Paradise Park affordable housing costs come in way over budget

Town and contractor looking for alternatives

By Mark Reaman

An enormous increase in the actual costs associated with potential affordable housing units in Crested Butte’s Paradise Park is putting the project in jeopardy. The town council learned at its September 5 meeting that anticipated costs for the first phase of the proposed units came in 62% higher than preliminary estimates. 

With partner High Mountain Concepts (HMC), the town has plans to build out the remaining town-owned lots in Paradise Park with 18 units. Phase I includes five units: two duplexes and one single family micro house. Originally the first phase was to start this summer and be completed within a year followed by subsequent phases to complete build out.

As is standard for a Request for Proposals, High Mountain Concepts had made its bid based on architectural concepts and not detailed construction drawings. In a memo to the council from Crested Butte housing director Erin Ganser, it was conveyed that “ultimately, when based on detailed construction drawings and energy modeling, the costs exceeded the preliminary estimates.”

Ganser told the council that “the new construction reality is impacting all capital projects.” 

“We’re all at the mercy of higher prices up here,” added HMC’s John Stock.

Mayor Ian Billick pointed out that the cost increase was significantly more than inflation associated with building. “The staff should perform diligence and work with High Mountain Concepts to gather the specifics,” he said. 

Town manager Dara MacDonald said John and Karen Stock of HMC are willing to dig into the numbers deeper to help town understand the gap, but there hasn’t yet been the time to do that. Town may consider rebidding the project. 

“Our original bid was based on what we did before in both CB and Gunnison,” said John Stock. “But those numbers have changed with concrete for example. There are also complications with the site.”

“We understand there are no final answers here right away, but we’ll regroup and get back with Erin,” said Karen Stock.

Specific bid numbers were considered proprietary for HMC and not released in case the project is rebid.

“You and John are very community based and I have faith in you,” said Billick. “We appreciate you working with the staff.”

“It’s a partnership and long-term relationship,” said Karen.

Ganser said the town is looking at other models for the housing, including opportunities to secure grant funds to help close the gap. “We will also explore whether a third-party investment model could produce rental housing in lieu of homeownership units,” she said. “Regardless of who owns the housing units, they will all have deed restrictions.”

Councilmember Anna Fenerty asked if the project could scale down and perhaps build duplexes on the lots instead of triplexes. 

Ganser suggested a better strategy would be to go slower and still build triplexes but do fewer of them “and save the dirt” by keeping some of the lots open for future affordable housing construction. 

“I agree with that,” said John. “We are all shocked with the costs and some of the complexities with some of the lots.”

The council held an executive session to discuss the situation in private.

In light of the significant cost increase, the council directed staff to do additional due diligence on the construction pricing to ensure that it is reflective of the market.  Additionally, next steps will include explorations of other funding sources to help close the gap and more discussion will be held with the council to determine priorities for the overall capital budget.

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