The developer of Willits Town Center claims construction of a hotel will be delayed “indefinitely” if the Basalt town government forces it to build affordable housing before the company is prepared.
Mariner Real Estate Management wants to build a 113-unit hotel a couple of blocks south of Whole Foods Market. Mariner is working with a partner that has obtained a letter of intent from Starwood Hotels to establish an Elements by Westin hotel at Willits.
Mariner needs the town government to tweak the land-use approvals for Willits Town Center to allow the hotel in that location. The Basalt Planning and Zoning Commission resumes its review of the project at 7 p.m. today at Basalt Town Hall.
The biggest hurdle that’s arisen is over the developer’s affordable-housing requirements. The approval spells out that when development reaches a certain level, it triggers the need for affordable housing. The hotel building is also tied to additional affordable-housing requirements.
Mariner wants the town government to ease up on the deadline. In return, it will build more affordable housing sooner than required. It plans to build 50 affordable-housing units in a complex adjacent to the hotel. However, Mariner wants flexibility on when it starts construction on the affordable housing.
A consultant for the town government, Bruce Kimmel, of Ehlers Inc. — a company that specializes in public finance issues — advised Basalt to keep a connection between the hotel and affordable housing.
“There has to be some skin in the game,” Kimmel said.
He recommended that the town require a $2.8 million escrow or letter of credit from Mariner to create a “lock box” fund. If Mariner starts work on the affordable-housing units prior to the finish of the hotel, it can use its funds from the lock box, Kimmel said.
If construction of the affordable housing isn’t underway by the time the hotel opens, the town could use the lock-box funds for its own - housing project, according to Kimmel’s memo to Basalt officials.
“Ehlers believes that the prospect of losing $2.8 million in cash should be adequate incentive for Willits Town Center to ensure the (affordable) housing is underway before the hotel receives its certificate of occupancy,” Kimmel wrote.
Mariner’s local representative, Tim Belinski, submitted a statement to the town that presented a different perspective on the housing. He noted that Kimmel’s list of recommendations on various aspects of the project is “reasonable” with the exception of the affordable housing conditions.
The housing alternatives proposed by Kimmel “are unacceptable and would delay development of both a hotel and affordable housing indefinitely,” Belinski wrote.
“An indefinite delay of a Starwood branded hotel would be a missed opportunity for Basalt,” he added. “Delaying affordable housing certainly runs counter to the town’s goals.”
Belinski said the Willits Town Center owners would pledge to construct the affordable-housing building after the hotel is completed. But the project needs to build up business for a while before Mariner can sink the funds into affordable housing, his memo suggested.
“Retail leasing has not been as robust at Willits as projected, which is why other catalysts are needed, be it (the new) Valley View Hospital (offices) or the proposed Element hotel,” Belinski wrote. “Adding retail, office space and hotel guests increase the vibrancy of the project and the area — including downtown retailers and restaurants.”
Mariner has constructed three buildings in three years and has made numerous infrastructure improvements, Belinski said. It wants to keep progressing with the project as quickly as possible, so it already has incentive to complete the affordable housing building.
Belinski stressed that Mariner isn’t asking to reduce or eliminate deed-restricted housing. In fact, it would be providing about three times the amount required at this point of the overall development when it builds the 50 units, he said. Mariner has an overall commitment to build 60.5 affordable housing units in addition to the six it has provided already.
Kimmel countered in his memo that he understands Mariner’s perspective, but he is sticking to his recommendation to the town. Establishing the recommended $2.8 million escrow account for affordable housing won’t render the hotel project “unviable,” Kimmel wrote.
“Willits Town Center has offered no evidence of its inability to make this form of housing deposit, and so we must conclude that it is simply unwilling to secure its plan to fulfill its affordable housing obligation within a define timeframe,” Kimmel wrote.