Financial issues loom in review of Basalt retirement community
February 5, 2013
BASALT – Two major issues are shaping up at the center of the discussion over whether a 148-unit retirement home should be approved in Basalt.
The applicant, the Aspen Valley Foundation, is going to have to prove it has the financial firepower to build the multimillion-dollar project. The foundation also is being pressed to show who will be its target audience.
Basalt Planning and Zoning Commission Chairman Bernie Grauer said he needs to know more about the foundation’s financial position given that it is proposing a project that he estimated would likely cost $50 million to $100 million. He is concerned about the foundation’s ability to complete the project as proposed. He doesn’t want to see the site abandoned, like many projects in the Roaring Fork Valley were during the worst of the Great Recession. He also doesn’t want the foundation coming back to seek more lenient terms from the town if it cannot handle the financial pressure of the project.
“The downsides could be pretty big if they can’t complete it effectively,” Grauer said.
Basalt Town Manager Mike Scanlon is pondering whether to hire a third-party expert to assess the financial ability of the foundation to develop the project, according to a memo prepared by the planning staff.
Foundation Executive Director Kris Marsh provided a written response to the town to assure it that the foundation has the necessary financial wherewithal to build the proposed Continuing Care Retirement Community.
The retirement community is proposed to be built in two phases that feature 78 independent-living units, 18 cottages, 28 assisted-living units for people who need occasional medical care, and 24 skilled-nursing units for people who require regular care. All units would be rented.
The 40-year-old organization was formerly the Aspen Valley Medical Foundation and served as the fundraising arm of Aspen Valley Hospital. It broke that relationship last year and expanded the scope of its mission of promoting health and well-being of Roaring Fork Valley residents.
The foundation would be the primary owner of the Basalt project and sign a contract with a management company for the day-to-day operations, according to Marsh. Her statement noted that the foundation has granted $6.7 million to nonprofit health and human service groups over the past 13 years and has donated $1 million in health-related scholarships.
A preliminary look by the town planning staff on the economic impact of the project indicated it would generate more income than it would consume in services. There would be “considerable financial benefit” from the construction of the project, assuming that the foundation would be required to pay its various building and development fees, according to the planning staff’s memo to the Planning Commission.
If the project is completed, it will at least “break even” for Basalt, with the cost of services rendered not exceeding revenues brought in on an annual basis, the memo said.
The second core issue is the foundation’s desire to have fees waived and requirements for affordable housing substantially reduced. Grauer said town officials need to know more about whom the project would serve and at what prices before it decides to waive fees and regulations.
Basalt’s master plan requires substantial contributions of affordable housing when a residential project is annexed into town boundaries. The annexation policy in the master plan requires 30 percent of all units to be deed-restricted for various income and asset ranges, and an additional 20 percent of the units should be deed-restricted, resident-occupied unit, with fewer restrictions on income and asset levels.
The housing requirement can be waived, the planning staff’s memo noted, when a project promotes civic uses and helps with broader community goals. Aspen Valley Foundation’s application offers to eliminate the entry fee for renters of 12 independent-living residences. All other units would include an entry fee.
“Their offer didn’t even seem to be in the ballpark of what our master plan calls for,” Grauer said.
He said he and other members of the Planning Commission are concerned about the precedent of waiving the affordable-housing requirement.
Some members of the council and Planning Commission expressed, at a joint meeting Jan. 22, concerns about waiving building and development fees, which could range in the hundreds of thousands of dollars, if the retirement community is too expensive for many Basalt-area residents.
In response, the Aspen Valley Foundation submitted material to the town that says it wants to “create a community that allows current residents of the Roaring Fork Valley with an option to remain in the valley throughout their life.”
But the foundation noted that the price of land and cost of construction is higher in the Roaring Fork Valley than most places, as is the cost of living.
“The price of residency at the Basalt (retirement community) can be expected to reflect these unavailable factors,” the foundation said. “The applicant is seeking all reasonable means to minimize costs of creating this neighborhood.”
In additional materials submitted to the town, the foundation acknowledges the retirement community’s entry fee and rents would be too expensive for some residents.
“This form of community housing cannot be categorized as providing affordable levels of housing and care to all income levels found in the Roaring Fork Valley,” the foundation said.
Grauer said the foundation is willing to eliminate entry fees on 12 of 148 units, or 8 percent of the total. That means, in his estimation, that 92 percent of the units wouldn’t be affordable for the “average Basalt citizen.” Grauer said he is feeling “very challenged” at this point to support exemption of the project from fees and affordable-housing requirements.
The Planning Commission’s review of the Continuing Care Retirement Community resumes Feb. 19. Once the Planning Commission makes a recommendation, the Town Council will take up the debate.