The planned expansion of Village Court Apartments (VCA) in Mountain Village has come to a halt — for now. The addition of 49 new units in two separate buildings intended for rental has been waylaid by newly-floated considerations to make some, or perhaps all, of the new units available for sale to qualified area workers.
The idea to examine the possibility of making those units for-sale properties instead of rentals came from Mountain Village Town Council’s Sept. 5 retreat. Town staff had less than two weeks until Thursday’s town council meeting to develop financial, design, construction and other scenarios modified to fit a for-sale model.
Among the points drawn up in Town Attorney James Mahoney’s memo to council was how different financing would look should council decide conclusively to take the for-sale route.
“Financing for a government owned rental project is a completely different product than financing for a for-sale product,” Mahoney’s memo read. “There are also many variables to consider that we do not have information on yet, as the bank the Town has been working with has not had adequate time to provide this information nor has the Town’s bond counsel been able to fully review this project. We do know the interest rate will increase for this type of financing and that there are a number of steps that must be taken to be able to acquire such financing.”
Should the conversion from rental to ownership of the units take place, Mahoney explained that replatting and rezoning the lots on which the expansion is proposed would need to occur for both legal and financial reasons.
And, since staff has already received construction bids on the expansion project based on rental use, “this could result in bid changes,” Mahoney told council. “We should let them come back with different bids.”
In his memo to council, Mahoney wrote, “In the event the Town Council determines to make this direction change, an addendum to the RFP for contractors would have to be issued and time would have to be given for bidders to evaluate due to the schedule changes noted above and the fact that it is a different product with different insurance and liability concerns.”
The question is whether or not for-sale units as opposed to rental units would satisfy market demand. Given the quick turn-around between the council retreat and yesterday’s meeting, staff did not have sufficient time to determine that need.
“No market analysis has occurred for this direction change,” Mahoney’s memo explained. “Nearly two years of time, energy and money have been put into the existing project including a site specific housing needs assessment from Economic & Planning Systems, a Denver based consultant, premised upon rental housing supply. Without getting into the details of the assessment, it determined there would be sufficient market demand to reach full occupancy, addressed raising rental rates to boost revenue and confirmed the unit mix was appropriate.”
Members of the public — mostly current VCA residents — brought up a number of concerns.
Pam Pettee expressed support for the expansion to stick with its original plan to be rentals.
“It was a reasonable decision to build more rental units,” she said. “Is it (building a for-sale project) the best decision for Mountain Village?”
Other residents cautioned the town about “losing its touch” in regards to the many workers who reside in VCA and who relish a sense of community.
Resident Doug Ford voiced support for making the expansion an ownership opportunity.
“We need to attract talent that will make an investment in our community,” he said. “Ownership is one of the ways to keep people here. We can’t build a community without this.”
Council members were generally in favor of at least exploring the option further.
“It’s our fiduciary responsibility to at least consider it,” said Patrick Berry. “We need to determine if this is feasible. We have a long way to go.”
One of council’s newly-elected members, Peter Duprey, said he was motivated by a desire to help people “build equity” through home ownership. “But, we have a lot of bases to cover to see if this would work.”
Mayor Pro Tem Dan Caton wanted to see a market analysis of which option would fulfill the greatest need while acknowledging that the expansion project was effectively on hold until staff could complete work on a revised proposal.
“We’ve scratched the surface of answers to, ‘what is the market?’ and the market is clearly, for purchasing and renting. We’ve got way too many who want both. We need to do some investigation (of what people can afford).”
But, given the numerous unknowns he, like others on council, advised a measured timeline.
“I don’t see a shovel in the ground anytime soon,” Caton said.
Council member Natalie Binder said that without knowing what construction costs would be, it was challenging to see the full picture, especially as it related to the ultimate cost of the units. And she was concerned about preserving “the fabric of the community.”
Staff was directed by council to determine the increased costs associated with elements like financing, design and construction, poll current VCA residents on their thoughts on renting versus ownership and explore whether a mix or rental and for-sale units would be feasible, among other requests.