“It’s not clear what the requirements are”
by Alissa Johnson
The old Marcellina Apartments, condemned due to water damage in 2014, are getting a facelift. Denver-based development company GO CB LLC is bringing the building back to life as a condo development, with the help of local building company Coburn Development and local design company KPD Studios.
Called the Timbers, the project is currently in demolition phase, but Mt. Crested Butte town staff are making sure employee housing expectations are clear. The Marcellina Apartments had seven units designated as employee housing, and the new building will have the same—but what that can look like isn’t well defined in the current covenant.
At an April 7 Town Council meeting, town manager Joe Fitzpatrick and town attorney Kathy Fogo informed the council that the restrictive covenant in place, which outlines employee housing requirements, leaves a bit to be desired.
The covenant was written prior to the adoption of current housing guidelines, and Fitzpatrick explained, “It was written rather loosely, and it’s not clear what the requirements are to qualify for employee housing and what happens if the units are sold.”
According to Fogo, the developer is committed to meeting employee housing requirements but would like the flexibility to sell all the units in the building. “They’re trying to come up with a way to meet the intent of the document but make the project viable,” Fogo said.
Fogo and Fitzpatrick asked the council for input into the covenant itself based on some ideas from the developer. Would the council consider alternative arrangements, such as selling the units to a corporation like Crested Butte Mountain Resort (CBMR), which could in turn rent to employees?
“What we’re looking at is trying to clean up and finish filling in the blanks of how to enforce the covenant and what the requirements are to qualify for those seven units,” Fitzpatrick said.
“I can see the benefit of going to someone like CBMR and having them manage a unit as a rental, but I don’t know how you end up doing that in the document without a major rewrite,” said mayor David Clayton.
Fogo agreed there were a lot of details to figure out, even if the units were sold to qualified individuals. “There are so many holes. If someone is an employee in Gunnison County and purchases because they qualify, and then ceases to be an employee in Gunnison County, then technically they have to sell the unit… And someone has to be able to manage and enforce the requirements.”
“I would think the developer would seek a local management company to manage [the units] as rentals,” said Councilmember Danny D’Aquila, who felt the developer would have known what it was getting into.
“And we could hold them to that, but we might not want to,” responded Clayton.
“There are examples within town from historic employee housing where an HOA owns and controls the unit in their project,” said Fitzpatrick, noting that could be one way for the developer to let go of the management of the units.
“But they wouldn’t be able to sell the units, which is the goal,” said Fogo, noting that the developer has been cooperative throughout discussions. She also pointed out that the council didn’t need to change the covenant. “But that leaves a lot of room for interpretation as to what’s supposed to happen,” Fogo said.
“I don’t think that would be a benefit to anyone,” Clayton responded.
Councilmember Todd Barnes said that depending on price, he could see local companies purchasing the units for their employees to rent. Councilmember Danny D’Aquila said he was in favor of having an HOA manage the units, but felt that above all it was important to preserve employee housing.
In the end, the council directed staff to update language in the document, allowing corporations to own the units and putting requirements in place for renters and/or individual owners to ensure they met salary requirements and earned the majority of their income in Gunnison County.
“I want to see something in there that ties it down. What is in there is not acceptable, it’s too loose,” Clayton said. “I agree with Danny that we want to make sure we preserve as best we can employee housing and rental housing. That’s a big need.”
Corey Dawn, real estate agent for the Timbers project, confirmed to the Crested Butte News, “We have asked the town to allow us to move five of the deed-restricted units from basement mountain-facing location to the first floor west-facing locations. Two deed-restricted units on each end of the basement will remain in their current locations.”
Calls to the develper were not returned but the developer has also asked for the town to allow the units to be purchased by investors who can then rent to employees or sell to qualified locals as primary residences. According to Fitzpatrick, town staff aim to bring a revised covenant to the council for review in May.