Another step approved in the Sixth and Butte project

Land tied to fire district now being eyed for more housing

[  By Mark Reaman  ]

The town of Crested Butte and the developers selected to build the Sixth and Butte and Paradise Park affordable housing units have come to terms on a Memorandum of Understanding. The non-binding MOU basically outlines the spirit of the partnership and defines expectations of the project. It is a step before a formal development agreement is signed. The town council agreed to the MOU on Monday, June 20.

Crested Butte housing director Erin Ganser took the council through the two agreements. The first is with Crested Butte’s High Mountain Concepts that will build the deed-restricted, for-sale units in Paradise Park along with some for-sale units in the Slate River annexation across from the Gas Café. The second MOU is with TWG, the developer overseeing the rental portion of the Sixth and Butte project.

The MOUs make clear things like the waiver of tap fees for affordable housing, the bond required to guarantee completion of construction, and who is responsible for utility extensions. The town has committed $800,000 to be put toward additional energy efficiency standards above the building code requirements on the for-sale units. The hope is to begin construction of those Paradise Park units next spring with the first units ready for occupancy in the spring of 2024.

The rental portion of the project will start later because the town and developers will be applying for federal LIHTC tax credits that help fund low-income affordable housing. The application for those credits is due in February of 2023 and it’s estimated they could help fund approximately $12 million of the project. Because LIHTC funds come with tight restrictions, town council has been clear that ideally, the LIHTC money wouldn’t be used so there could be significantly more flexibility with who would qualify to live in the units under income restrictions. But $12 million is $12 million and the restrictions would address the lowest income earners in the valley.

Exploring ways to be flexible

“The challenge for the town is figuring out the critical workforce of town and how AMI (Area Median Income) comes into play, so for me we should do what we can to retain flexibility,” said mayor Ian Billick. 

“You pay for flexibility,” acknowledged Ganser. “There is more flexibility if the town is the developer and there is less ties to federal money. It is the equity of the tax credits that make this type of project feasible. It is an interesting time given the economy. Each interest rate hike will make the project harder and harder.”

Ganser said the town is still looking at ways to retain as much flexibility as possible with the future income limits. “We would love to explore the options to retain that flexibility,” she emphasized. “There is potential with the second homeowners who want to help after the tax on second homes was rejected last fall. There is an opportunity with Sixth and Butte for more community involvement for financing with philanthropy to retain desired flexibility. Another idea from that perspective is for community participation to help with down payment assistance. That would be a real tangible action. Someone might be able to sponsor a local family for example.”

 Ganser said ideally the project would be awarded the LIHTC credits in early 2023 and if the town assisted with design plans, ground could be broken in the fall of 2023. Otherwise, construction probably wouldn’t commence until the spring of 2024. Council agreed to pick up the design costs that would be reimbursed through LIHTC funding.

The fire district parcel opens up more housing potential

Councilwoman Mallika Magner asked if, with the Crested Bute Fire Protection District decision to withdraw from its potential ownership of another lot in the Slate River subdivision, that parcel could be included in the affordable housing project.

Ganser said the process was too far along to bring in that property to this current project. “Doing that would push us out another year,” she said. “If we take our foot off the gas on Sixth and Butte, we would be delaying construction. To stop and back up would be a mistake. But it is there for the future.”

Town manager Dara MacDonald said the current Sixth and Butte and Paradise Park project was a big undertaking for the community. “Doing this many units is a big project for this market,” she said. “We want to test the market and see how it goes. But we are certainly looking at that property for future housing.”

“That parcel is zoned Public so we wouldn’t be able to sell units on that parcel. They would have to be rentals,” added community development director Troy Russ. “It is a great thing to have in the land bank.”

The town has retained law firm Bryan Cave Leighton Paisner as special legal counsel to review documents associated with the workforce housing project. Ganser said BCLP is considered to one of the most experienced housing teams in the state.