Mt. CB and Elevation nail down STR and employee housing requirements

100 hotel room minimum and employee housing extended three more years

By Kendra Walker

During their February 6 meeting, the Mt. Crested Butte town council clarified the Elevation Hotel & Spa’s short-term rental use restrictions as it embarks on major hotel renovations over the next several years. The council also agreed to extend a temporary long-term rental waiver that allows Elevation to provide long-term rentals for its employees and local area employees. 

Last November, hospitality concept developer and operator WoodHouse, owner of the 262-unit Elevation Hotel, announced a redevelopment plan that will include major renovations beginning in April 2025. The plan is to convert 120 to 140 hotel studio units into approximately 40 to 45 two- and three-bedroom condo residences. The project would bring the number of hotel rooms down from 262 to approximately 120 to 140 rooms. The project is anticipated to be completed before the 2026 ski season.

However, an Elevation Planned Community Declaration identifies use restrictions imposed by the town of Mt. Crested Butte on the hotel’s operations, requiring that all resort units be operated as hotel rooms. At a previous work session, town staff and the council expressed concern regarding the loss of hotel rooms and how the combined condos would be short-term rented. During their February 6 meeting, the council approved an amendment to the Elevation Planned Community Declaration to straighten out those concerns.  

The amended declaration requires that a minimum of 100 hotel rooms, or “hot beds,” be retained at the Elevation at all times. The amendment also clarifies that the resort units may be combined for future sale and shall comply with the short-term restriction until they are sold. “Upon the sale of a unit, the units shall no longer be subject to the short-term restriction. The new owner is put on notice that if the unit is to be short-term rented, the owner is required to obtain a Short-Term Rental License from the Town,” read a staff memo to the council. 

“What’s your standard occupancy rate,” councilmember Dwayne Lehnertz asked Elevation representatives. 

“Historically it has been about 40–45% around January,” said Elevation managing director Nick Klaus.

“So the 100 [hotel room requirement] is actually lower than your historical occupancy rate,” said Lehnertz. 

“Yes, and why it’s low is because we don’t believe there’s the right mix,” said Klaus. “People want two- to three-bedroom condos.” He explained that the Elevation/Woodhouse team is still engaging architects to determine the exact make-up of the proposed units.  

Community development director Neal Starkebaum also explained that the new units will not all be created at once and the declaration language will keep those units as hotel rooms until they are sold. 

“At a minimum, 70-80% of those units will go back to the rental pool, so you’re not losing the hot beds,” said Klaus. 

Additionally, the town council extended a waiver regarding employee housing at the Elevation. In 2021, the council adopted a resolution allowing the Elevation to long-term rent hotel units in order to house its employees and locals. The Elevation currently houses approximately 60 of its employees and 40 Crested Butte Mountain Resort employees. The original waiver is in effect until December 21, 2024. 

With the council’s approval, the long-term rental waiver now extends until April 30, 2027, to allow continued rental of the resort units to employees on a long-term basis during the planning and construction stages of the redevelopment. Elevation representatives said they will work with the general contractor to phase the condo conversion to maximize the utility of the property as interim employee housing.

Town staff said they also proposed that the Elevation identify and reserve a set number of resort units to ensure that long-term employee housing would be provided over the term of the waiver. However, the Elevation team indicated that they cannot commit to this limitation, but would continue to actively work on potential housing solutions for its employees. Klaus said they plan to explore long-term employee housing options as part of the process in engaging with architects. 

“We can certainly ask the question but it’s not an obligation of the Elevation and we can’t mandate it through this agreement,” said town manager Carlos Velado. “We can’t say, you must restrict the units.”

“We’re looking to invest $60-80 million dollars into this and revitalize the base area. If there’s a restriction, we’re not going to be able to move forward on the redevelopment,” said Klaus. “We want to extend that waiver as long as possible. We’ve been doing it as a business need and a community need,” said Klaus. “That’s a business need that we’re going to have to solve. We 100% have the intention to pursue a long-term, appropriate workforce housing solution.”