County extends Whetstone project application period

Preliminary plan would have been due February 9

By Katherine Nettles

Gunnison County commissioners agreed this week to extend the preliminary plan application deadline for its Whetstone Community Housing project to give county staff and the project developer a few extra weeks given a few minor delays in the process. Some other issues with the timing of state grants for the project and for other county-led affordable housing projects are creating a bit of stress for county staff, however. 

Commissioners approved the Whetstone sketch plan application on February 9, 2023, for the large affordable housing project planned for the north end of the valley. The project is expected to include 255 housing units, varying from studio apartments to three-bedroom townhomes, along Highway 135 across from Brush Creek Road. According to Gunnison County Land Use Resolution (LUR) standards, the deadline for the county and developer to submit the preliminary plan to the Gunnison County planning commission is 12 months later, or February 9, 2024.  

Assistant county manager for operations and sustainability John Cattles and Servitas, the developer the county has selected for the project, requested an extension in early January based on recognition that the preliminary plan application would need a few extra weeks. 

“Really we’re just a few weeks behind,” Cattles told commissioners on Tuesday, January 16. “It was getting really close [to the deadline].”

“We are certainly doing our best to maintain the schedule for other reasons related to the economics and constructability of the project with the seasons. But we’re probably going to need a couple weeks extra to get the submittal in front of the planning commission,” said Cattles.

The extension request also included a memo from Norris Design, a partner in the project. It stated the full 12-month extension period is not anticipated to be needed. “The extension will allow the county and development team adequate time to prepare a high-quality Preliminary Plan submittal, which is in progress at the time of this extension request. The Whetstone Community Housing development remains dedicated to the creation of affordable housing for a diverse mix of local individuals and families to live and work in the Gunnison Valley. 

“In accordance with the LUR, there have been no substantial changes to the site, the surrounding context, or the status of services. Ownership, site conditions, adjacent uses, and the ability of service providers to serve the site remain substantially unchanged.” 

Assistant county manager for community and economic development Cathie Pagano said she recommended approving the extension request and reminded commissioners that the LUR allows one extension for a period of up to 12 months in this situation.

In an accompanying memo, Pagano wrote, “Staff has reviewed the request and the applicable standards and finds that there are no substantial changes in adjacent land uses. The applicant continues to work with the town of Crested Butte to serve the development with water and wastewater treatment utilities and there has been no change in the willingness of any other service providers to serve the development. Finally, there has been no change to the subject parcel,” the memo stated. 

“I’m just happy to hear you’re keeping your foot on the gas,” commented commissioner Laura Puckett Daniels. “I think for the sake of everybody in [this room] and in the public, understanding this isn’t because you’re dilly dallying is important.”

“No. We’re very sensitive to how fast delays can compound and the costs compound with those delays,” replied Cattles. “We’re really defending against that.”

“I can understand you need a little more time. It’s a complicated project,” concluded Puckett Daniels.

Commissioners approved the request of a 12-month extension unanimously. 

The trouble with grants

Commissioners and staff also discussed some frustrations with state-backed grant funding, starting with the $10 million grant for the project’s infrastructure that has been approved for the project but is not yet finalized for use. Commissioner Liz Smith asked if the state grant issue has caused delays to the project. 

“It has not. It has impacted our ability to spend that money. We’re having to spend our own money on engineering and things like that which we had hoped the grant would cover,” said Cattles. 

County manager Mathew Birnie said the hold up on grant funding and having to spend county money is related to how the state’s contracting process works. 

“The state has just been moving very slow. But we’ve had to keep the project moving so we’ve had to fund [some engineering] using county funds instead of utilizing the state resources,” said Cattles. Smith asked if that would be compensated or reallocated to other aspects of the project. 

“This is frustrating,” said Birnie, “But they will only reimburse you for costs if you borrow the money. If you spend money you have, they won’t reimburse you which is totally illogical.”

Birnie said the grant doesn’t cover the whole cost of the project’s infrastructure, so he is confident they will still spend all the grant money.

Cattles said they would be able to spend at least some of it. “We may struggle to spend everything we applied for,” he conceded.

Pagano said that while the grant was awarded in March, “We still do not have a final contract in January. So it’s been almost 12 months. It’s absurd.”

Pagano said she has been in conversation with the state about it, and Smith said she would be happy to provide feedback to colleagues at the state.

“We do have concerns. Every grant that we’re seeking with the state is a very long and arduous selection process,” said Cattles. “But it is just drawn out for months and months and months and then the contracting process, we’re finding, is even worse.”

Birnie said the issue is that projects eligible for grant funding are supposed to be “shovel ready” but then the grant process has the potential to stall a project that far along. This was a consideration as commissioners also approved county staff applying for a state grant for its Sawtooth phase II housing project in Gunnison. Pagano said that the preliminary process of applying for the state grant started in July 2023 and the award will be announced in May 2024. 

Commissioner chair Jonathan Houck echoed Smith’s remarks that they can continue this conversation about efficiency and grant timing at the state level.

County attorney Matthew Hoyt commented that it seems to be an overly cautious approach based on the “state’s inability to differentiate between a private and public project…is that something you see?” he asked. 

“I think there’s something to that,” replied Cattles. “But a lot of it is just a lack of understanding of how projects work, the timing that’s required and the momentum that’s required to keep projects on track. And then just generally trying to force all these new resources into existing programs instead of creating something more unique and streamlined. So, we’re working with programs that were developed with federal funds and been in place for decades.”

Taking the challenges into consideration, county staff and commissioners agreed the grants are still worth applying for, and the latest effort to secure a grant for Sawtooth will move forward.