CB town staff foresees rental project without using state money

Council pushing for fast timeline and possible state funding

By Mark Reaman

Members of the Crested Butte Town Council are chomping at the bit to start an affordable rental housing project as soon as possible in Crested Butte, while the town staff is counseling them to have a little patience.

In an extended discussion at the Monday, December 16 council meeting, council member Mallika Magner discussed with the staff about holding more meetings and deeper conversations on how to tap into state Department of Local Affairs (DOLA) affordable housing funds, which were at one time anticipated to be hundreds of millions of dollars. That pool of money is now expected to be less than originally hoped for.

Originally, DOLA was to receive about an additional $77 million annually for three years starting in 2021 to address housing needs in the state. But word is trickling out from Denver that number might be reduced by about $40 million each year.

At the same time, town staff suggested to the council that the town would not need that DOLA money and its accompanying regulations to do a rental project on the upcoming Slate River annexation property across from the Gas Café. While that annexation is in the pipeline and expected to be done next spring, the town does not yet own the land.

Council member Will Dujardin questioned how long the Crested Butte council would have to wait before making a decision to pull the trigger on a rental housing project, depending on the Mt. Crested Butte North Village proposal that includes potential rentals. He also questioned the need for more “For Sale” unit construction as opposed to focusing on rentals.

Town manager Dara MacDonald explained that the “For Sale” units could be built in Paradise Park where there was already infrastructure installed, while the rental project was slated for a portion of the new annexation that would need a clean-up of the old town landfill.

She also said more solid information on the status of the North Village project should be made in early January after a January 7 meeting between the Mt. Crested Butte Town Council and the North Village development team. “A lot more information is expected to be clarified pretty soon,” MacDonald said.

“We all want more in-depth conversation about the priorities and timelines being discussed,” said Magner in relation to a recently formed North Valley affordable housing subcommittee. “Several of us on council don’t understand what’s planned on the Slate River annexation property and why.”

“That is the purpose of the January 21 work session scheduled for the Crested Butte council after there is more clarity with the North Village,” said MacDonald.

“I would like a joint meeting here with the DOLA officials, us, Mt. Crested Butte, the county, the Valley Housing Fund so we can get hard information about how the DOLA process would best work. It is my understanding that the most successful process would be if we approach the state with the idea of a unified plan for the valley,” said Magner, supporting a process put forward by the Valley Housing Fund. “I’m certainly not comfortable with the idea of Crested Butte trailing any other entity with affordable housing. We all talk constantly about the need for rental housing and I don’t want to see Slate River as a low priority in the subcommittee.”

“It would be prudent for the town to have the DOLA conversation internally first,” suggested MacDonald.

Crested Butte community development director Michael Yerman told the council he had been on an informational phone call that day (December 16) with DOLA representatives and there were two main takeaways. The first was that the state had no plan yet, based on the public input gathered about the potential affordable housing funds. The second was that because the funds were likely to be reduced, DOLA was going back to “business as usual.”

Yerman said he didn’t think the state had the funding they anticipated. “My impression is that the north end of the valley might get a LIHTC [Low-Income Housing Tax Credit] project,” he said. “I would ask that the council be patient. The North Village developer knows what to expect from DOLA and money for horizontal infrastructure is probably not part of it. There are other funds that can help with that but not at the level expected. Between now and a January 6 meeting with the Mt. Crested Butte Town Council, the developer will determine the funding and have a better idea of the project viability.”

According to Yerman, the DOLA representatives indicated they were not interested in income averaging to accommodate people earning more than 60 percent of Average Median Income (AMI). DOLA projects are geared at rental projects for people making less than that 60 percent figure. “There has been no official state decision yet but the conversation was not encouraging,” he said.

“I would like to see the state people come here and talk to us directly,” said Magner. “It is my understanding the state is open to a joint project.”

“A town project on the Slate River annexation does not envision going after state money,” responded Yerman.

“Why?” asked Magner.

“We don’t need it,” said Yerman. “We don’t have the horizontal infrastructure needs and there are significant tax credits on the back end of  the VCUP [Voluntary Clean-up and Redevelopment Program] process cleaning up the old dump. We can work with a private developer and they can make money on such a project. Then we won’t be hamstrung by the requirements put on the money from the state. There is enough there that we don’t need the state money.”

“I want a deeper conversation about using state funds,” said Magner.

“We can have that but the state doesn’t fund rentals for that 80 percent to 120 percent AMI levels that we target,” said MacDonald.

“Willa [Williford, local housing consultant] feels there is room for one more LIHTC project that focuses on the 60 percent AMI or less. But we can go vertical quicker,” said Yerman. “Mt. Crested Butte has the need for extensive horizontal infrastructure. We can do a project and have more flexibility without the state funding requirements.”

Yerman said how Mt. Crested Butte and the North Village proceed will determine actual timelines for Crested Butte projects.

Council member Chris Haver said it would be prudent to wait and continue the discussion at the planned January 21 work session on future housing. “We will have more information to digest on the north valley layout at that time,” he said.

Newest council member Mona Merrill said it was important for the council to be kept in the loop of changing information. “It sounds like the staff gets information and it is happening fast, with things evolving quickly. But we can’t make decisions without the information.”

“I have been saying we need more time while we are all working as fast as humanly possible,” said Yerman. “The hope is that Mt. Crested Butte reaches a consensus on their direction after the January 7 council meeting and then we can figure out what we want.”

“The council wants to be guiding the timeline,” said Magner, “not us having to accept someone else’s timeline.”

“The timeline is just a draft right now,” explained MacDonald. “We are still waiting on all the information.”

“Looking at a timeline, the main question seems to be, when do we have to decide whether we can go forward and break ground on a clean-up this coming summer?” said Yerman. “We have until March or April to make that decision. We’re getting there.”

Yerman again emphasized the advantage of not using DOLA funds on the project. “We have the ability then to serve the people you want to serve,” he said. “Be careful because if you invite DOLA to come in and create expectations of them, it can lead to confusion.”

“I love the idea of a public-private partnership on the annexation property,” said council member Chris Haver. “I could see us doing that and supporting a LIHTC project in Mt. Crested Butte.”

“I would want a meeting with DOLA representatives and how they expect to award the money,” said Magner, saying that the state agency is being inundated with project proposals from other communities within the state. “We haven’t given them our feedback or a plan.”

“They were here and received a lot of feedback,” said MacDonald.

“It just feels like we aren’t getting significant information to make these decisions,” said Magner. “I want a separate meeting to go over all the numbers. Maybe bring in the Valley Housing Fund. I also want to have a deeper discussion about the absorption rate and the idea of building too many units.”

“That is the plan for the meeting on January 21,” said mayor Jim Schmidt.

“You have a staff that has built more housing than almost anyone in the last five years,” Yerman reminded the council. “We understand how to do it. The North Village is going as fast as it can to get answers. January 7 is its decision point.”

The council will hold a work session on the topic January 21 with the hope Mt. Crested Butte supplies a direction for its potential North Village project before then.

Check Also

Mt. CB reviews Hunter Ridge subdivision preliminary plan

Three community housing units proposed, 14 total residential units  [  By Kendra Walker  ] The …