The Crested Butte News Serving the Gunnison Valley since 1999
“I think this is a much better system for everybody”
In response to some concerns about what might have been a doubling in the cost of building permits in Mt. Crested Butte, Carlos Velado community development coordinator, proposed a new way of calculating how much of a deposit the town should require from developers to avoid being stuck with unfinished projects.
The council asked Velado to revisit the clean-up deposit that was adopted earlier this year as part of the 2009 International Building Code, which amounted to 8 percent. “We got some glaring numbers there when we did valuations for two-plus-million-dollars. Naturally you’re going to get some pushback there,” Velado said.
To make the deposit easier to cover, without compromising the town’s protection, Velado proposed changing the deposit to 3 percent for projects valued up to $1 million, 2 percent for projects up to $3 million and then 1.5 percent for projects valued at $5 million and above.
That deposit would pay for the cost of finishing the exterior of a building or removing a foundation should the owner walk away prematurely. It’s one of four measures that were adopted recently to give the town protection from having to pay to clean up someone else’s mess.
The clean-up is paid for through the deposit, along with the use tax ordinance adopted by the council. The other changes adjust how building permits can be pulled by contractors. After recent trouble with foundations left unfinished in the Wildhorse Subdivision, the town stopped issuing both excavation and foundations permits before the building permits have been paid for.
“The use tax ordinance did a lot to correct for this. In the analysis I’ve done, we were underestimating the value of properties sometimes by 50 percent,” he said. “Of course when that valuation goes up the amount of the deposit goes up.”
However, with even a 2 percent deposit being required for all projects, the cost became excessive—even prohibitive—on the most expensive homes. At the same time, Valdo found that the actual cost of cleaning up a project wouldn’t rise proportionally as the price went up.
So, he suggested, the percentage people pay for the clean-up deposit should drop as the value of the project goes up. Now, instead of being $100,000, the cleanup deposit for your $5 million home is just $50,000.
But under the new calculations, the clean-up deposit would also cost $50,000 for a $2 million home and something less for everything in between. “So it’s not a perfectly sliding scale,” Councilman Dave Clayton pointed out.
Several councilmembers suggested the percentages should be adjusted to make the scale on which clean-up deposits are based slide evenly upward, without becoming excessive.
“Another assumption that I’m making here is that … we’re going to find these higher valuations in the single family homes that we’re already seeing now,” Velado said. “So I think we’re going to be dealing with houses in the realm of $1 million or more.”
He thought they could expect to see homes larger than the 3,300 and 3,900-square-foot homes being planned for the open foundations at the Wildhorse Subdivision, which instigated many of the recent changes to the way deposits are calculated. “Potentially we could see homes larger than that getting built in zoned single family home areas. So it’s kind of uncharted territory for us in valuations.”
Velado also asked that the council add language to the ordinance granting the community development department power to require additional money for the deposit if they feel the formula isn’t working out.
Councilman David O’Reilly said he wouldn’t have a problem doing that as long as Town Manager Joe Fitzpatrick was involved in the decision. Additionally, with two projects expected to start this fall in Mt. Crested Butte, Councilman Gary Keiser suggested the council make any changes retroactive, so those projects in the review process would pay deposits based on the new, reduced rates.
Finally the Town Council gave Velado enough to go back to work on an amendment to the building code ordinance, which he hoped to have back to the council for review sometime in September.
“I think this is a much better system for everybody,” he said.
