Late snag threatens Basalt housing project
November 27, 2009
BASALT – A partner in a development firm that wants to build 110 residences in Basalt claims conditions placed on the approval by the town council are a potential “deal killer.”
Briston Peterson asked the town government Tuesday night to extend the vested rights for the Stott’s Mill project from the standard three years to five years. Vested rights keep the approvals for a project intact even if construction doesn’t start.
The economy might not turn around in time to make it feasible to start construction within three years, Peterson said. “We feel strongly that three years vesting is failure right out of the gate,” he said.
Peterson wanted the extension to five years with no strings attached. The council attached strings.
The five council members attending the hearing said they would grant the extension to five years, as long as Peterson’s development group signs a contract committing to complete the infrastructure and public amenities connected to the project within five years.
“I still think it’s a semi-deal killer,” Peterson said.
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The development group approached several lenders and produced letters from two of them that said they wouldn’t finance a residential project the size of Stott’s Mill in today’s market if the vested rights were only for three years. Donald Hannon, business banking manager at Wells Fargo, wrote in a letter that it will take time for residential real estate to start selling again in the Roaring Fork Valley.
“There is a lot of housing inventory on the market that is not moving and we believe it could take years for it to be absorbed,” Hannon wrote to Peterson. “To complicate the issue, residential mortgage underwriting standards have tightened drastically. This makes it even harder for potential buyers to obtain financing.”
Peterson implied that he and his partners in Brikor Development LLC could also run into trouble if the council required a commitment to finish public amenities associated with the project.
Stott’s Mill is proposed along Southside Drive, the road to the Basalt High School. It features 33 deed-restricted, price-capped units; 15 “resident occupied” units with appreciation caps that must be sold to full-time residents of Basalt; 53 resident-occupied units without appreciation caps; two units that will be dedicated to the downvalley school district; and the seven free-market units. When completed, the project will also include a 3,300-square-foot day-care facility and a 4.5-acre park. Other public amenities include a roundabout.
The council has been generally supportive of the project because it will add substantial affordable housing. The board voted 6-0 to grant final approval in the first reading Oct. 27. The snag was hit during second reading of the final approval on Tuesday.
Mayor Leroy Duroux said he didn’t want to set the project up for failure, but he also felt the town was being flexible by extending the vested rights to five years.
Councilman Chris Seldin said it is impossible to know what the economy will do in the next three to five years. He said it was reasonable for the town to protect its interests by requiring certain amenities to be finished within a certain time.
The council members clearly wanted some guarantee that the project won’t get started, run into financial trouble and stall with half-completed public amenities.
Peterson said his team will be eager to build as soon as it is feasible. He urged the council to let the market take its course without placing requirements on him.
“I think you’re being penny-wise and pound foolish here. I really do,” Peterson said.
Seldin responded, “I hear ya. I know what you’re saying. I disagree.”