Sawtooth II housing project finalized

32 deed-restricted units in Gunnison at $340 per square foot; begins in April

By Katherine Nettles

Gunnison County signed a final agreement this month with a company in Buena Vista to provide 32 new affordable housing units for the south end of the Gunnison Valley, which could be complete as early as October of this year. County manager Matthew Birnie updated commissioners during their March 19 meeting that on March 7 he finalized the agreement with Fading West, a design, development, manufacturing, construction and property management company in Chaffee County for the Sawtooth phase II project. The modular apartment style building located near the Gunnison Fairgrounds will provide 32 units ranging from studios to two-bedroom apartments for a guaranteed maximum price of just over $11 million. 

“That is very close to what we had anticipated originally,” said Birnie. “It crept up on us a bit, but not bad. And that ends up being just over $340 per square foot, which is a pretty damn good price in this market.”

Birnie confirmed that price is inclusive of all costs, including every unit, the site work, geothermal and solar. “So we’re very excited about that; that’s a locked in price,” he said.

Commissioner Jonathan Houck marveled at the low cost for the housing project’s second phase. “I want to highlight $340 per square foot including our energy efficiency priorities that we’re doing on our projects and we’re showing that they work at that residential level too,” he said.  

Commissioner Laura Puckett Daniels asked if that included the full site work and finish landscaping and utility work. Birnie said it included all of those details up to when people move in. 

“We’ve really developed a strong partnership with Fading West, and they’ve kind of evolved some of their practices,” said Birnie. He said they had not, for example, done geothermal before. In the county’s Sawtooth phase I project, which included 18 mostly deed-restricted townhomes and accessory dwellings, he said they used air-to-air heat pumps which was also new to Fading West. “We’re kind of co-innovating some of these in a modular space.”

Birnie said he was impressed with the framing and overall quality of the company’s work after having visited the factory. 

“It’s the best quality framing I’ve ever seen, it’s not what folks think of when they think of manufactured housing,” he said. “These are homes. These are framed with 2 by 6 [inch] lumber, and the precision with which they are able to do things in that factory is pretty incredible, versus being outside in our environment.”

The most exciting element, continued Birnie, is the timeframe of less than six months from start to finish. 

He said the application for city of Gunnison permits has been submitted, and the pre-application process with the city has been underway for a few months with no anticipated delays.

Production on the factory line in Buena Vista is scheduled to start in April and should be complete in mid-June, while site work is targeted to begin in early April. The units are scheduled to be brought in on trucks as stacked boxes starting the third week of June, and the siding will be installed on site. The goal is for October completion and move-in to begin shortly thereafter.

Houck said the modular building concept is helpful because the workforce in the Gunnison Valley is already quite busy. “So we would have to get in line with other projects,” he said of the prospect of building with local contractors. Birnie noted that the site work would be done by local workers, but “there’s no local framers looking for work around here.”

Funding for the future

Phase II will be the county’s first foray into retaining ownership of apartment-type units, said Birnie, and the county is completing the project with a $6 million loan from the general fund which will get paid back over time as the units earn rental income. All units in Phase II will be deed-restricted, with eligibility for residents earning a range of 80% to 120% of area median income (AMI) and up to 130% of AMI in some of the bigger units.

“That’s pretty remarkable for rural resort communities,” commissioner Liz Smith commented. “We’ve expanded that AMI range for workforce housing up to 140% just because of the need and also the cost of these projects. To be able to complete something like this where it will eventually have cash flow we can reinvest in more housing at those AMIs is not something I’ve heard other communities talk about.” 

Birnie agreed. He said the county has worked on this concept for a long time, and he is hoping to apply it to the Whetstone project in the North Valley if possible. 

“That’s going to be a very challenging project to finance. The cash flow is not there yet, so we’ve got to figure out that intersection and cap fees,” he said. The Whetstone project is estimated to bring in 255 units at a cost of more than $130 million, breaking ground in 2025 if all goes as planned.

Sawtooth Phase I was completed in 2023 and is now fully occupied. Assistant county manager for sustainability and operations John Cattles previously estimated that Phase 1 would generate about $250,000 in revenue annually, and that project was funded primarily by a one-time American Rescue Plan Act (ARPA) grant.