Nevada Ridge subdivision gets two-year extension of PUD

Town questioned additional security money

The developers of the Nevada Ridge subdivision in Mt. Crested Butte received a two-year extension on their plan to put homes on the property, where failing infrastructure and maintenance needs led the town to withdraw nearly $170,000 in security money in 2011.

Developer Don Perrota, alongside his partner Bruce MacIntire, told the council at a public hearing on Tuesday, April 2 the slowing economy caused them to stop their project three years ago, shortly after the roads, retaining walls and other vital infrastructure was installed.
Perrota said the Crested Butte real estate market was now “showing a pulse. “We’re prepared and excited about going forward when the market is ready for us,” he said. “It could be this summer.”
But in case it’s not, Perrota and MacIntire asked the council to grant a five-year extension of the planned unit development (PUD), allowing them to continue with the development when the market does recover, without repeating the lengthy and expensive PUD process. The current PUD will expire in August.
The PUD creates an area of project-specific zoning in town for a subdivision or project that doesn’t fit exactly with the town’s established zoning. The plan for Nevada Ridge is to build four duplexes and seven single-family homes on 11 residential lots. If the council doesn’t approve an extension to the PUD, the lots would revert to their original zoning, which allows for just one single-family home.
One of the council’s concerns about extending the PUD is having enough money held in a security deposit to pay for the ongoing maintenance of the property and any necessary repairs that may come up while the developers are waiting for the market to recover. So far the town has had to make landscape and drainage improvements, pull weeds, plant grass and make minor repairs to a retaining wall.
Community development director Carlos Velado told the council there was about $36,000 left of the original $169,000 letter of credit, but he wasn’t sure that would be enough to cover the costs of whatever may come. “The heavy lifting has been done at this point,” he said. “But in the whole grand scheme of things, $36,000 is not a whole lot.”
In 2011, the town pulled a letter of credit for the property and began using the money to finish work that was part of the Development Improvement Agreement included in the original 2006 PUD. Velado told the council Perrota had been supportive of the town’s use of the letter of credit for the work and cooperated as the town set about making repairs.
Velado said there was still work to be done on the wetlands below The Villas along Gothic Road, which requires a permit from the Army Corp of Engineers and will move forward after more testing is done, possibly this summer. Responding to a question, he told councilman Danny D’Aquila the work to the wetlands could further reduce the amount of money the town holds in the letter of credit as security.
Velado said the town had replaced some boulders that had fallen from a retaining wall on the property and D’Aquila said he was concerned about several ponds on the property that appeared not to be holding water. “Are you prepared to do what it takes?” D’Aquila asked Perrota.
In addition to the physical problems facing the developers, there were court judgments and tax liens in excess of $500,000, which Velado said had been settled and partially paid. “But [the taxes] are not current,” he said. The developer also owes about $6 million on the bank construction loan that was secured to start the project.
Perrota said the tax receipts were proof that he was determined to see the development through and resisted calls by the council to put up more money for the letter of credit. “As Carlos [Velado] pointed out, the taxes have been taken care of and the lawsuit has been settled,” Perrota said. “Those were large issues and that just shows our commitment to the project.”
Bruce MacIntire, who was brought in as a consultant shortly before the project stalled in 2010, told the council they wouldn’t be interested in building anything on the property, instead focusing their time and money on maintenance issues that had fallen by the wayside. Because the developer is active in the subdivision again and maintenance is the goal, MacIntire said he thought the $36,000 in security would be enough.
D’Aquila pointed out that the Army Corps of Engineers could require additional work to the retention ponds that aren’t holding water or elsewhere. “If the Army Corps comes back and says [the ponds] not functioning the way they were designed you’re going to spend a lot more than $36,000 to bring those up to standard. Are you prepared to do whatever it’s going to take?”
Perrota said he was prepared to pay, although he hoped any impending costs wouldn’t be huge. “If the Army Corp deems it’s not right, then we’ll make sure it is,” he said. “That’s just part of the job.”
But in his staff report on the proposal, Velado writes, “Staff recommends that while considering the extension request the council view it with the possibility of a different owner than is before you. It is a possibility that the property could soon go into foreclosure.”
The council also got a letter objecting to the PUD extension from neighboring The Summit Residential Owners Association, which claims to have incurred $4,000 in expenses “in performance work that should have been undertaken by Nevada Ridge.” The letter also asks the council to consider a PUD extension of less than five years and a security deposit of more than $36,000.
Craig Bachelor, a homeowner in The Summit subdivision said he has seen the retaining wall fall into disrepair, and debris that was left on the Nevada Ridge site. He said he took a video of water rushing down the wall. “I also feel $36,000 isn’t enough,” he said.
Town attorney Kathleen Fogo told the council they could make the additional security money a condition of their approval of the extension, but said they shouldn’t try to tie the money to the extension directly.
“Obviously these have been tough times,” Perrota said in response to a question about putting up more security. “We just cleared up the judgments and taxes and to impose further penalty when there’s still $36,000 available I really don’t think is fair. And that’s the way I look at it [as a penalty] because there’s still $36,000 and no one has submitted any kind of a budget to say there’s work that has to be done on that site. We spent $140,000 on that site in the last year and a half.”
The council voted to extend the PUD for an additional two years.
Mayor William Buck told the applicants, “We hope you’re successful.”
“So do we,” Perrota responded.