Time-share ordinance goes to BOZAR for additional review

Will time-shares bring “hot beds” to town?

While understanding the current economic reality that a typical hotel-type project isn’t likely any time soon for Crested Butte, the Town Council has sent its proposed time-share ordinance to the Board of Zoning and Architectural Review (BOZAR) for review and comment.

The ordinance would regulate the development and use of “time-share” properties in the town and, under the current proposal, would require that units not being used by owners be put into the rental pool for the general public.
The ordinance was spurred by the proposed Sixth Street Station project, a 47-room time-share development to be located on the north side of town.
“In this market we aren’t going to get someone to come in and build a hotel in town,” said council member Skip Berkshire at the Town Council’s regular meeting on May 19. “But this project gives us hot beds. It is a compromise solution to get rentals in town. I don’t want to hamstring the developers. I don’t think we have to mandate they rent the units but I don’t know why they wouldn’t when the opportunity was there to bring in some money.”
Mayor pro tem Leah Williams said, “I don’t want to necessarily require that they have to put their rooms on the open market but I agree that it makes sense they would put it in the rental pool when it’s not being used.”
But town attorney John Belkin said tight regulation over such projects is probably a good thing for Crested Butte. He said he has had lengthy discussions with an attorney in Telluride who has dealt with many such fractional ownership projects and the prognosis, according to the Telluride attorney, is shaky at best.
“A lot of the time-share projects over there are a mess and are apparently unraveling. I think this proposed ordinance is a good one and regulates something the town should be concerned with,” Belkin said. “As for the rental pool aspect, to me that is a big part of the deal. A year ago the council was adamant that we needed hot beds and meeting spaces. Is that still important?”
Negotiations between the town staff and the Sixth Street Station developers have been on-going for months. Crested Butte building and zoning director Bob Gillie said, “The middle ground in our talks with the project developers was that if the rooms weren’t being used, they would be put in the rental pool. Frankly we just don’t know how it will work. We do know that when the owners are in there, the town won’t get any sales tax from their room stay—while if it is rented, the town would garner money through the room rental.”
Gary Hartman of Sunlit Architecture, a partner in the Sixth Street Station, said the development team feels like the mandatory requirement to put rooms into the general rental pool is something the developers could probably live with.
“We feel we’ve made a lot of progress with the town and we feel comfortable going to BOZAR and continuing the process,” Hartman said. “We still have some minor things we feel need to be negotiated, but overall we feel good.”
Developers have pitched the project as an approximately 40,000-square-foot hotel with 21 luxury suites (which essentially include 47 “lock-off” rooms) on four town blocks. Each suite would have 10 owners. Developers say the project would also have full-service, professional hotel management, a concierge service, a spa, and more than 100 underground parking spaces.
At a previous council meeting, fractional ownership expert Stan Cope, who owns Gemini Resorts Management in Vail, explained how the fractional ownership program might work for owners. “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.
Hartman did express concern over some of the harsh penalties in the ordinance and asked for clarification of what triggers the penalties. “We just want it to be in line with what governs other rental properties in town,” he said.
The council decided to include the mandatory rental language in the ordinance and send it to BOZAR for comment. The proposal also limits as a matter of right the amount of time an individual owner can stay in the unit to 30 days a year and requires time-share projects to include meeting space in the development.
The measure is expected to be back in front of the council sometime in July.