The Crested Butte News Serving the Gunnison Valley since 1999
Red tagged and continuing concerns
By Mark Reaman
To say the Mineral Point affordable housing project on the north side of Crested Butte by the Gas Café is struggling is probably an understatement…but that was the general term used to describe the project this week. For the second time since construction began, the Crested Butte building department has “red-tagged” the construction site, stopping any work. Town officials have confirmed that supervision over the project has not been consistent, which has led to several problems with timing and quality of work. Still, the hope is that the final product will be of good quality and completed by the fall or end of the year at the latest.
Mineral Point is a $16.2 million housing project consisting of 34-units throughout three highly energy efficient two-story walk-up buildings, with studios, one- and two-bedroom layouts. Town awarded TWG, a housing developer out of Indiana, the development contract to build and collect rents from the project while management will be done by the Gunnison Valley Regional Housing Authority. TWG has done projects in 22 states, many involving the complex LIHTC (Low Income Housing Tax Credit) financing. Given the LIHTC element of Mineral Point, the town’s affordable housing guidelines don’t come into play and instead the project is operated under the federal Department of Treasury regulations for such low-income serving projects.
TWG hired Streamline General Contractors to run the construction project, and it has not always been smooth sailing.
Crested Butte building official Astrid Matison sent a red-tag, stop order to project manager Brock Droescher of Streamline in Overland, Kansas on May 29 citing conditions on the site in terms of construction debris management, not having workers follow OSHA safety regulations, improper storage of window screens likely to get damaged or lost, and not having a supervisor/manager on site at a commercial project.
Several sources have expressed concern to the CB News about the project’s construction quality, shortcuts in building and timeline. An individual seemingly overseeing the vacant worksite on Monday indicated a new crew was coming in to get Mineral Point back on track. Emails from the News to both TWG and Streamline officials associated with the project were not returned.
During the June 2 council meeting Crested Butte mayor Ian Billick asked about the situation.
“Mineral Point has struggled,” admitted town manager Dara MacDonald who emphasized town leased TWG the land and they, not the town, are the developer of the project which should provide future housing options for the town. “The general contractor on site has had a hard time getting quality supervisors. We will continue to hold them to task.”
“Progress has been bumpy, but we’re holding them to code and making suggestions when we see practices that can be improved to ensure longevity of the building,” Crested Butte housing director Erin Ganser commented recently. “The GC has struggled to keep the superintendent position staffed, and regardless of our warnings about our unique construction context, they have struggled to get solid footing.”
“There’s been a lot of chatter that this is turning into something like the Homestead housing development in Mt. CB where foundations had to be ripped out and the project basically restarted,” said Billick. “Do we have structural concerns with the contract? Could we be liable for repairs?”
“Astrid has gone through and is good at holding them accountable,” said MacDonald. “According to Astrid there are some issues with framing that are impacting the roof. The quality of construction will be good in the end.”
Billick asked if the project was bonded, and town attorney Karl Hanlon said there was not a performance bond with the town and he was not sure what the arrangement was between the developer and investors.
“Part of the benefit of going with a big, national contractor like TWG, is they have a lot in the game with this development. I feel they’ll deliver in the end,” said MacDonald.
“A lot of local contractors are watching this project and seeing what is happening,” said Billick. “We have been very aggressive to get this project done. It is a reflection on us even though we aren’t the developer.”
Town staff emphasized that Mineral Point was not a town project. They selected a national firm familiar with similar housing projects and leased the land.
“There is a lot of reputational risk at play for a national developer in a project like this,” said Ganser. “They also have to deal with the cost overruns.”
Ganser said the red tag is issued by town as the regulatory authority, not as the construction contract holder. “Streamline’s contract is with TWG. Town leased the land to TWG and TWG’s ownership entity is at risk for construction and owns the improvements. There will be work occurring on site during the stop work order to correct the site condition issues. While inspections have occurred with violations, Streamline has remedied items as they have been identified.”
According to Ganser, Streamline just lost their third project superintendent. “They have interim staff on site, a couple of guys that have been involved in between previous supers and who are familiar with the project,” she said this week. “TWG does not have personnel on site, which is common for these types of projects. They hire the GC and have multiple parties that do routine inspections. TWG’s staff visit to observe and inspect work as the owner. The design team with Studio Architecture inspects monthly and requires that any deviations from the plans be remedied be the general contractor. Another third party inspects to ensure the final product is per specs and plans, and the construction lender also has a third party that inspects the project each month.”
Originally expected to start leasing units in August of this year, Ganser said under the federal tax credit schedule, at least one unit in each building must be completed and leased before the end of the year.
“If I was a betting person, the idea of them coming in on time and in budget is declining,” said Billick. “Hopefully this time they’ll respond.”
Council entered into a long-term lease of 75 years for the one-acre site with TWG. LIHTC projects are earmarked for lower income workers and original rent estimates were anticipated to range from about $400 to $1,100/unit per month, depending on the unit size and household income qualifications. The rents will be based on HUD allowances for a household making 30%-60% Area Median Income (AMI) that equates to an income of $27,000 – $57,000 for a household of two in 2025.
Ganser said that Crested Butte covered the costs for master planning, environmental remediation (of the old dump site), extension of wet utilities, relocation of the GCEA trunk line to Mt. CB out of the site and into the public ROW and installation costs for the soil gas mitigation and monitoring system. “We also provided $500,000 of development gap funds to TWG,” she said. “Taking into consideration state grants and brownfield tax credits, Town’s out of pocket expense was $2.3 million, or approximately $68,000 per unit.”
