The Crested Butte News Serving the Gunnison Valley since 1999
Pre-application process continues
The Mt. Crested Butte Town Council agreed to release its share of the pre-application funds being used by the Gunnison Valley Regional Housing Authority to pursue a 30-unit affordable housing project in the town of Crested Butte.
Gunnison Regional Housing Authority director Karl Fulmer told the council at a meeting Tuesday, November 5 that he’s trying to collect a total of $85,000 from the towns of Crested Butte and Mt. Crested Butte and from Crested Butte Mountain Resort (CBMR). Fulmer even approached the city of Gunnison on November 12 about giving $5,600 to the project, which the council did.
Mt. Crested Butte’s financial commitment of $12,500 had been made contingent on equal or larger contributions from the other funding partners. In Fulmer’s original proposal to the council, he had CBMR contributing the same $12,500 the town was committing to the project, which still needs to be approved for low-income housing tax credits from the U.S. Department of Housing and Urban Development (HUD).
But while CBMR was considering the Housing Authority’s request for funding, the Town Council, believing the resort had already committed $12,500, put up the same amount of money.
However, after looking at all of the affordable housing commitments the resort already had on its books, CBMR general manager Ethan Mueller said they settled on a $7,500 contribution to the Housing Authority.
“Obviously we want to be supportive of a project like that. We see it as a good thing for the valley in the short term and long term,” Mueller said. “Our challenge was twofold. We have a lot of affordable housing requirements that need to be met per agreements we have with the town, so we really need to be responsible to those. And there’s the fact that right now we’re putting the majority of our resources toward marketing and sales initiatives to get load factors in the air program back up.”
Since Fulmer said the Housing Authority would fill the gap and the council wasn’t being asked to provide any more money for the pre-application venture, Mt. Crested Butte Mayor William Buck signaled that the council was still willing to put up the town’s share whenever Fulmer needed it.
But Councilman Danny D’Aquila, after looking through the project proposal, had a few questions about the $600,000 being paid out to the project managers.
“So the construction management fund is a set amount of 12 percent of overall cost of $3.4 million?” D’Aquila asked. “That seems substantial for an affordable housing project. We’re not building high-end homes.”
Fulmer explained that the $600,000 development fee detailed in the proposal is actually two separate fees—a construction fee that is 12 percent of the hard building costs and a 12 percent developer’s fee.
“These fees are based on what the federal government and the tax credit program deem acceptable for this type of project and they’re both set at 12 percent,” Fulmer said. “The Housing Authority will take at least one-third of that fee for being the managing general partner on the project. We’re negotiating that right now and it could be 33 percent, it could be 45 percent. What we would do with that money is put it in a development fund to be used as seed money for future development projects in the valley.”
The remaining money will be divided between Coburn Development and Ohio-based developer Snavely Group, which has experience with the Low Income Housing Tax Credit program. Then Fulmer added, “That way we don’t always have to come before the municipalities to ask for seed money in the future.”
Buck said he was comfortable with the development fee, saying, “The developer fee, for the size of the project, which is clearly time-consuming, is not outrageous. A normal development fee can be three times that.”
With that, the council agreed to release the $12,500 they had committed to the Housing Authority so Fulmer could continue the pre-application process.
