Town considering how to regulate timeshares

More discussion over stringent ordinance

by Mark Reaman

Eight months and eight drafts of the proposal later, the Crested Butte Town Council is almost ready to approve a new ordinance dealing with “timeshare” developments in town. A public hearing on the issue is scheduled for July 21. The town’s attorney, John Belkin, told the council this might be “one of the most stringent (timeshare) ordinances in the country.”

The lengthy ordinance was spurred due to a proposal for the “Sixth Street Station Project” that includes fractional ownership of residential units. The project would include an approximately 40,000-square-foot hotel with 21 luxury suites, which essentially include 47 “lock-off” rooms. Each suite could have up to 12 “fractional” owners. The proposed development, located on the north side of Crested Butte, also includes retail spaces and underground parking.
The proposed timeshare ordinance mandates that unused rooms be part of the rental pool available to the general public. It oversees some marketing and sales practices by not allowing solicitation on the streets to sell the ownership units, requires that a Timeshare Disclosure Statement be provided to prospective buyers, requires that a separate fund be set up specifically for management and maintenance, and requires meeting space as part of any such projects.
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As a memo from town building and zoning director Bob Gillie states, “There are many other provisions in this ordinance. Those include many technical and procedural issues… It would be difficult to go into all the provisions. The council should make an attempt to read the ordinance and come up with any questions they may have. No, this is not light reading, but try.”
As with any of their discussions on the matter, the council’s main goal was to promote “hot beds” or hotel-like beds into the Crested Butte mix.
During the regular Town Council meeting on Monday, July 7, councilmember Dan Escalante wanted to include a guarantee that some rooms would always be available for rent, a concept that’s been discussed by the Town Council several times. He suggested that 20 percent be mandated.
“I want something that looks and feels like a hotel instead of a private club residence,” he said.
While she understood the council’s goal, town manager Susan Parker said this wasn’t necessarily the right project to achieve that goal. “If the council’s goal is to get hot beds only, how do we do that? Do we offer a developer affordable land to build a hotel instead of trying to fit a square peg into a round hole?”
Mayor Alan Bernholtz admitted the discussion over fractionalized ownership has been long and complicated. He said since the proponents were asking the council to amend some rules to allow timeshares in the project, the town should see some new benefit as well. “The developers of the Sixth Street project asked us to bend our rules to allow timeshares and we asked them to provide a tourist type of amenity,” said Bernholtz.
Councilmember Leah Williams said the ordinance does provide for allowing hotel-type rooms. “We have assurances in the ordinance that when the units are not being used by owners the rooms will go into the rental pool,” said Williams.
“I agree with Leah,” said councilmember Kimberly Metsch. “I too am concerned about hot beds, but this proposal doesn’t allow owners to not put their units in the rental pool.”
“The fact of the matter is no one knows how it will work out,” added Gillie. “That’s why we have a reporting section in the ordinance. This is something we will learn from. If you insist on including a usage percentage, it will be a big issue with the proponent.”
“I believe we should keep it simple,” chimed in councilmember Skip Berkshire.
Escalante persisted in trying to put a provision in the ordinance that forced some rooms to be available for rental at all times. “My personal experience with timeshare properties is that we won’t get hot beds during the busy times if we don’t make it happen,” said Escalante.
“You are probably right, and you won’t get hot beds for the Fourth of July or Christmas,” said Gillie, “but the beds will be used.”
Bernholtz said that as long as rooms were available for the general public to rent, he didn’t feel a required percentage was necessary.
“That’s okay,” said Bernholtz. “They’re asking for something and we’re asking for something. But we don’t need to ask for the best car on the lot.”
Councilmember Billy Rankin was worried the council wouldn’t get any car on the lot, and pushed for the stricter requirement. “If we bend over backwards every time they balk, we won’t get anything we want,” he said. “I feel like every time we ask for something, they wave their magic wand and we suddenly understand why what we want isn’t reasonable.”
The Sixth Street Station developers were not at the meeting. Crested Butte/Mt. Crested Butte Chamber of Commerce director Christi Matthews said having people in the rooms, whether owners or renters, was the important thing.
“Do you want a room with a person in it who will eat in the restaurants and shop in the stores, or do you want a room that is empty but available for someone to rent?” she asked. “It seems to me we need people in those beds.”
Bernholtz understood Matthews’ point. “We need to do something with this ordinance to make the town a better place,” said Bernholtz. “We need people in our town. That is good for the economy and tourism.”
Berkshire wanted the council to look at the big picture. “As far as the Sixth Street Station, let’s not get totally fixated with the timeshare aspect,” he said. “It’s an integrated development that brings a lot to the table including underground parking and some new retail space. Having more retail space in town should help keep retail rents down.”
Board of Architectural Zoning and Review chairman Keith Bauer said BOZAR had discussed the ordinance and the members were comfortable with it. “This is a test,” he said. “We can’t look into the crystal ball and see how it all ends up.”
The council did not put in a requirement for a specific availability percentage but they did set the ordinance for public hearing on Monday, July 21.