Evaluation of CB’s Sixth and Butte housing project begins

How to control units for critical work force

[  by Mark Reaman  ]

Nine proposals have been received by the town of Crested Butte to develop the Sixth and Butte affordable housing project. The Request for Proposals (RFPs) had to be returned by Monday, February 28, the same day the town council held a three-hour work session to discuss priorities council ultimately wanted to see with the development along with a review of the potential timeline and risk protections for the town.

While officially submitted, the proposals were not immediately opened and will be initially reviewed by a so-called Selection Advisory Committee (SAC) that will vet the proposals and compile a shortlist of the submittals for the town council to consider. 

The town provided a potential concept plan for what could be done on the property located across from the Gas Café at Sixth and Butte in the Slate River subdivision along with the build-out of the remaining lots in the Paradise Park subdivision. It was determined the properties could hold between 35-45 rental apartments along with 29-33 units that would be owned by local residents for a total of approximately 94 bedrooms. In an ideal world construction in Paradise Park would begin by the end of 2022 with the entire project completed by the fall of 2024. 

“The plan was just a concept based on what we heard from the public so no one should be married to it,” said Crested Butte community development director Troy Russ. “It is an example of what could be done.”

Councilmembers voiced their ultimate goals at the start of the work session that included making sure that broad community goals were met with the project, ensuring low risk for the town if the project for some reason went into a default, providing realistic expectations with timelines, and overall making sure that what was termed a “legacy” project was done thoughtfully and sustainably. Council also wanted to make sure the housing provided fit in compatibly with the growing portfolio of affordable housing being developed throughout the county.

“This is exciting for all of us,” said Russ. “The three specific objectives we hope to see with the returned proposals are affordability, sustainability and livability.”

Russ and the staff presented council with a proposed “RFP selection criteria rubric” the SAC would use to initially review the proposals. It included considering the qualifications and experience of the developers that submitted proposals; determining the affordability of each proposal; looking at the livability elements of the proposal; making sure the development was sustainable and climate friendly; and looking at implementation of the project through the financial strategy and scheduling proposed. “The rubric is a guide and not a scoring system to review the proposals,” he said. 

The town’s new principal planner and housing director Erin Ganser helped lead much of the work session discussion and she explained the value of some of the rubric’s metrics including the need for experience.

Mayor Ian Billick hoped that the SAC could screen out the proposals that likely didn’t have much potential to complete the project but still allow the council to consider unique and out-of-the-box proposals. He also asked how inflation would be taken into consideration given both the increase in building costs and Area Median Incomes (AMIs) that in part determined who would be eligible to live in the new units.

Gunnison Valley Regional Housing Authority executive director Jennifer Kermode said rising costs and wages were certainly a concern but suggested that a phased project could allow a developer to “catch-up and adjust pricing as time goes on.”

Keep it green and neighborly

Sustainability was a priority of the council. The town has engaged August Hasz of REG engineering to help lay out the sustainability measures that could be beneficial. The buildings will be all electric, utilize solar panels, not use foam insulation and provide electric vehicle charging stations. The goal would be to achieve a maximum HERS  50 (Home Energy Rating System) rating which means the building would be at least 50% more energy efficient than a standard building of similar use.

“I appreciate the robust sustainability elements in the memo,” said councilmember Jason MacMillan. Councilmember Anna Fenerty suggested sustainability be given more weight than the 15% proposed for the SAC when reviewing the proposals.

The idea of livability generated a lot of council discussion even though it is only weighted as a 10% consideration for SAC, but proposals that included effective outdoor community space would get extra credit.

Fenerty is a resident of the deed restricted Anthracite Place building and she said it was not good in terms of neighborhood interaction. “I just met someone last week that has lived there the same amount of time as me,” she relayed. “I don’t see my neighbors much and that’s a failure.”

Councilmember Beth Goldstone lives in the Paradise Park neighborhood and she said the opposite was true. “With our cars in the back and everyone’s porches lined up near the street next to one another, there is a lot of neighborhood interaction. We all know our neighbors,” she said. 

“Dog walking generates conversations,” added town manager Dara MacDonald who also lives in the neighborhood.

Councilmember Mallika Magner said she sees communal outdoor space missing at Anthracite Place and that should not be the case with Sixth and Butte. “Outdoor space is vital to livability,” she said.

Goldstone asked if residents of projects built by some of the developers making the proposal could be solicited for feedback on current project. Ganser said that would be possible.

Making sure it meets community needs

Billick pressed the point that ideally, he wanted a project that catered to the essential workers in the community such as teachers, firefighters and town staff. He preferred that sort of qualification be used to help decide who was awarded individual units before simply determining residency through AMIs. 

Housing specialist Willa Williford said that could be difficult under certain financial strategies commonly used with multi-unit projects such as a developer hoping to use Low Income Housing Tax Credits (LIHTC) to subsidize financing of the development. Anthracite Place is a LIHTC project and such projects make them more affordable but come with strict rules and regulations including focusing on lower income residents below the 60% to 80% AMI range. 

“The problem is a teacher or a teacher with his or her spouse may make too much money to qualify for the regulated AMI and this community is seeing an increasing need for teachers,” Billick said. 

Ganser said the challenge would be how to figure out flexibility to achieve such a goal.

“Community housing is a different resource than if the town owns the entire project,” added Williford. “We know we want a project to match the needs of the community.”

“I hate the phrase that ‘you can’t build your way out of the problem,” said Billick. “The question is then how do we break out of that cycle? Personally, I think we should be able to prioritize who goes in there and that means more than prioritizing just AMIs.”

“Let’s see what the developers bring back with their ideas,” said Ganser. “There are tools in our belt we can use to address that, like using master leases. LIHTC doesn’t always allow that level of specificity but we should have an eye on who lives there and enhances the sustainability of the community.”

“I agree that one measure of making it successful is by being selective,” said councilmember Mona Merrill. 

“I’m not hearing any way to do it without losing millions of dollars we don’t have,” said Goldstone. “How do we weigh someone’s worth to the community? I agree with the idea but we need a mix of AMIs.”

“That’s the challenge,” said MacDonald.

“When crafting the rules of the road you still have to adhere to Fair Housing regulations,” said Williford. “Different qualities are provided by different people. Is the artist who painted the mural different from the dispatcher?”

“If we don’t have teachers then the community will collapse,” responded Billick. “We have a scale issue. We’re such a small community and this project is comparatively small so we could do AMIs and not have room for teachers.” 

Kermode said one way to possibly address the issue was to have a “preference tier” in the selection process so when town does a lottery, it can define who gets a slight preference with more entries for example. The preferences could be part of the housing guidelines and not the deed restriction so they could be updated regularly.

Billick reiterated that unique financial strategies possibly being proposed not be screened out immediately for council consideration because of their novelty.

Returning to the “you can’t build your way out of the problem” mantra Billick again asked council how they could do a project that addressed the needs of the community. He asked if legal restrictions just perpetuated the need to build more and more, if there were alternatives way to fund the project to be less restrictive.

Council agreed that would be ideal and Kermode said she would investigate if other communities were discovering ways to prioritize ‘job types’ for housing versus AMIs. Williford said “alternative financing structures” would allow more flexibility. 

“A LIHTC project at this spot may not meet the community needs and values,” said Merrill. 

“I’ll take the best project we can get but our needs should focus on the critical workforce,” emphasized Billick. “And we need to find ways to let them grow in the community and build a life here.”

Council wanted a better idea of how Sixth and Butte fits into the overall workforce housing portfolio in the county. Williford said Sixth and Butte was timed right to be able to address any demographic need since three workforce housing projects were finishing up in Gunnison and other North Valley projects were still on the drawing board.

Town attorney John Sullivan said the town was drafting protections so it could transfer the property to a developer to be used for collateral but in the case of a default of the contract, it could get the property returned to town in a number of ways.

Billick suggested a possible “owner’s representative” be utilized to watch the construction process to make sure it was being built as promised. 

Council generally would prefer the use of local subcontractors but given the busyness of the current market, they did not want to hold up the overall project if local subs were not available. 

The SAC will review the proposals and determine finalists next week with the goal to have council pick a developer by March 21.