In this 2017 file photo, then-Telski CEO Bill Jensen discusses a plan to develop affordable housing in Ilium with San Miguel County commissioners at a July 26 meeting. Telski co-owner Chuck Horning told the Daily Planet this week that the project is on track to be completed by next summer. Also pictured is San Miguel County Commissioner Kris Holstrom. (Planet file photo)

When people consider potential locations for local workforce housing, Ilium Valley now springs to mind: There’s space, it’s close to town, there’s already a housing community there and the San Miguel Authority for Regional Transportation recently added a bus stop in the area. The problem is San Miguel County doesn’t currently own much land in Ilium, lacks excess funds to purchase land or develop housing, and is far from expert in the housing development business.

The majority of Ilium housing is located up Two Rivers Drive, where there are approximately 70 units — including single family, duplexes, triplexes and fourplexes — spread across the Two Rivers housing development, the Sunshine Valley condominium subdivision and the “Q lots.”

“A lot of the Q lots are still vacant and are owned by Telluride Ski and Golf, along with a number of individually owned properties,” county planner Kaye Simonson explained. “The county doesn’t own anything in that area.”

In 2017, Telski — one of the largest employers in the region — entered into a land agreement with the county to purchase 31 Q lot units with a zone population of 100 people. Simonson explained that at the time the county approved an exception agreement allowing Telski to own the land since the entity wouldn’t otherwise be considered a qualified owner under affordable housing regulations. That exception agreement was amended in 2019 to allow for a better unit mix.

“Affordable housing is our top priority,” Telski co-owner Chuck Horning said. “The Ilium Valley project still needs to go through (Ilium’s) Design Review Board process, and then we hope to start delivering units for summer 2022 occupancy.”

Simonson said development beyond Two Rivers Drive is “pretty much maxed-out” because what remains is Forest Service land, which is unbuildable land and open space. Over the years there have been conversations about land exchanges with the Forest Service, but no agreements have been reached.

She added the “church camp” property, located in the middle of Ilium Valley, is privately owned, though the county acquired most of the adjacent railroad right-of-way in 1953, when the railroad went into receivership. There’s potential to develop the county-owned piece of the property if water can be accessed, but the railroad is an important historic feature on the landscape and some may want it protected, Simonson explained.

In addition to private dwellings across Ilium, the industrial park includes “live-work units,” where companies house their workers during the week. Other buildings, like where the animal hospital is located, have dwelling units on-site. The county does own property by the Sheriff’s Office that could be developed for housing or expanded county facilities, but no plans are underway.

While there is infrastructure in place for the existing developments up Two Rivers Road, the biggest barrier to development is lack of infrastructure elsewhere in Ilium. Simonson explained that the Ilium PUD area — Two Rivers and the Ilium Industrial Commercial area — is actually an extension of the Lawson Hill PUD. While upper Lawson Hill accesses its water and sewer service from the Town of Telluride, lower Lawson Hill had to develop its own water and sewer systems partly because it’s expensive and difficult to pump sewer uphill. Lower Lawson Hill proceeded to secure water rights, developed its own water and water treatment systems, and now delivers those services to residents in Ilium, where they are overseen by the Ilium Property Owner Association.

“The county is not a water provider,” Simonson added. “There are organizations and entities that can be formed to provide water, but they have to get the water rights. Then they’ve got to find land for a treatment plant and install all the infrastructure.”

Six years ago, the Telluride Foundation undertook an inventory of land owned by the county, Telluride Mountain Village Owners Association, Telluride and Mountain Village and discovered that while there’s buildable land in Ilium, without infrastructure, development is costly.

“It’s also about density and capacity, which you need to keep projects affordable,” Telluride Foundation President and CEO Paul Major explained. “Time is money. The more time a builder spends working the process and figuring out — Is there water? Is there sewer? Can I get approvals? — they’re just spending money.”

Which is, in part, why the county is currently looking at creating a new and incentivizing Workforce Housing Zone District.

“Right now if you wanted to do a Lawson Hill/Ilium-type development, you’d have to go through a five-step PUD process,” Simonson explained. “The goal is to take a number of steps out of that process.”

She said the new district would be zoned primarily for housing with some associated community and public uses and would include development standards like requisite water and wastewater treatment systems, good road access, and geohazard mitigation.

“Where can we support people who want or are able to build housing?” Simonson asked. “We’re looking at our regulations and codes to see how we can help.”

The county planning commission and Board of County Commissioners will have a work session on Nov. 4 at 1 p.m. to discuss a draft of a Land Use Code Amendment for the Workforce Housing Zone District. On Nov. 17, the planning commission and board will host a joint hearing to consider its adoption.