town council

Telluride Town Council member Jessie Rae Arguelles at Tuesday’s council meeting in Rebekah Hall. (Photo by Suzanne Cheavens/Telluride Daily Planet)

It’s an ambitious project, and one that would, in the eyes of many Main Street merchants, create an anchor business at the east end of town, enticing visitors to walk the entire length of Telluride’s downtown area.

But for the planners of the Ajax Hotel project, which will — once completed — occupy the vacant lot on the southeast corner of East Colorado Avenue and Willow Street, securing funding has proven challenging. So challenging that at Tuesday’s Telluride Town Council meeting developer Randy Edwards asked for an extension of the project’s Certificate of Appropriateness, or vested property rights.

According to James Van Hooser of the town’s planning department, “The applicants have noted it has been difficult obtaining financing.”

According to a staff memo to council, the applicants submitted an explanation for the request.

“Financing pursuits during 2017 hit a wall when a foreign investment group was unable to close after more than six months of waiting due to issues with repatriation of foreign funds,” the memo reads in part. “The struggle for the financing of this project continues to be the hotel component that unfortunately hasn’t attracted the right investor yet.”

The original certificate is good for three years, and was set to expire on Dec. 10. The extension, which council approved 5-2, is for one year. Extensions of up to three years are permitted under town code.

By granting the extension, the developers will not have to modify their plans to incorporate changes to the town’s Land Use Code (LUC), which have occurred since the project’s original approval. Those changes would increase the project’s employee housing mitigation and affect the height of the hotel.

The parcel — one of the largest remaining vacant parcels in town in the commercial zone district — lies outside of the Telluride Historic Landmark District. All told, it is a half-block parcel with 10 lots, though the project’s developers plan to combine those lots to accommodate the hotel and related dwellings.

As reflected in the vote, some members of council held limited sympathies for Edwards’ inability to attract investors to his project, which includes a 50-bed hotel associated with the Starwood-Marriot group properties, deed restricted housing and free market condos.

Council member Jessie Rae Arguelles was blunt.

“Your funding issues are not our problem,” she told Edwards. “The new LUCs should apply to this project.”

But most on council saw benefits to the construction of a hotel on the east end of Telluride’s commercial core.

“We’ll be shooting ourselves in the foot if we don’t approve the extension,” said Tom Watkinson. “Let’s give it one last shot.”

Mayor Sean Murphy, who once operated a wine bar and art gallery on the east end of Main Street, said that an anchor-type business, similar to the New Sheridan restaurant and hotel complex on the west end of Colorado Avenue, would be a boon to businesses close to the proposed Ajax Hotel.

“A project of this nature is integral to having a functional business district,” he said. “Having a property like this is invaluable.”

Council member Todd Brown agreed, calling the project “hugely beneficial,” and argued that the project as originally approved met the employee housing and parking requirements of the town’s land use code. The new LUC, he pointed out, would have required only about 600 additional square feet of employee housing to the project’s mitigation requirements.

Elena Levin, a Colorado Avenue business owner (Ghost Town coffee shop and grocery) and a member of the public at Tuesday’s meeting, said she could see both sides of the issue, but hoped council would take into account the LUC revisions for additional employee housing square footage and modified building height requirements. But she admitted that, “there’s an inactive zone down there. It’s a good use of the space. It could be a vibrant addition.”

Council ultimately decided to grant the extension with only Arguelles and Geneva Shaunette casting opposing votes.

In other council news, Public Works Director Paul Ruud gave a brief presentation to council about the impending fee increase for the water treatment and wastewater treatment plant’s services beginning in 2019. His department has undertaken two studies — one for water and one for wastewater — to support the need for a rate increase.

“We need to increase revenues so we can make improvements,” Ruud told council.

He said that a 30 percent increase for water treatment and a 70 percent increase for wastewater treatment would result in a $52 per month bill. He said additional revenues, such as a bond question next year, could be on the table to fund the improvements needed at the wastewater treatment plant. At a recent intergovernmental meeting, Ruud also has floated the possibility of creating a sanitation district so that mill levies could also be employed as a funding mechanism. The $52 per month was a number he said, “We hope everyone can afford.”

This was the second and final reading. Propelled by concerns expressed by some members of council that the increased fees may adversely affect those living on fixed incomes or facing other economic hardships, staff will prepare an outline of possible exemptions for council to consider in January. The rate increase was unanimously approved by council.