The Crested Butte News Serving the Gunnison Valley since 1999
Construction to begin this spring
By Katherine Nettles
Gunnison County commissioners on Tuesday finalized the financial plans for the county’s Whetstone Community Housing project located two miles south of Crested Butte. After months of “stress tests” on the financing plan, including from independent parties, the financing documents are a final detail in the project preparation. The project has been approved for 252 housing units of various types, divided between 23 buildings on a 13-acre parcel in the North Valley. The project is located on Highway 135 across from Brush Creek Road.
The guaranteed maximum price (GMP) of the project with the county’s chosen builder, Servitas, is $127.7 million. That agreement was signed just before the holidays in December 2024. Groundbreaking is expected this spring.
Commissioners reviewed and authorized county manager Matthew Birnie to execute the financing documents, which will include issuing and selling county revenue bonds in the amount of $118 million to Northland Securities, Inc., and committing to keep a reserve fund intact that would cover project payment costs for one year.
Birnie described the process in which the county’s housing authority will be issuing revenue bonds to finance the project’s construction costs and the county will act as a backup if the reserve fund is ever used. This housing authority is a recently activated entity of the county and is separate from the Gunnison Valley Regional Housing Authority.
[Gunnison County] will be the developer and owner of [Whetstone],” said Birnie. “Obviously that organization (the Gunnison County Housing Authority) doesn’t have the kind of credit that the county generally does because it hasn’t issued this kind of financing in the past. What this essentially does is say the county will back these revenue bonds by pledging to replenish what is called the debt service reserve.”
The debt service reserve is equivalent to one full year of financing costs for the project. According to Birnie, one full year of debt service (payments), will be around $7.3 million in the county’s current model.
Reserve funds would only be used if other county-pledged revenues were not sufficient to cover costs at any point.
“This doesn’t require the county to put up any money,” said Birnie. “But if at any time that debt service reserve was to be drawn upon because the other pledged revenues, from rents at Whetstone, from linkage fees and from other revenues from other projects, if they were ever not sufficient to pay the debt—which we don’t think will occur—then the county would replenish that debt service reserve.”
Birnie said this would not make the county obliged to the whole Whetstone debt, but the amount that had been drawn down. “It’s essentially a credit enhancement for the market to assure investors that this newer enterprise is not the only thing they are hanging their hat on,” he characterized it.
Commissioner Laura Puckett Daniels thanked Birnie for his and his staff’s continuous work on the financing plan, and for going over the details extensively with her as it was finalized. She also noted the assurance that the county has a year of reserve funds, and that commissioners cannot obligate future boards to continue that practice but intends to keep that reserve fund full and has multiple layers of protection and security built into the plan.
Further, Birnie said as the project begins operating and has cash flow, “We will build up an additional reserve, probably in the equivalent of another year’s debt. It won’t remove our moral obligation to replenish the reserve, but it will make it an even more remote possibility that the county would ever have to do that,” he said.
Commissioners approved the authorization unanimously, with commissioner Jonathan Houck not in attendance due to county business at the state capitol in Denver.
“I really do believe this is the right path to take. It is a project that works on paper, and it’s going to work in reality,” said Puckett Daniels.
Breaking Ground
Gunnison County assistant county manager for sustainability and operations, gave the Crested Butte News an update via email last week that the financing was close to being finalized and construction would begin this spring.
“We have ordered long-lead equipment, and our team is securing pricing on every aspect of the project that they can,” he wrote. “Contractors will break ground in April and we will announce more details as we get closer to that time. “
Cattles said despite many federal grants having entered a period of uncertainty under the current administration, the various grant funds awarded to Whetstone have not been affected.
“We have not had any issues with grants for Whetstone, most are state-funded and the federal highway grant is unaffected at this time,” he confirmed.
Cattles also said the county will release periodic newsletter updates on the construction progress once it begins.