Mt. Crested Butte working on new housing agreement for Nordic Inn redevelopment

Potential affordable housing units in the works

By Kendra Walker 

The town of Mt. Crested Butte is working with Pearls Management, LLC (Pearls) to negotiate a new development agreement for a revised Nordic Inn planned unit development (PUD) application. In exchange for town-owned property, Pearls will provide community housing as part of the Nordic Inn redevelopment. During their January 2 meeting, the Mt. Crested Butte town council reviewed the proposed agreement and will continue the discussion at the next council meeting. 

The Nordic Inn, which has gone through several proposed iterations for a major alteration PUD, has a new proposal that would give the existing building a makeover and add cottage-style lodging to the property. The PUD consists of lots NI-1, NI-2 and ROS-1. However, the town owns the ROS-1 parcel, and parking and affordable housing obligations from the previous agreement still need to be worked out. 

Over the past several months, town manager Carlos Velado and town attorneys Nick Klein and Jerry Dahl have worked with Pearls attorney Aaron Huckstep to finalize the development agreement. The agreement proposes that Pearls provide eight community housing units in the development, four of which will be constructed on the town-owned ROS-1 property. 

“These units are to be designed and constructed at the sole expense of Pearls and be conveyed to the Town for ownership. The other four units are to be incorporated into the redevelopment of the existing Nordic Inn,” Velado said in a memo to the council. The agreement also requires that the town’s community housing units be constructed at the same time as the rest of the development. In the event construction does not commence before the three-year expiration of the PUD, Pearls shall pay the town $1.05 million.

Nordic Inn PUD history

The first Nordic Inn PUD application for a 125-room hotel with 140 public parking spaces and five community housing units was approved in 2018; however, this approval is no longer valid. The town purchased the ROS-1 and NI-2 lots from Pearls for $1,050,000 with the intent to construct a surface parking lot as part of the PUD.

Then in 2020, the first alteration of the PUD was approved for a 132-room hotel, 75-space public underground parking lot, and eight community housing units. Under this approval, Pearls is required to provide $1 million of value to the town for construction of the public parking facility for receiving NI-2 back from the town, and the town is required to contribute an additional $1 million for construction that was otherwise to be used for construction of the surface lot. The town-owned ROS-1 lot remains open space.

Presently, a revised PUD application has been submitted to the town for review, which consists of 35 accommodation units including 27 detached cottages, no public parking and six community housing units. The application contemplates Pearls retaining ownership of NI-2 and receiving the title to ROS-1, which is planned to be used as a parking lot for the proposed development. 

The drafted agreement that the council reviewed on January 2 proposes that Pearls provide eight community housing units in the development, with four of those on the ROS-1 property.

Council discussion

Velado summarized the agreement: “Pearls was supposed to compensate us for the $1.05 million. That didn’t happen because of where the PUD went. These housing units replace that payment. That is what we get for contributing NI-2 to the project.”

“Originally the town was going to get a public parking garage. Things have changed and now the value is the four town-owned units,” agreed Dahl. 

“Is everyone content with what’s being offered here?” asked councilmember Steve Morris. “It’s not a super exciting solution to the affordable units that I envisioned. I want to feel like this is a fair partnership. We want to do what’s best for the residents and town that will own those assets.”

Morris suggested the affordable units be two-bedrooms with 1.5 baths. “It’s very likely you’re going to have roommate situations, not necessarily couples,” he said. “I’m just looking at the challenges that come from that sort of thing. For me I just think the quality of living with an extra half bath is important to our long-term asset.”

“I agree that a two-bedroom, 1.5-bath unit is much more desirable than a two-bed, one-bath,” said councilmember Dwayne Lehnertz. 

“I think it’s an important piece to the design of the affordable units,” agreed councilmember Janet Farmer. 

“I can’t speak for my client. This is a brand new issue. I can’t respond to it at this time,” said Huckstep. 

He further explained, “It’s not as simple as adding a half bath…These drawings are fitted to a particular footprint (architect) Gary Hartman was working on. That footprint drove the conversations to the size of ROS-1. I would have to bring it back to Gary, figure out if we have to change the footprint of the structure. It has a cascade effect. This client and Pearls have been very responsive to the town’s desires…but we need time to really digest what you’re asking for.”

The council proposed continuing the discussion to the January 16 meeting so that Huckstep could discuss the “half bath” proposal with his client. 

Councilmember Roman Kolodziej also requested to include language that if the project doesn’t happen, the town receives its money with a good faith adjustment for inflation. However, no other council members felt strongly about that issue for staff to pursue. 

Councilmember Michael Bacani voted against continuing the discussion, as he was in favor of coming to an agreement as soon as possible. 

“We could approve this thing right now and hit the ground running. Yet, we’re punting it,” he said. “For people to say affordable housing is a big deal, well, let’s prove it.”

“I agree, there’s this tension of ‘we’ve got to get the affordable housing up right now because it’s so time sensitive,’ and it’s also got to be right,” reasoned mayor Nicholas Kempin. “I struggle with that. We’ve got to do it now, but what do we get with that?”

“The folks that will need it the most will ask ‘why did you delay on this?’” said Bacani. 

Still, the council will continue the Nordic Inn redevelopment discussion at their January 16 meeting.