Releases some credit
When developer Dick Landy walked into a meeting with the Board of Gunnison County Commissioners on Tuesday, September 2, the future of a $3.2 million letter of credit being held by the county was uncertain. By the time he walked out, some of the uncertainty remained, but the line of credit being held had been cut nearly in half.
In all, three letters of credit had been issued by Bank of the West to Landy totaling an amount that would be sufficient to fund the completion of the projects in the subdivision, if it became necessary for the county to do so.
For completing some major parts of the infrastructural repairs that were required of him in a Development Improvement Agreement (DIA) laid out by the county in July, Landy was rewarded with the release of more than $1.5 million from a line of credit being held as sort of a security deposit against work that had not been completed in the subdivision.
The county commissioners also agreed to extend the time Landy has to build two more required buildings in Stallion Park, an affordable housing development.
“Given the economics of the world currently, it doesn’t make a lot of sense to build those affordable units now. Market intelligence says ‘Don’t build them—they might not sell and we don’t want to flood the market,’” said county attorney David Baumgarten.
The county will still require that the units be built (while taking into account that they probably would not be built this year) because the additional buildings in Stallion Park were part of the original agreement.
In order to allow more time for the affordable housing units to be built, Landy must make arrangements with Bank of the West to have $1.2 million in letters of credit extended before October 31.
With that time extension, Landy is also hoping to get a reformulation of the income limitations, or Annual Median Income (AMI), for potential buyers who would be eligible to buy housing in Stallion Park. Landy told the commissioners that he has had to turn away people looking to buy because they earned a little too much money to qualify.
“I’m not trying to sell these affordable units for more to make a profit, but we’re running into a situation where people want to buy out there and we checked and they’re 105 percent [of AMI] so they can’t buy,” said Landy. “Our intention is to have this as a total ownership project but we’re losing people because we’re too restrictive in terms of the AMI.”
Commissioner Paula Swenson said she wanted an analysis of the community’s needs before she would consider raising the requirements of the AMI for potential buyers in Stallion Park.
“Personally I don’t have a problem with looking at some variations with the AMI. But before I would consider a proposal I would want to see some serious thought put into this, like costs, where you think people could qualify at. I have not seen a rationale for adjusting the AMI.”
With regard to getting the additional buildings built in Stallion Park, Landy said releasing more of the money being held would create the capital needed to build the units.
But Baumgarten said that’s not how it works. The county requires the line of credit, or other deposit, equal to 125 percent of the cost of a project. With that, the county could potentially redo an entire project with a financial cushion, in the event of a complete failure.
Until all of the requirements of the DIA for the subdivision have been met, the county will retain at least 25 percent of the full security amount, which is a standard for every development or major project approved by the county.
Since Landy, a retired Denver-area dentist, incorporated the 280 acres south of Crested Butte in 1998, the subdivision has had problems with a frozen water main, areas of poor drainage, unrealized amenities and lagging road maintenance.
And with many of those issues addressed, Landy is left to deal with some of the less immediate requirements of the DIA, like the development of a ball field.
Landy says that some of the items that have been addressed from the DIA will take time to prove, like the reclamation of common space in the development. There will be little to show from that effort until regular spraying has eliminated the weeds that had popped up in disturbed areas. There is also an issue with wetland mitigation that has been addressed but is waiting for an official signature before it will be taken off the list.
“Everything is pretty much done. There is a little bit of settling Lakeridge Drive but we’re keeping an eye on it. The other day I drove through and there is a pot hole here and pot hole there that we’ll take care of,” said Landy, adding that one area of road got three layers of chip-seal resurfacing to ensure durability.
Some of the issues that still need to be resolved are the development of a ball field, which is a formal requirement of the agreement and would need an amendment if the plans for that amenity were to change. There is also a need for continued work to the stormwater facilities.
All of the items in the DIA have to be complete by the October 31 deadline or be addressed through an amendment to the DIA or other arrangement with the county before more of the letter of credit is released.