Basalt explores selling six affordable housing units in Snowmass to boost its program’s bottom line
February 3, 2019
Basalt town government is contemplating boosting the financial bottom line of its affordable-housing program by selling six affordable units and paying off a line of credit.
The town is looking to sell the Shining Mountain property in Snowmass that it acquired from Rocky Mountain Institute in February 2015. RMI needed help paying for about $1.2 million in land costs and improvements affiliated with construction of its Innovation Center in Basalt. Mike Scanlon, who was town manager at the time, negotiated an agreement where Basalt covered those expenses in return for RMI handing over the six affordable-housing units to the town government. The town carries no debt on the housing.
All six of the units are two bedrooms and around 1,000 square feet. The town charges $1,400 per month for four of the units and $1,000 and $1,200 for units in a duplex.
The town can legally sell the units because they don't have a deed restriction. The only promise made to RMI at the time of swap was its employees had first dibs on the units for two years, then they could be rented to anyone.
“I just worry about the people that are there now.”
— Basalt Councilman Gary Tennenbaum
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"We never said we would keep it," Councilman Gary Tennenbaum said of the swap with RMI. The town said it would use the Snowmass housing in the "best way," he said.
He suggested the town provide plenty of notice to the tenants before they try to sell it. In reality, he said, the six affordable-housing united would likely be "scraped" and a large, luxury home would be built.
"I just worry about the people that are there now," Tennenbaum said.
According to a town's database, most of the residents at Shining Mountain work for local governments or nonprofits. The tenants include employees of the town of Basalt, Pitkin County, Aspen-Pitkin County Airport, Roaring Fork Transportation Authority, Habitat for Humanity Roaring Fork and a private sector property maintenance firm.
Finding comparable housing would be next to impossible, regardless of how much time they get to look.
Town Manager Ryan Mahoney said the leases are coming due in six months. Tenants are aware the town might sell the property, he said.
"This wouldn't be news to them," Mahoney said.
Basalt's affordable-housing committee discussed options in December for keeping the units affordable, according to a memo to Town Council. Options include placing a deed restriction on the property prior to a sale or targeting other governments as the purchaser.
The council didn't discuss if it had a moral obligation to keep the Shining Mountain units in the town's affordable-housing inventory. A study commissioned by the town in 2015 said Basalt needed to build at least 200 residences in the next five years to meet demand.
The town will soon own 19 units from Willits Town Center to Snowmass. Scores of other affordable-housing units were built by the private sector as mitigation for development.
Mahoney said Basalt's affordable-housing program for units it owns was projected to lose about $190,000 in 2018. A lot of that loss is due to paying principal and interest on a line of credit to acquire housing.
Mahoney told the council that paying off the line of credit and selling the Snowmass units would bring the housing program into the black. Maintenance on the Snowmass units is particularly high because the town's public works department travels to the complex to plow the roads, he said. The town must also maintain 7 irrigated acres at the site during warm-weather months. The housing site is about 1 mile off Highway 82 on Snowmass Creek Road.
Without Shining Mountain, the affordable-housing program would have an estimated $182,400 in operating revenue, according to the town staff's calculations. The program's operating expenses without Shining Mountain and without a line of credit would be about $101,000. That would result in net earnings of $81,400 from the program.
"I'm on board with selling those Old Snowmass units," Councilwomen Jennifer Riffle said at the Jan. 22 council meeting.
The Shining Mountain property was appraised at $1.2 million in 2014. A new appraisal has been ordered.
In return for handing over the keys to the housing, RMI was off the hook for paying $595,000 for the town-owned property it acquired, $520,700 for public improvements such as parking and alterations to Two Rivers Road, $93,500 to build the site up with dirt and rock to get it out of the floodplain and $41,000 in various development fees.