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County: Recent land purchase not tied to the Gatesco project

Land banking a $1.8 million parcel just south of Crested Butte

By Cayla Vidmar and Mark Reaman

Gunnison County officials say there is no connection between its purchase last week of 13.2 acres of land a couple miles south of Crested Butte and the 14.2-acre property known as the Corner at Brush Creek that is basically located across Highway 135 from the recently purchased property.

Gunnison County bought the parcel located on the west side of Highway 135 just north of the Riverland Industrial Park, formerly known as the Whetstone Business Park, on Friday, February 8. They paid $1.8 million. 

According to one of the previous owners, the property was not officially on the market when the owners were approached by an anonymous buyer that turned out to be the county. The owners discovered who the buyer was four days before the closing.

Board of County Commissioners chairperson Jonathan Houck said there is no current plan to develop the property and the county has not coordinated with the Corner at Brush Creek developer Gary Gates to use any portion of the land for his proposed housing development. “There were no discussions with the Gates team about this property prior to our purchase and there have been none since the purchase closed,” Houck said.

Gates said in an interview this week he had noticed the parcel for possible development and had been approached about possibly purchasing it.

Gates said he had not spoken directly with the county manager about the property but acknowledged that his team and the county had been jointly contacted by the former owner of the property in 2018, “back when the owner was reaching out to people about his land. But his price was too high.”

Gates explained that when the county planners began lowering the acceptable density on his proposal, he stopped considering that parcel as a piece that could work for him. The property owner “was emailing us, the county and maybe some others. I was exploring it as an alternative for parking and parks. But the price had to be right. I kind of dropped it when our project was reduced to 180 units in the sketch plan approval and then was still getting hammered after that,” Gates said.

Gates indicated he was always open to listening to ideas that would allow more density at his Corner at Brush Creek project so more affordable housing could be built and the project could be more financially viable.

County manager Matthew Birnie said negotiations for the Whetstone property began in October 2018 with Whetstone Business Park LLC, which is owned by John Councilman, John Nichols, and Johnny Johnson.

No dedicated use has been identified for the property by the county.

“There are no current plans to develop the property,” said Houck. “It will need to go through a LUR [Land Use Resolution] review for whatever the eventual use is, but as stated, we have no current plans to develop the property. When the time comes to consider uses, we will have a public process to examine those possibilities.”

Houck said the purchase included a well permit and 30 units of supplemental Meridian Lake water.

Birnie said the county would be making annual payments on the property. The county set up the purchase through a 20-year finance arrangement with Alpine Bank. He said a down payment of $452,647 was made and the rest of the payments will total about $100,000 per year. The county will utilize a lease-purchase arrangement and will not be obligated to make the payments every year. That was needed to avoid the state’s TABOR (Taxpayers Bill of Rights) restrictions that prohibit multi-year financing obligations by government entities without a vote of the people.

Houck said the board had no qualms using such a financing mechanism, as it is “a standard approach for local governments to acquire property.” The county did put up property it owns at 202 Georgia Ave. in Gunnison as collateral for the deal.

Houck said that while the county had the cash to purchase the land in its reserves, the board wanted to keep some of its powder dry.

“The county could draw on reserves to purchase the property outright, but given the favorable terms it makes more sense to commit to a relatively small annual payment over time and keep resources available for other needs and contingencies,” Houck explained.

According to one of the property owners, John Councilman, the property was not officially listed for sale, as the previous owners had pulled the parcel off the market two years prior to see how the Corner at Brush Creek would impact the highway situation. He said they received an offer “out of the blue” from an anonymous buyer, and they didn’t know who the buyer was until the Tuesday prior to closing. That was when county officials had to publicly vote on the transaction.

Councilman explained his ownership group offered the parcel for $2 million, and negotiated to the final purchase price of $1.8 million. Councilman says that after owning the property for 15 years, he was partial to it and didn’t want to sell, but his partners wanted to jump on the opportunity.

While the deal would seem to impact the value of the 14.3-acre Corner at Brush Creek parcel, Houck said not necessarily. “It doesn’t mean that property (Brush Creek) is worth $2 million,” he responded in answer to a question. “This parcel is unencumbered by the requirement that it must be used for housing and/or transit as the Brush Creek parcel is. The ownership structure of the Brush Creek parcel also diminishes its value. The Whetstone parcel has a bit more usable space because of the road easements and wet areas on Brush Creek. So this purchase gives an idea of the value of the Brush Creek parcel, but it does not indicate that the Brush Creek parcel is worth $2 million given its constraints.”

Houck said Matthew Birnie had had general discussions with the Brush Creek property ownership representatives (Crested Butte, Mt. Crested Butte, CBMR and Gunnison County) about the Whetstone Business Park parcel. “I believe this parcel was discussed among the Brush Creek MOA partners as an opportunity for a public entity to buy to fulfill their strategic priorities,” Houck said. “It seemed there was not interest by them and after a while, we began to consider the opportunity to secure the land for future needs. No specific conversation about the county buying it occurred.”

The mayors and town managers of Crested Butte and Mt. Crested Butte said they had no inkling of the potential county purchase. They found out about the deal late last week.

Houck says land banking for the future is always a good move but the county does not have any similar purchases on its radar. North valley county commissioner Roland Mason added, “The needs of the public will ultimately determine what ends up on that property.”

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