Whetstone annexation discussion taken off the table by town

Deeper talks coming in September as utility extension takes shape

By Mark Reaman

The idea of Crested Butte annexing the Whetstone affordable housing project into town is off the table…at least for now. The project being developed by Gunnison County is located about two-and-a-half miles south of Crested Butte near Brush Creek Road. The town is being asked to provide water and sewer utilities to the development, and there was some discussion of annexing the property so it would be a part of Crested Butte. But the county is on an admittedly tight timeline to get the 230-unit project approved and constructed, and adding an annexation process could risk a major slowdown that could cost everyone time and the county a possible $10 million grant. So, the town/county focus will now be on a utility extension agreement that will in no way be tied to a potential annexation. That discussion could still happen after construction is completed. 

The council made it very clear at its meeting on Monday, August 21 that they had no intention of slowing down the housing project by throwing an annexation kink into the process. While they are waiting on engineering and financial analyses for what it would cost to provide the county water and sewer utilities through an extraterritorial utility extension, it was agreed that even a likely future utility agreement would not mention the possibility of annexation. Such an agreement would require the town to amend its code to allow such an extension. Still, council conveyed some thought that an annexation of the property could happen after the project is built out. 

“We are agnostic about ultimate annexation,” said assistant Gunnison County manager for operations and sustainability John Cattles. “We’re trying to build housing and we want water and sewer. Our request is for an extraterritorial extension of those utilities. We’re concerned about delays and the change of process that comes with an annexation. It is a tight timeline for this to come together and a month delay could result in missing a building season.” 

In a letter to council, county officials made clear a major grant hangs in the balance. 

The county is obligated to use its entire $10 million Transformational Affordable Housing Grant by mid-2026. “If the award is put at risk because of time delays for additional process requirements (such as annexation)—the entire project and neighborhood are at risk of not being built,” the letter stated.

Cattles emphasized that the county’s proposal is in alignment with the goals and values of Crested Butte. The project is expected to have all of the units deed restricted. The units would be built with climate sustainability in mind, and he said the architecture would not be shoddy. “We’re pretty much walking in the same direction,” he said. “While our code is different than the town’s, the county has executed and has a proven track record when it comes to building very energy efficient buildings,” he said. 

Council wanted to be assured that the project would be 100% deed restricted and while a work in progress, Cattles said that working with the developer, Servitas, the project looks to come in with an average Area Median Income requirement of 110% to obtain a unit. 

Councilmember Jason MacMillan, a board member of the RTA, relayed an anecdote where the RTA lost a major grant for a Gunnison transit center, and he was sensitive to the county losing a $10 million financial package for housing. “I don’t want to cause any delay,” he said.

“I agree and trust the county to make the right decisions with livability and sustainability with the project,” said councilmember Gabi Prochaska. “I am happy to forgo the annexation discussion at this time.”

“I like the idea of having the town staff and council represented in the upcoming design workshop in September and having input on design guidelines,” said councilmember Chris Haver. “I’m comfortable moving forward.”

“I would like to continue the annexation discussion in the future but there is no need to do it now and possibly slow down the project,” added councilmember Beth Goldstone.

“It would be irresponsible of the town to add to the cost and time for this plan. I am good moving forward,” said councilmember Anna Fenerty. 

“It looks like an incredible project and I am totally in favor of moving ahead,” said councilmember Mallika Magner. “Maybe we agree on a pre-annexation agreement coming after the extension of utilities agreement. My thought is to get a pre-annexation agreement buttoned down sooner rather than later.”

Prochaska said that issues that would protect the town should be included in the agreement allowing extraterritorial service. Magner said she felt that a pre-annexation agreement should be made prior to such a contract. Such a pre-annexation agreement could at least outline negotiation points of a potential future annexation. 

“An annexation discussion is a big discussion at any level, and we don’t want that to delay the project,” said mayor Ian Billick.

“The discussion of annexation is a big deal,” agreed assistant Gunnison County manager for community and economic development Cathie Pagano. “There is a lot there and we are worried that risks the project. We are trying to include you in the design so you are comfortable with it and perhaps you may want to annex later.”

“Is there risk with not getting it (annexation) set?” asked MacMillan.

“You have no leverage in a negotiation if the extraterritorial extension is agreed to,” noted town attorney Karl Hanlon.

“If there is something more the town wants, now is the time to articulate that,” said Billick.

“Don’t think of the county as a private developer,” said Pagano. “There has been and will continue to be collaboration with this all along. We’re not a hostile partner. We want to work with the town.”

“If something the town wants is not in the proposal, now is the time to suggest it,” said Magner.

Billick said the county has given the town many of the things they have previously asked for, including a roundabout at the Brush Creek intersection, a commitment to an integrated land use plan for the area, and the higher percentage of deed restricted units.

“I still think we need a discussion with the council to see if town needs anything else,” said Magner.

Crested Butte community development director Troy Russ said at least three meetings are planned on the topic through September. Some of the meetings are centered on financial impacts to the town. “There will be at least three sessions ahead to vet what you are talking about,” he said.

Magner did say that there was no reason for in-town design standards to be implemented at Whetstone. “It is not historic,” she said, “More important things are mass, scale, walkability. It should have a different look and it while it should reflect our values, it doesn’t have to look like Crested Butte.”

Council said it wanted to talk about the idea of having people living in Whetstone be able to vote in town elections. This voting question was a somewhat controversial item on a recent town survey and will be discussed further if an annexation discussion reemerges.

“There seemed to be a lot of confusion on the survey about how much property taxes would be impacted,” said Billick. “That is a very small portion of our budget, and they haven’t been raised in decades. We are reliant on sales tax.”

“Representation is really important,” said Magner. “We struggle with the fact so few full-time residents live in town anymore and this would be all full-time residents. It would be good to have them voting and be able to be a part of town boards.” 

Town council agreed to abstain from any annexation discussion in the immediate future. Billick asked council members to make staff aware of any conditions they want as part of a utility extension agreement discussion that will happen in September.

The county hopes to begin construction on the Whetstone project late in the 2024 building season.