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Council talks about how to spend ADU lawsuit settlement money

Short-term versus long-range priorities

by Mark Reaman

Discussions have begun with the Crested Butte Town Council on what to do with the $550,000 obtained through the Accessory Dwelling Unit (ADU) lawsuit settlement between the town and two property owners. John Kiltz and Christopher Mize agreed to pay the town $275,000 each to be released from ADU deed restrictions. While that money is earmarked for affordable housing, no specific use has been determined.

At a January 22 work session, Crested Butte community development director Michael Yerman reviewed potential uses for the money with the council. Yerman presented eight ideas to the board including: using the funds to purchase a free market condominium; allocating the money to purchasing deed restrictions on current free market units; purchasing an additional unit in the upcoming Paradise Park affordable housing development to be used for a town employee rental; purchasing some vacant land to be used for future housing; putting the money toward cleanup of the old dump in the upcoming annexation north of town where housing could be sited; using if for down payment assistance for locals; buying down the purchase prices of the units the town has agreed to buy from Paradise Park developer Bywater LLC; or saving the funds to help “seed the next affordable housing build in 2022.”

Yerman said the town staff wanted to “hammer home” the long-range goals for affordable housing in town. “I think you would be challenged to balance the short-term goal of using these funds quickly to have an immediate impact with the long-term goals of town,” said Yerman in regard to the town’s mission statement of ensuring the community’s residents are successful in attaining long-term safe and energy-efficient housing.

The other long-range goals are to: have 75 percent of the town’s residential units occupied by year-round residents; have 30 percent of the town housing stock be deed restricted; look for partnerships to build rental projects; obtain 15 units for town employees; and work on regional collaboration for future housing projects.

In a memo to the council Yerman pointed out, “Affordable housing projects take a minimum of three years to plan, approve and build. So immediate use of the funds may result in one or two new units, whereas proactive planning could result in another large project that could add numerous units to our inventory.”

Crested Butte mayor Jim Schmidt said he still had questions about the program in Vail, where the town purchased deed restrictions on free market units. He said several people had questioned him about why people would do that and he wanted more information on the program.

Town manager Dara MacDonald said she would invite representatives from Vail to come over and shed light on the project. Yerman said such a program wouldn’t come online until 2020 at the earliest but gathering information was always a good idea.

“I like all of these ideas,” said councilman Kent Cowherd. “I see the value in all of them but I think it’s important to replace at least one of those two units pretty quickly.”

“If a town goal is to have 15 employee units, then buying a couple more from Bywater appeals to me,” said Schmidt. “But I agree with Kent that these are all good ideas.”

“I think land banking for future projects should be a huge priority for us as well,” added Cowherd.

Yerman indicated there was potential land available that could work for future affordable housing projects and the staff could go over such options in a closed-door executive session with the council. Schmidt agreed that would be a good move and such an executive session was held February 4.

No definitive decision was made, so the council will continue to discuss how best to use that windfall of $550,000.

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