Another expanding mountain town

BASALT - About 25 years ago, the first developers to eye a big housing project in Basalt threw a weekend carnival to draw attention to a model home in their fledgling Basalt South subdivision.

Something clicked, although it was probably the affordable housing prices rather than the Ferris wheel and pony rides. Basalt South became the wildly popular Elk Run subdivision that initially provided a great alternative for working families who were priced out of Aspen's inflated housing market.

Today, developers and property owners in the chic Basalt market don't need carnivals to sell homes. The supply is so scarce and the demand so great that housing, particularly single-family homes, gets snatched almost as soon as it hits the market.

In the Willits subdivision, one of Basalt's newest, home prices started topping $1 million in January. The previous high sale in Willits was $770,000.

On Riverside Drive, along the Fryingpan River, homeowners that typically invested around $125,000 in their lot and single-family home 20 years ago are now watching values push $2 million.

There were 33 sales of single-family homes in and around Basalt for more than $1 million last year, according to statistics tracked by the Aspen-Glenwood Springs Board of Realtors. Those kinds of sales are changing the complexion of who is buying.

As outside developers and well-heeled home buyers take increasing interest in Basalt, so are current residents beginning to resist the pace of change. The election of a new slow-growth majority to the Basalt Town Council signals a new and possibly contentious period in the once-quiet middle Roaring Fork Valley.

'Tremendous' pressure

With the hot market, it should come as little surprise that development proposals are stacked up for review at Basalt Town Hall. Every open piece of ground within Basalt's urban growth boundary - an area deemed appropriate for development by the town's growth policies - seems to have a development proposal connected to it.

Four projects seeking approval for 250 residences and 230,000 square feet of commercial development are under review.

Basalt Town Councilman Chris Seldin labeled the growth pressures facing the town "tremendous." Seldin was elected to office in April 2006 along with Gary Tennenbaum and Amy Capron. All three candidates campaigned on a slow-growth platform.

When elected, they became part of a new council majority that was prepared to vote against two development proposals - the Roaring Fork Club expansion and Sopris Chase - because they didn't comply with growth policies

The Roaring Fork Club wants to expand onto the Meyer family ranch, just east of Elk Run subdivision. The Sopris Chase developers want to build 115 residences just downvalley from Basalt High School. The project included 55 affordable units with deed restrictions to ensure they remain affordable.

Both projects were outside the town's urban-growth boundary. Seeing that they would be on the losing end of any council vote, both developers pulled their applications before official action was taken.

The council's actions have triggered a healthy dose of debate in Basalt about the best approach to growth. Preserving small-town character was among Basalt residents top concerns in a 2005 community survey.

Critics of the slow-growth council contend its actions limit supply and drive up prices of housing and other property.

"With the no-growth attitude of some of the deep thinkers in Basalt, there is more value today than there was before," real estate agent Wendy Lucas said. "When you restrict building prospects, values are going to go up."

Seldin called it a "fantasy" that restrictions have had a huge impact on Basalt's prices. As the Vail and Eagle County market show, prices still soar even when there are fewer restrictions, he said.

Seldin said the challenge for Basalt is to keep housing affordable without sacrificing qualities that make the town attractive for so many residents, like rural buffer zones and open space. In other words, Seldin isn't willing to allow sprawl to try to keep housing affordable. Besides, he said, there is no guarantee developers will build affordable housing if the council simply approves a lot of projects.

"To me, raw supply is not the solution to that demand," he said. "You could have sprawl up and down the valley and still have home prices over $1 million."

In a 2005 survey of residents, 39 percent of respondents said they wanted less development than they currently had and 34 percent said they wanted about the same amount, Seldin said.

Carrying capacity

But former Mayor Rick Stevens questions if Seldin and some of his colleagues really have a mandate. The turnout in the 2006 election was the lowest in Basalt since 1994, he noted.

The growth foes "pushed their agenda through and the rest of us were sleeping," said Stevens, who was mayor from 1994 to 2004. He left office because of term limits.

"'What's happening to my small, quirky town?' I've been hearing that since I moved here," Stevens said.

Usually, he said, it is recent arrivals who want to keep the town the way they found it. Longtime residents are more accepting of change, since they have experienced so much of it. Often the newcomers who want to keep things the same are oblivious to the fact that their very arrival helped change Basalt, altering the town for people who lived there before they did, he said.

Stevens believes Basalt can and should accommodate more growth. Like it or not, it is a popular place among people who are being attracted to the Roaring Fork Valley, such as retiring baby boomers with high disposable incomes and young professionals who can buy a free-market house immediately and not scrounge for whatever affordable housing they can find, he said.

If Basalt doesn't accommodate more of the people who want to live there, it will just promote sprawl and growth pressures further down the Roaring Fork Valley toward Glenwood Springs, Stevens said.

Growth restriction poses as great a threat to Basalt's small-town character as growing too much. If Basalt evolves into a high-end resort, its small-town character will deteriorate, he said.

Jacque Whitsitt, a growth-control advocate and former Basalt councilwoman, wants to set definite quotas on growth, not only in Basalt but throughout the Roaring Fork Valley. She said regional growth policies should be established.

"Everybody is allowed to approve their own plans - polluting the air and congesting the highway," Whitsitt said.

She wants to determine the Roaring Fork Valley's "carrying capacity" so decision-makers will know how many people can be accommodated without sacrificing the quality of life, she said.

In Whitsitt's scenario, development approvals would have to be coordinated between valley governments.

That level of cooperation seems unlikely, given the differences of opinion between jurisdictions. Right or wrong, governments make most decisions based on what's best for the people within their borders, despite the potential impacts on their neighbors.

Aspen, for example, is considering stricter growth controls. If those are approved, Stevens said, Basalt will face greater growth pressure.

Big money comes to town

Real estate investment groups have been interested in Basalt since at least the time the Elk Run developers held their carnival in the early 1980s. But for the most part, they have been developers from Aspen.

Aspen real estate brokers Dale and Sally Potvin developed the South Side subdivision in the late 1990s; architect Michael Lipkin wrestled with Eagle County and Basalt officials for years before securing approvals in several phases for the commercial-residential Willits project earlier this decade.

The market changed about 18 months ago, said Glenn Rappaport, an architect and member of the Basalt Town Council. Even small real estate opportunities in Basalt are now potentially lucrative enough to lure investors.

A case in point is the Green Drake Inn. The well-worn, 25-room hotel on Basalt's main drag sold for $4.4 million last month to an investment group headed by Aspen architect Charles Cunniffe. His group paid $2,875,000 more than what the previous owner paid for the hotel 3 1/2 years ago.

In 2006, big, out-of-town development firms also invested in the middle Roaring Fork Valley. Pat Smith's WestPac Investments LLC teamed with New York-based Related Companies to pay $18.5 million for the aborted Bair Chase golf development on a 280-acre ranch between Carbondale and Glenwood Springs. They are the same team that bought the Base Village project at Snowmass Ski Area from Intrawest Corp.

Elsewhere , Joseph Freed and Associates LLC of Chicago paid $20 million to buy into Lipkin's Willits Town Center project, a 10-block core that will feature 250,000 square feet of commercial development mixed with 400 lofts and condominiums.

Another Chicago-based firm, a subsidiary of Lane Industries, is reworking a development plan for the Tavaci development, across Highway 82 from Willits.