The Crested Butte News Serving the Gunnison Valley since 1999
Official position to be voted on December 18
By Katherine Nettles
During a work session on December 3 to discuss the potential affordable housing project at Brush Creek, Mt. Crested Butte Town Council members arrived at a consensus regarding the council’s majority position for the proposed housing development. A document will be drafted to reflect this semi-official position, and then voted on for approval at the council’s December 18 meeting.
If the document is approved by the council as expected, the town plans to present Crested Butte with it in order to prepare for a joint work session between both councils. The joint session is intended to form a unified position from both Mt. Crested Butte and Crested Butte. As part of the process, at least three of the current stakeholders in the land (Crested Butte, Mt. Crested Butte, Gunnison County and Crested Butte Mountain Resort) must agree to conditions before the sketch plan can move into the county preliminary plan phase.
The process of getting to a majority consensus has taken several months of meetings, as people with different opinions grappled with the various aspects of the sketch plan approved by the county. Gunnison County provided 41 conditions for its approval, and Mt. Crested Butte has considered what, if any conditions, it might also like to see.
The most recent work session lasted more than two hours and revisited many of the most contentious issues for the council members. It ended with a straw poll by town attorney Kathleen Fogo, and four main conditions agreed upon: that two parking spaces be required per unit; that five acres be set aside for intercept parking and other possible uses; that a maximum number of 156 units be built on the property; and that all units be offered for rent only.
Although not all four points were reached unanimously, they signaled the readiness of the council members to move the process forward, even with the possibility of more compromise with the Crested Butte council.
Council member and mayor pro tem Lauren Daniel opened the work session by saying, “My goal for this meeting is to put forward a position that we can put in writing.”
The council proceeded to tackle issues of parking space needs, housing density, applicant trustworthiness, pro forma requirements, and the preliminary plan stage.
The group discussed what four or five acres would afford for an intercept parking lot and transit building. If one acre was used for a building, then approximately 330 spaces could be created, with snow storage factored, by various estimations.
Council member Janet Farmer maintained her preference for more housing units, such as the 180 used as a maximum from the county Planning Commission, but wanted a minimum of 150. She reasoned that the developer, Gatesco Inc. would gross less than $200,000 in rent per month at 180 units, and needed to pay maintenance costs, staff, and loans on the project. The appeal of continuing with the development could be at risk with fewer units, she said. “The more we cut him down, the more difficult it’s going to make for this project to happen.”
Council member Dwayne Lehnertz acknowledged that he has been on the fringe of the council, wanting more parking and fewer units, preferably 96, on the property. Lehnertz also said he wanted to work with the group to proceed harmoniously. “I appreciate Lauren’s idea to come to a consensus, and I know that I am the outlier.”
Mayor Todd Barnes collected the group’s potential four points of agreement: two parking spaces per unit, 15 housing units per acre, four acres for parking/10.2 acres for development, and 100 percent rental. “There’s no use in encumbering this with sales,” he concluded, and the rest of the council unanimously agreed.
Barnes presented a different take on the parking situation, and advocated repeatedly for a smaller intercept lot to reduce the number of cars “turning left off 135.” He described an informal personal survey of traffic he had just completed, from Red Lady Avenue to Gunnison and back. “This morning, I counted 213 cars from Red Lady Avenue to Gunnison in the northbound lane. In the afternoon, at 4:40 p.m., I counted 102 cars in the eight-mile span from Red Lady to Crested Butte South. There’s just a significant amount of pressure on 135 right now …. I think town is going to fill up,” he said, and he did not think the answer was parking at Brush Creek.
Daniel said she is in agreement with all the points Barnes had made of the four possible conditions, as did council member Steve Morris.
Morris then addressed a pressing issue for him of trustworthiness with the applicant. “At the end of the day, I just don’t trust the applicant. If we go back to last January … the applicant stated, ‘There’s no profit margin in this, I just want to break even and pay the mortgage.’ But there is still $400,000 in revenue … Does anybody here think that there’s no profit motive in this project?” asked Morris.
Daniel responded that there has to be some profit margin for any developer to take it on.
“Then why say that?” asked Morris.
A discussion ensued of what the applicant, Gary Gates, had meant by those previous comments. Gates’ attorney, Kendall Burgemeister, attended the meeting to represent Gates, and spoke on his behalf.
“I want to address the concept of that you don’t trust the applicant … I’ve heard him use that expression several different times … and I think I can tell you what he means by that. If we go back to the January 2018 meeting, he showed at 240 and at 180 [units], there is a bottom line. His projected return was around 3 percent, which is low … as opposed to a $40 million real estate project he could take on elsewhere,” said Burgemeister.
“[Gates] isn’t interested in losing money here. He is willing to accept a rate of return that is significantly lower than what any other developer would take,” he continued. “He could be doing that, not worry about wasting his time, without the politics, the personal attacks. I think it’s fair to say he’s not into it for the money; it’s fair to say that.”
Morris thanked Burgemeister for his explanation and stated he had made some good points. “There has been a need for the applicant to try to sway public opinion,” said Morris. He also took issue with what he characterized as “misleading surveys” the developer used to justify some development points.
“When we put it in the context of those types of things … they have more weight with me,” said Morris.
Lehnertz also thanked Bergemeister for his explanation, and said that as far as enduring personal attacks over this process, so have many of the council members.
Next came the pro forma concept to analyze the financial viability of the project, which has been considered extensively as a possible condition for approval. Fogo described how the pro forma had morphed a bit over time. “The way it is currently written by the town of Crested Butte, it would be prior to the contract. And that would be the time to do it,” Fogo said, as opposed to it being required prior to the preliminary plan stage when no definitive plans have had a chance to take shape and the actual work is yet to come. Community developer director Carlos Velado advised the same.
The council eventually elected to strike the requirement from its conditions.
The subjects of housing density and amenities were reviewed as well. Lehnertz referenced the effort of being holistic, as Crested Butte’s council has often referred to its approach. “Going for maximum density is not necessarily in our best interest. For a moment, just take a look at the unintended consequences,” said Lehnertz.
Farmer reviewed her position of wanting more housing. “If we listen to [business owners who have spoken out] … we have a need for more than 120,” she said.
Bergemeister said it is unlikely this project could saturate the market, and said that argument fails to consider other things. First, “Where are we going to find the next 17 acres?” he asked. “Are we only planning for 2020, or are we planning for down the road?”
Bergemeister listed the total rental need in just the north valley, “which doesn’t even include the middle, such as Crested Butte South,” to be 171 units by 2020. “Where are all the free market rental units that are being built?” he asked. “They aren’t.”
“This current proposal offers a unique opportunity for lower AMI. Either you need to have subsidies or density,” said Gatesco project manager John O’Neal.
At every reduction, said Bergemeister, amenities have been eliminated. Getting rid of more three-bedroom units, shifting to one-bedroom units, eliminating covered parking and possibly using a central laundry facility instead of having machines in each unit were among them.
“Can we keep reducing it, yeah. We can, but we have to … make more changes,” said Bergemeister. He offered to present in writing the details of density designs, such as how many bedrooms there would be at each number of units, which had been provided to only a few councilmembers during a September 18 stakeholder meeting. He heard some frustration from the council that not everyone had the same documents with these details, although Farmer did have a copy.
Kolodziej asked about the original Request For Proposals on the project having outlined other uses for the parking acreage, too. Public amenities, such as fields, were of concern, he said. “If all of a sudden we have 200-some people trying to use public amenities,” he said, it could put a strain on current public facilities and necessitate more.
As for the previously discussed requirement of oversight for renters, the council decided that the county court process and documents would provide enough due process. No one felt additional oversight at this point was necessary, and as Kempin described it, “That means getting off into the weeds of minutiae. Now we’re dictating lease terms.”
The group agreed that the lease terms could be worked out later, as the project is further developed, and agreed unanimously to strike that requirement as well.
The prospect of joint sessions with Crested Butte going forward came up, and Fogo emphasized the importance of the town having an official position, if not a unanimous consensus, so the discussion would not return to an individual basis between 14 council members.
“If we do that again, we haven’t gotten anywhere,” she said.
David Baumquist of Friends of Brush Creek spoke briefly. “If you are going to get a consensus with the town of Crested Butte, and I hope you will … you are not that far away,” he said. “These two towns need to hang together. You’re really one community.”
The last subject of discussion was what it would mean for the town to give its official consent to move forward into preliminary plan.
The councils have previously considered requiring that preliminary plan happens before agreement to sell the property. Burgemeister spoke to that as well, saying that it will cost a million dollars due to intensive studies.
“I think we really have to have the assurance that if we get through the preliminary plan, then the deal goes forward,” he said. He spoke of “overly burdensome” parking and review processes, and added up a minimum of six levels of review by the time of completion.
“In terms of getting units on the ground … to convince Gary [Gates] of seven figures on a preliminary plan, when [you] may just still say no, for any reason … I don’t know if I’ve got that ability,” he said.
Fogo ran the official straw poll. The majority, four votes, went to the option of five acres set aside and up to 17 units built per acre (156 units maximum).
The votes in favor of striking the need for outside rental oversight of the housing, although the Gunnison Valley Housing Authority will still help qualify tenants, was unanimous. The agreement to strike the condition that the applicant submit another plan before the preliminary plan was also unanimous.
The vote to strike the requirement for a pro forma won with a majority of five in favor, with Morris and Lehnertz voting to not strike it.
The council plans to vote on approving this stance at its December 18 meeting. A joint session with the town of Crested Butte is likely to be held in mid January.
