The Crested Butte News Serving the Gunnison Valley since 1999
Accomplishes 90-year deed restriction in exchange
By Katherine Nettles
Gunnison County amended its agreement with the owner of the Paintbrush housing development in Gunnison last week, assisting the owner in refinancing their loan and securing a 90-year fixed deed restriction on the property in the process.
The county had conveyed the Paintbrush property to Gary Gates in 2020, and Gates constructed 76 workforce housing units there, which he was also contractually obligated to operate and maintain.
Gates had reached out to Gunnison County commissioners in May asking to change the structure of the agreement between the two parties based on some trouble he was having with refinancing the development. Gates suggested amending the deed restrictions on the property, both to better protect the development’s deed restriction and to make refinancing easier for his company, Gatesco.
As previously reported by the Crested Butte News, Gates shared his correspondence with the county and explained the situation to the News in early May. He said that the current loan was expiring and the company had secured a refinance commitment from a new lender. But the lender wanted Gunnison County’s $750,000 deed of trust removed as the senior deed of trust on the title. That had been meant as a safeguard for the county to collect damages if foreclosure ever eliminated the affordable housing on the property, and Gates said the $750,000 was an estimated value of the land plus all the county’s costs related to the project. The new lender was not willing to hold the deed of trust but agreed to amending the affordable housing deed restriction to survive any foreclosure for a 90-year term.
Gates’ request was loosely referenced in an executive session on the commissioner’s agenda on May 26 and following the executive session commissioners unanimously delegated county manager Matthew Birnie the authority to execute a new agreement.
The county provided the News with the restated affordable housing deed restriction, signed May 25. The document notes that the original deed restriction was susceptible to being eliminated in the event of a foreclosure on the property but provided the county with a deed of trust securing liquid damages in the event of a foreclosure that eliminated the deed restriction.
The document also restates the original deed restriction to establish a fixed 90-year term and ensure that the deed restriction cannot be terminated with a sale or foreclosure of any sort. The new lender, Starwood Mortgage Capital, LLC, agreed to the terms.
Additionally, Gates explained that the county has first right of refusal for 60 days to buy the property if any seller gets a contract to sell. The county is also to be given notice of any foreclosure filings in case they want to purchase the property back prior to or at foreclosure.
“I appreciate the Board of County Commissioners and the County and its staff to work with our refinancing efforts to ensure these critical deed restrictions remain in effect for 90 years,” said Gates in a statement this week. “It’s always been our goal to make this public-private partnership of Paintbrush a success. It’s a project that with county leadership has been beneficial to many working families of Gunnison County and we are grateful to be a part of it.”
The development serves mostly income-restricted residents (68 of the 76 units) making anywhere from less than 80% of area median income (AMI) to less than 200% AMI.
“While revising the deed restriction on Paintbrush was not something the county sought, it did give us the opportunity to strengthen protections on the property so that it is more secure for Gunnison County residents into the future,” commented commissioner Laura Puckett Daniels. “That is a win that came out of the situation.”
