CB Hostel Workforce Housing Initiative Canceled – The Crested Butte News
Everyone did their best but…
[ by Mark Reaman ]
Despite thousands of dollars and dozens of hours spent trying to convert the former Crested Butte Hostel into long-term affordable housing, the investor group of mostly second homeowners who put the building under contract this summer has terminated the contract on Friday, October 22.
“Everyone involved is disappointed that a deal couldn’t be reached,” said local businesswoman Kyleena Falzone who, along with about half a dozen North Valley secondary owners, made up the group of investment. “We had local businesses lined up to fill the beds with their employees. While we had hoped that a management agreement could be reached with the Gunnison Valley Regional Housing Authority (GVRHA), they were unable to commit to a long term agreement and we were unable to find other investors to intervene. secure the deal.
In a bid to provide seasonal accommodation for local workers, Falzone and the investment group had come together to put the hostel building under contract last August. Located at 615 Teocalli Avenue, it had been listed for sale for $6 million. Depending on the configuration, the hostel was expected to provide between 33 and 41 beds with two two-bedroom apartments and 14 dormitory-style rooms.
“We thought we could make it happen and even though no one in the group expected to make any money on this deal and actually thought we might lose a bit considering the costs, no one wanted to lose a lot of money. money either. The group of investors have worked hard to prepare to close the building this fall,” Falzone said. “We formed our partnership, prepared a long-term lease for GVRHA to manage the property, and completed all physical inspections.
“We spent thousands of dollars and hundreds of hours on these activities assuming that we could structure a deal with GVRHA that would make sense to the group of investors,” Falzone continued. “After many hours and many meetings, we reached a point where the two parties could not agree on certain provisions of the lease. Both parties were determined to make it happen, but in the end the gap was too big to close and as a result the group of investors were forced to terminate the contract and will not buy the hostel.
Under Colorado’s Taxpayer’s Bill of Rights (TABOR) amendment, government entities cannot sign contracts longer than one year. The group of investors was hoping for a five-year commitment to move forward. While not the only hurdle, Falzone said it was a major hiccup and the one that killed the deal.
GVRHA Executive Director Jennifer Kermode confirmed that state law prohibits signing a long-term lease on the building. She and GVRHA board chairman Roland Mason said as they hoped such a ready-made idea would come to fruition to add another project to Crested Butte which helped relieve some pressure on workforce housing, restrictions on the Housing Authority as a public entity did not allow this.
“It is unfortunate that we were unable to reach an agreement to convert the hostel into an immediate relief valve for workforce housing,” Mason said. “I greatly appreciate the initiative and passion the investors have shown in making this project work. I hope that the efforts in this endeavor will provide a roadmap for future private-public social investments.
The public-private aspect also attracted the real estate agent involved in the transaction. “Everyone involved in this was excited about the public-private partnership element,” said local realtor Diane Aronovic of Bluebird Realty who helped coordinate the deal. “There are a lot of people who don’t live here full time but love Crested Butte and want to explore options to help the situation instead of having to pay a second homeowner’s tax for example. We all get so much more out of it when it’s by choice rather than mandate.
Crested Butte Town Manager Dara MacDonald said the town was not directly involved in the sale, but was keeping tabs on it in hopes it could be another place to provide housing. in town in time for the next ski season. “The City truly appreciates the efforts of Kyleena, Diane Aronovic and investment partners who have made positive and proactive efforts to help address the housing issue,” she commented. “Unfortunately, the deal didn’t go through this time, but it’s heartening to know that so many members of the community are working on solutions. I remain hopeful that together we can find solutions to house employees and the working families who are so essential to our community.
Falzone agreed and is not ready to give up on the task. “I’m passionate about housing because everyone should have it,” she says. “Everyone tried their best for it, but it didn’t work out.”
She said if there is a positive side to the situation, it is that new relationships have been formed and people want to solve the housing problem. “Investors want to keep trying to help the labor housing shortage and we are already looking at the next potential project,” Falzone concluded.