One wrinkle holding up Basalt project
September 29, 2014
Three major projects that could yield at least 130 affordable-housing units are being pondered in Basalt, but their fates remain too murky to tell when any of them will be built.
The largest of the three projects, the 56-unit Roaring Fork Apartments, is down to one issue to iron out, but it's a complicated one, according to Basalt Town Manager Mike Scanlon.
The other major affordable-housing projects looming in Basalt are a 50-unit building at Willits Town Center and a 24-unit project being contemplated by Pitkin County and Aspen Skiing Co.
The Roaring Fork Apartments, proposed by RealAmerica Development LLC, is along Highway 82 next to Stubbies. The private development firm, headed by Ronda Weybright, purchased the property in April, secured approvals from Basalt and now is working on an agreement that would satisfy the lender of a construction loan.
Scanlon said the bank requires an "exit strategy" in case it needs to foreclose on the project. If RealAmerica defaults on its loan, the lender wants Pitkin County and Basalt to agree that they will waive deed restrictions on the project, according to Scanlon.
The proposed project has 20 units dedicated to renters in the lowest income category. The other 36 units are also geared toward low-income individuals and families. The limit on rents also limits the revenue.
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Roaring Fork Apartments are projected to cost about $14 million to build, according to Scanlon. The deed restrictions on the 56 units would produce only enough revenue to qualify for about $5.5 million in bank financing, he said.
If the two governments agree to waive the deed restrictions should the property go into foreclosure, more financing will be available, Scanlon said. Attorneys for the two governments, the developer and the lender are trying to hash out language of an agreement. Scanlon said he is "90 percent" certain the project will advance.
If so, the governments will sign an agreement to purchase the units from RealAmerica, Scanlon said. RealAmerica would build and manage the project and initially own the land. The governments would buy out the land over time, according to Scanlon.
Basalt would own about 40 percent of the project, or 22 units. Basalt would use financial tools called certificates of participation to fund its purchase. Rent revenue would back the certificates, Scanlon said.
An agreement among the governments, developer and lender could be hammered out by early October, Scanlon said. That would allow construction to start this year.
There is already a concrete foundation at the site. The previous owner had approval to build a hotel. The foundation was poured, but then the recession struck, and the developer couldn't continue with construction.
Scanlon said the apartments could be finished within 12 months of starting, thanks to the foundation already being there. That reduces the construction time.
The future is less certain for a proposed 24-unit project Pitkin County eyed in a different part of the Basalt area. The county signed a contract in July to purchase 11/2 acres of land from Skico for $1.4 million. The land is on Southside Drive, the street that serves Basalt High School. The county and Skico tentatively talked about teaming to develop the 24 units.
The status of the project is up in the air because the county's appraisal of the land was lower than the negotiated purchase price, according to Scanlon.
Construction of the 50 affordable-housing units at Willits Town Center appears to be more certain. Willits developer Mariner Real Estate Management broke ground in September on a 115-unit hotel at Willits. It pledged to start work on the affordable housing by the time the hotel opens.