CB continues with affordable housing general contractor

Practicing due diligence while pursuing $12 million bonding 

By Kendra Walker

During their March 5 meeting, the Crested Butte town council agreed to continue with High Mountain Concepts (HMC) as their general contractor for the upcoming affordable housing units in Paradise Park and next to Mineral Point. Based on the construction pricing coming in significantly higher than the original estimates and with higher interest rates, the council agreed last month to pursue bonding for $12 million that will allow for the construction of 20 units to be completed by 2026 while preserving some vacant land for future projects. The council also asked staff to conduct appropriate due diligence to decide whether to move forward with HMC or issue a new Request for Proposals (RFP) and rebid the project for an alternative contractor in the hopes for better pricing while maintaining the goal of beginning construction phase 1 this summer.

Through a previous RFP process, the town had selected HMC to be the development partner on the project in spring of 2022. The council had approved HMC based on the team’s extensive local experience in building workforce housing, construction capacity, solid relationships with local subcontractors and project approach. 

Housing director Erin Ganser presented the council with two options, to continue with HMC as selected or to issue an RFP. 

“The primary benefit to staying with them through construction is that HMC has been deeply involved in the design of the project giving them insights to the nuances of the project, including the value-engineering of the heating systems,” she said in a memo to the council. “Additionally, they have established relationships with local subcontractors and are positioned to start construction as soon as the debt is issued.”

Ganser expressed concern that reissuing a bid could impact the project’s timing, and there is no guarantee savings will be an outcome of the process.

“Staff price-checked HMC’s bids with two other local general contractors who indicated that they were reasonable for this market,” she said. “Going out to bid takes time. We’ve already worked with subcontractors through the bidding process and are cued up to be able to say yes this is a go if we choose to reissue a bid. One of my main concerns is us wanting to start construction beginning of June and being late into the pre-construction season.” 

She continued, “Another thing we lose by changing the process is the team has been at the table through the design process. That awareness and that knowledge is certainly valuable.”

Other than reducing the total number of units in the project from 32 to 20 to arrive at a total development cost that can be financed with a bond and funded from the available sources in the town’s affordable housing fund and rental revenue, HMC’s scope of work has not changed. To date, the units have BOZAR approval and are positioned for building permit review.

“Sometimes when projects don’t work as originally planned, you can end up with project that’s not quite as designed and sort of piecemealed,” said councilmember Jason MacMillan. “Is that what’s happening, or do you feel confident with where you’ve landed?”

“I don’t think we’re piecemealing anything,” said Ganser. “These are some of the first buildings coming though under the new code. We’re doing new systems now and that took some work and time, looking at what are the different ways to skin the cat. Now we know what our options are and how we finance this. We’re zipping up plans based on where we’ve decided to go for phase 1, and we’ll continue to look at alternatives that would be beneficial financially.”

“I really appreciate you doing the due diligence,” said mayor Ian Billick.

The council unanimously agreed to staying the course with HMC through construction.

Ganser said that conversations are moving forward with the town’s public finance advisor and legal counsel to begin the process to issue debt by the end of May to ensure that construction of phase 1 can start this summer. 

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