAX meets with a seller. “As long as the seller doesn’t have crazy expectations, it’s usually a good fit. If they say ‘I have to have my property sold in two months,’ or ‘I just want to get rid of it,’ then they are probably a good candidate.”

According to the National Association of Realtors, a good auction situation is one where the seller needs immediate cash, has a partnership or marriage break-up, is moving out of state, wants to liquidate an estate, is retiring, is auction minded, has a listing that is about to expire, has already purchased another house, knows the auction will bring a fair market price, has financial problems, or has high carrying costs on the property.

In a real estate auction, there isn’t a traditional market evaluation or appraisal. The buyer doesn’t name a price and hope that someone will pay that amount. In an auction, “The auction broker gets all the buyers together and we see what the market will bear,” Karas explained. “Every property is unique. I don’t know if the property is desirable. We don’t do a ‘per square foot’ price analysis. It is what it is.”

What the auction company does is market the property to attract potential buyers. In the case of Kailua property, marketing was done via an elegant brochure and DVD, Web sites and a network of other real estate auction brokers. The Kailua property was ideal for auction because it was unique and, because if its uniqueness, difficult to appraise. The builder had high carrying costs for keeping the property and wanted to create an urgency and excitement about the property similar to that surrounding a Picasso at a Christi’s auction.

A good auction property is one that: has a lot of equity (25 percent or more), is unique and there is enough interest to encourage competition, has high carrying costs for the owner, is vacant, or is difficult to appraise.

The seller can choose from three types of auctions. An Absolute Auction means the property is sold to the highest bidder, regardless of the price. This form of auction generates the most response from the marketplace. A Minimum Bid Auction means a minimum price is set and announced and publicized up front. This reduces the risk for the seller, as the sales price must be above a minimum acceptable level. A Reserve Auction means that the highest bid is an offer, not a sale. A minimum bid is not published and the seller reserves the right to accept or reject the highest bid within a specified time. The seller is not obligated to confirm a sale other than at a price that is entirely acceptable to them.

An auction is simple. There are no warranties (except clear title) and little chance that the sale won’t close because buyers are pre-approved. An auction contract is three pages compared to the typical 13-16-page real estate agreement. For a seller, the real estate auction broker is the only true seller’s agent. Most real estate professionals are dual agents, meaning they can represent both the buyer and the seller during a transaction.

“I really like that we are focused on one thing at a time,” Karas said. “We focus on one property for 30 days and get it sold.”

The National Association of Realtors recommends that realtors who want to get involved in auctions look for an auction company that is experienced in real estate sales. PAX, Auction Option LLC is one of three exclusive real estate auction companies in Colorado. Predictions are that sales via auction will skyrocket as realtors expand their market to increase revenues.

“There is an incredible income potential,” Karas said. “This is a low overhead business. The whole reason I wanted to become a master franchiser is that I wanted to share the opportunity.”

PAX, Auction Option LLC, has franchises in Highlands Ranch, Colo., Evergreen, Colo., Denver Tech Center, Colo., Santa Fe, and Las Vegas. They are looking to expand their team. As a franchisor the company offers an apprenticeship program, marketing support and a network of other auction companies. The opportunity is available to those without a current real estate license and Auction Option LLC provides 30, 60 and 90-day strategies for those in the process of getting their Broker’s License. The master franchiser considers their franchisees to be partners and helps out by handling some of the internal work out of their office in Pagosa Springs.

In an auction, the broker typically gets a 10 percent buyer’s premium or commission on the sale price. A PAX franchisee then pays a 6 percent royalty on their net earnings to the franchisor, except during the apprenticeship period (or first ten transactions) where the franchisee keeps 55 percent and the franchisor receives 45 percent of net. The initial investment is $25,000 and the company has an extensive application process.

“We are looking for someone who is a team player, a people person, detail oriented and energetic, a real entrepreneur,” Karas said and then added: “This will be a large segment of how people will buy and sell real estate. It’s happening. It’s growing. Now’s the time to get in with a company that’s developing their name and is on the cutting edge of this industry.”

For more information, contact Janell Karas, franchise director at Pacific Auction Exchange, Auction Option LLC at (877) 612-8494 or email her at Janell@auction-works.com. Visit their Web site at www.auction-works.com.