Rules for fractional ownership still being debated

Sixth Street Station before BOZAR

The Crested Butte Town Council appears to be warming slightly to the concept of fractional ownership in town—and to one project in particular—as it continues to work through a proposed ordinance that will regulate it.

 

 

Developers of Sixth Street Station appeared before the Town Council earlier this month to appeal to the council to move the process ahead.
“We really need this fractional ordinance to move forward,” explained Gary Hartman of Sunlit Architecture, which is part of the development team. “We can’t continue to throw money at this unless we have a good warm and fuzzy [feeling] that this will become real.”
The town has been considering adopting timeshare and fractional ownership regulations since developers came forward with Sixth Street Station, a timeshare development proposed on 20 vacant B-2-zoned lots formerly owned by the Kapushion family, between Gothic and Butte Avenues on Sixth Street. The development team includes Bob Brotherton, Watson Advisors (Ron Watson and Pat Montgomery) and Sunlit Architecture.
Developers have pitched the project as an approximately 40,000-square-foot hotel with 21 luxury suites on four town blocks. Developers say the project would have full-service, professional hotel management, a concierge service, a spa, and underground parking.
The developers have submitted their plans to the town’s Board of Zoning and Architectural Review (BOZAR) and are working with the town on timeshare-fractional ownership regulations.
In its initial discussions, the Town Council had been leaning toward heavier regulations due to its desire to guarantee that some of the timeshare units will be available to the public—and not rely on owners renting out their unused units, as other cities do. The Town Council wanted to ensure that sales-tax generating rooms were available during “high” seasons.
During its meeting on April 7, the Town Council seemed to back away from that idea after hearing from Sixth Street Station developers, who were at the meeting with more details on their project and fractional ownership.
Hartman started off the discussion, explaining that they were planning a mix of residential, office and retail spaces with open green spaces and a centrally located interactive fountain for children. There are 10 to 15 commercial retail spaces planned that would provide excellent places for new businesses to start, Hartman said. In addition, each fractional unit would have 10 owners—introducing 210 new owners into the community, Hartman said.
Parking for the project would be mostly underground, with 108 places planned. In addition, Hartman said, there are 38 surface parking spaces included for easy access into the businesses.
Fractional ownership expert Stan Cope, who owns Gemini Resorts Management in Vail and would manage Sixth Street Station, explained to the Town Council that each fractional suite would have “lock-off” bedrooms, meaning that a three-bedroom unit could be divided and rented to three different groups. The purpose of the concept is to encourage occupancy. “Any occupancy is good occupancy,” he said.
Cope explained briefly how the fractional ownership program may work for owners—and cautioned that the company couldn’t force owners to rent out their units. However, he said, most of them would probably choose to do so. “Generally, they’ll use two weeks and put the third (week) in the rental program,” Cope said. He noted that the facility will have a front desk and will take walk-in customers, similar to a hotel.
Town Council member Billy Rankin said he was worried about people buying the properties and allowing them to sit empty instead of putting them in the rental pool.
Cope said he felt most owners would enter the rental pool. “If you’re not making money, it’s not an investment,” he said. “Why wouldn’t they want to rent it?” He also added that the resort would set its prices competitively to attract occupancy.
Crested Butte Town Council member Reed Betz asked what the rates would be and what the target market would be for the facility.
Cope said developers would be targeting households in the $100,000 to $200,000 income range.
Crested Butte mayor Alan Bernholtz asked if the market was asking for more high-end properties in town. Cope believed that was true. Hartman also noted that the project would help invigorate the business district near the Gas Café.
With mandating public use in fractional ownership seemingly off the table, Town Council member Leah Williams asked if there was a way to monitor the resort’s usage once built.
Crested Butte building and zoning director Bob Gillie concluded the discussion by suggesting that town staff work on an ordinance that would introduce a new zoning classification for timeshare and fractional ownership. The ordinance will be introduced during the Town Council’s meeting on May 5 and may be up for public hearing on May 19 or June 2, depending on how the Town Council feels about the ordinance.
In the meantime, Sixth Street Station is proceeding through the Board of Zoning and Architectural Review process. Due to its large nature, it will be considered as a planned unit development. The project will be up for conceptual design review on Tuesday, May 13 during which the public is encouraged to attend and ask questions.

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