Town Council raises Brush Creek concerns with Gatesco

Water, occupants, density, internet [ BY MARK REAMAN ]

The developers of the proposed Corner at Brush Creek came to the Crested Butte Town Council on November 30 for a discussion and took some heat from the council and the audience. The major sticking points from those with concerns over the project continue to be the density, along with water and wastewater concerns, and whether there will be enough units dedicated to low-income workers. The Gatesco development team’s community relations director and project manager, John O’Neal, laid out the need for the housing project. “Crested Butte is a funky, authentic, real mountain town. We haven’t lost the magic yet. But as more second homeowners move in and fewer full-time residents and workers live here, we can lose it,” he said. “We lose part of our soul. It’s about the people.” “This is designed to be a nice place where people want to live and interact with their community,” added Margaret Loperfido of Sprout Studio Landscaping. Architect Andrew Hadley said the project “includes a mix of building types. The duplexes feel like Crested Butte townhomes. The eight-plexes that are closest to Brush Creek Road will look like the structures in that corridor with stone and natural color.”

“Density is a sensitive issue,” admitted Loperfido “We all agree sprawl is not good for the community. Clustered density is the alternative and there are lots of ways to measure density.” Gatesco attorney Kendall Bergemeister delved into the numbers and emphasized that, based on the recent Needs Assessment study, by 2020 171 units will be needed in the north end of the valley. He said it was realistic that this project could have 128 units built and operating by 2020 as part of the phasing schedule. He also emphasized that the proposed wastewater treatment plant that would service the project would be an enclosed facility similar to the one at Crested Butte South. Councilmember Laura Mitchell started the council questions by asking about the Gatesco reputation in Houston. Based on her internet research, she said it could be considered poor and the company might be prone to lawsuits. Gary Gates asked which specific lawsuit she was referring to. Mitchell said it was a general characterization. “I buy distressed properties and when we buy them, the crime rate goes down,” said Gates. “I never sell my properties.” Gates manages class-C workforce-type housing in Houston and said in similar properties there, the move-out rate is much higher than in his properties. Mitchell asked about water availability. “We think we can get water through wells on this site,” assured engineer Tyler Harpel. Later in the meeting, Eileen and George Gers, who own the property across the highway from the development site, said their well is only producing 15 gallons a minute, which is two-thirds of what it produced when first drilled 40 years ago. They asked, if extreme measures were taken to supply the new development with water, where would they and places like Riverland get water. Eileen said the expected water use in the plan was not high enough and that should be factored into the scale of the project.

Councilman Chris Haver said he understood the need for affordable housing but the proposal showed it would provide just eight units for workers making less than 50 percent of Average Median Income (AMI) in the first phase. The sketch plan calls for 16 such units at build-out. Fifty percent AMI for a single person would be $24,800. “My worry is that in ten years there still won’t be any place for people making that income level to live up here,” he said. “At build-out, what is your flexibility to grow the units in that lower end?” Bergemeister said the developers were looking at increasing the number of units for the low-income AMI demographic. “But the project needs to pass the underwriting requirements,” he said. “We are trying to figure out the number we can get up to for the lower-end AMI,” said Gates. “I’ve structured this project with the goal to try to be a help to the community,” said Gates. “There is no profit motive in this thing. I just want to break even and pay the mortgage.” “Why not make it less dense, then?” asked Mitchell. “As time goes on in this process the changes add to the cost of the project,” responded Gates. “We need 240 units to do the infrastructure and do it without government assistance.” Gates said with the HUD financing he would have to put up 15 to 25 percent of the equity. Councilman Will Dujardin asked how the developers would guarantee that the units were going to lower-income workers. “In terms of management and compliance, there will be an application and they will provide proof of income,” answered Bergemeister. “The Housing Authority will probably be involved and be auditing that. There will be enforcement. But it will be catch-as catch-can. You wouldn’t reject someone making 60 percent AMI hoping that someone making 80 percent comes in the next day.” “We will likely partner with the housing authority on the application process,” added Gates. “We are working with them now to develop the deed restrictions and make sure they are enforced.” Gates said the team has had conversations with the major employers in the valley like CBMR, Western State and the Gunnison Valley Hospital. “We talked about them using master leases and we can almost fill the 120 units on that alone,” he said. No master lease agreements have yet been signed as part of the project but such leases could reserve spots for employees of major employers and help with deposits. “I believe this project can largely be filled by people who live in Gunnison and commute up here,” said Gates. Haver asked if a market study had been done. Bergemeister said they were working on it. Councilman Kent Cowherd asked if ownership opportunities could be part of the development. “Right now the answer is no,” responded Bergemeister. He said the Needs Assessment indicated this much rental could be utilized and other projects, including many in Crested Butte, were addressing deed-restricted ownership. “You have to look at the portfolio as a whole,” he said. “It makes more sense to do a project of this size as rental.” Interim mayor Jackson Petito addressed the transfer of land issue and asked whose idea it was to sell the land for $100,000. Bergemeister said both sides agreed that was a good way to proceed to get a jump on potential financing. Gates said any land transfer would include a deed restriction that would limit what could be built on the site and nothing could be done if it didn’t match county LUR approval. Bergemeister said the county could buy back the property for $125,000 if the proposal doesn’t come to fruition. Gates recently agreed to the reduced buy-back price from the originally proposed $200,000 as “a show of good faith.” Bergemeister said Gates has already spent more than $25,000 on the project.

Mayoral candidate Jim Schmidt asked what the average rent would be across the project and if in less booming economic times there would be empty buildings sitting on the site. He also expressed outrage that the developers had sent what he called an extremely insulting letter accusing the council of essentially colluding with a renowned affordable housing expert to fabricate flaws in the project. “I would have expected an apology up front for that letter and I would like to know if Mr. Gates approved of the letter before it was sent and if that is the tenor of things to come,” Schmidt said. Neighbor Eliore Bilow brought up a new point, asking how bringing in hundreds of new people to the upper valley would impact internet service that can at times be sketchy at best. Councilman Paul Merck said people were making good points and questioned whether the location and density were appropriate but encouraged people to take their points to the county review process or talk to Gates directly. Mitchell was concerned with the lack of units addressing people making under 50 percent AMI and the lack of ownership opportunities. “It just doesn’t add up or feel right to me,” she said. Haver agreed with Mitchell’s concerns about the number of units for people in the lower income range. He was also unsure of the location for such a big project. “If there was property in Crested Butte or Mt. Crested Butte or even Crested Butte South that could handle this, would you consider building apartments there or are you set on this piece of land?” “For me it’s personal. I think you need to do way better than have 10 or 15 percent of the units set aside for low-income workers. That’s where I qualify,” said Dujardin. “The question now is, ‘Will you respond?’” asked Cowherd. “A lot of this has been said since the meeting at the Center for the Arts months ago. How we do this to match our community is important. The overall size, scale and density needs to be adjusted along with the AMI levels being brought down. Whatever you put out there will generate a profit of some sort over time. I’d like to see ownership opportunities, too. It feels out of balance. The proponents have a tremendous opportunity to bring the whole community together by responding to the concerns. Please do that.” “Thinking out of the box, perhaps if the density was better, you could maybe hook up to the wastewater treatment in town or with East River,” suggested Mitchell. “Let’s work so we don’t have to build another wastewater plant. To get there, make this less dense.” “And so the saga continues,” concluded Petito. And it did, as the next morning the Gunnison County Planning Commission spent a few hours driving around the valley looking at condo complexes before a meeting on the project was held Friday afternoon.