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Timeshare ordinance delayed to August

Looks like Bernholtz gets to break the tie

Due to what obviously would have been a three-to-three tie vote, the Crested Butte Town Council postponed its decision on the proposed ordinance dealing with “timeshare” developments in town.

 

 
After more than hour of discussion at a public hearing Monday night, mayor pro tem Leah Williams asked that the hearing be continued to August 18, when a full complement of council members will be at the table to vote on the ordinance.
Mayor Alan Bernholtz was not at the meeting on Monday, July 21.
After more than eight months of discussion, the council is split over one primary issue in the extensive 31-page ordinance: That issue is whether to mandate that a percentage of rooms be available for rent at all times of the year.
Under the proposed ordinance presented to the council by town attorney John Belkin and Crested Butte building and zoning director Bob Gillie, any rooms not being used by owners would be required to be put into a public rental pool.
That’s not good enough for council members Dan Escalante, Billy Rankin and Reed Betz. They want to mandate that a certain percentage of the rooms (somewhere between 15 percent and 25 percent) are always available to be rented by the general public, much like a hotel.
Council members Leah Williams, Skip Berkshire and Kimberly Metsch felt the current proposal would accomplish that goal and provide for public room rentals most of the time, without requiring a mandatory percentage.
“We have come a long way with this ordinance and at the end of the day we have a good regulatory tool to manage the impact of these fractional ownership projects,” Belkin told the council.
The ordinance was crafted with the help of developers from the Sixth Street Station project. That fractional ownership development would include an approximately 40,000-square-foot building with 21 luxury suites, which essentially include 47 “lock-off” rooms. If approved, the Sixth Street Station would be located on the north side of Crested Butte and would also include retail spaces and underground parking.
Gillie reminded the council the ordinance would be applied to more than the Sixth Street Station project. There are other potential spots in town that could lend themselves to fractional ownership and come forward with a timeshare proposal.
“Your help has been a mixed blessing,” commented Rankin to the proponents. “Thanks… but I have to say that when you aren’t here my thinking is more clear. When we started, we all used the word ‘hotel’ and we seem to be veering away from that. This ordinance is for the entire T and B-2 zones, not just the Sixth Street Station. We need a hotel and I think this ordinance needs a public percentage rental piece to it.”
Councilmember Berkshire took another view. “I agree with Billy that it was a little strange to have the Sixth Street proponents’ help, but I think it is a good model of collaboration,” he said. “It has been painful but helpful. I too think it would be great to have a pure hotel in this town, but with the real estate market where it is right now, everyone says no one will do it. I would rather have half a loaf than no bread at all… If we put a mandatory number on it, it may kill the goose. The requirement in the ordinance gets us to where we want to go.”
Betz was also grateful for the help. “Thanks to Sixth Street for being part of this,” he said. “But Billy hit the nail on the head for me. As an ordinance for future projects in town, it is reassuring for me in having a number and I don’t know how we come up with that specific number. But I would like a guarantee of public usage. We can at least try to do what we can to guarantee public use.”
Escalante said he knew there would be plenty of rental rooms available in May but wanted some rooms available in July and during Christmas week. “I want it to have a public feel more than a private club,” he commented.
Metsch said the ordinance addresses the idea of a hotel in town. “This ordinance allows a hotel feel,” she said. “I don’t know if a mandated percentage is necessary. I fear putting a percentage in this could result in unintended consequences. Could we have some empty beds because we didn’t allow an owner to come during what we think would be a busy week?”
Williams sided with Metsch. “This ordinance will result in a lot of elements like a hotel. There will be a front desk and public use,” she said. “We need this ordinance to protect the character of the town. Crested Butte is a hybrid in the sense it is not strictly a resort community and I agree with Kimberly that mandating a percentage of the rooms to always be available for rentals might not be the right answer. With six of us here, we appear to be perfectly balanced. So I would like to continue the public hearing.”
The council did eventually continue the hearing but not before a lot more discussion. Stan Cope, consultant for the Sixth Street Station project, informed the council that requiring a percentage of rooms to be rented could get any timeshare project in trouble with the Securities and Exchange Commission, which “are not people you mess with.” Cope said he would have no idea how to write a business plan with the council’s requirement in it.
“I want to paint a picture,” Cope smoothly told the council. “I think any occupancy is good occupancy. In my experience these type of owners become more than hotel guests. They care and eventually become really involved in the community.”
Cope, who runs a fractional ownership project in the Vail Valley, gave kudos to the council and staff for the ordinance. “With the structure of this ordinance it is the most technically complete I’ve ever seen. You have a great ordinance here,” he said.
He pointed out that the Vail Mountain Lodge typically has about a third of the rooms empty during any given week, and even during Christmas some owners give up their units for rental income.
“That’s a lot higher than the percentages you are talking about,” he said. “With the mandatory requirement I would be concerned with the SEC and I would be concerned with banks loaning us money. I’m concerned the project wouldn’t be very marketable. I don’t think we would go down that road with Sixth Street.”
Rankin supported delaying the vote until August to give the ordinance more thought. “Of course we’ll get scrutinized but I don’t care about that,” Rankin said. “This is a new animal. It is smart to err on the cautious side. We should take our time. We are asking business plan questions here and I don’t care about that. We are a government.”
However, Rankin supported the Sixth Street Station. “I like the Sixth Street Station project and want to see it happen. But I don’t think we should have a bunch of timeshares in town. Norton can write 20 Notions about us. I don’t care. I’m thinking of what’s best for the town, and maybe timeshares aren’t appropriate for the town of Crested Butte. If we can’t get closer to a hotel, maybe we don’t want it.”
Williams disagreed. “I think we have to write an ordinance that works for the town and the businesses.”
Berkshire pointed out the ordinance isn’t exactly light and easy. “I think we are being very conservative,” he said. “Our attorney says it is a cutting-edge ordinance. We have to deal with this sooner or later. We have to plow over this ground at some point and I think we are real close.”
How close the town is should be known at the August 18 meeting, when all seven council members are expected to be in attendance to vote on the ordinance.

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