County readies affordables deal
Vail, CO Colorado
EAGLE COUNTY, Colorado ” County commissioners moved ahead with the $53-million sale of Lake Creek Village apartments Monday night with the support of some town officials and the disapproval of some local builders.
Commissioners approved a “letter of intent” to sell the county-owned affordable rentals in Edwards. The agreement is non-binding, but means that the county intends to exclusively negotiate the deal with Corum Real Estate Group, the company that currently manages the complex.
The deal would keep the 270 apartments affordable and rent-capped forever. The sale would net the county $30 million after paying off outstanding bond debt.
That money would then be reinvested in other affordable housing opportunities, such as partnering with private developers, buying land, and building assisted living for seniors, said the county’s housing and development managing director Alex Potente.
The county considered selling Lake Creek, refinancing and keeping it, or holding onto the property for another decade, and decided that selling it now would have the highest pay back both in money, and potential housing that could be created, officials said.
“Our staff feels that (this deal) creates a perpetually funded housing endowment created with no taxpayer money,” Potente said. “It would also provide the ability to partner with private developers, who usually require subsidies, to build affordable housing.”
Several town officials voiced their support for the sale.
Gypsum Town Councilman Tom Edwards said the sale would ensure that Lake Creek remains affordable housing, creates money to build more housing without coming to the taxpayers, and will allow the county to reap the benefits of the investment down the road.
“The county has come up with a terrific proposal with the sale of Lake Creek Village,” he said. “Don’t pass up this opportunity.”
Vail Town Councilwoman Margaret Rogers said the sale would free the assets in Lake Creek and spread it around the valley. She hoped commissioners would consider spending some of the money to help Vail renovate Timber Ridge, the town’s employee housing complex.
“I’ve rarely seen a deal that looks this good,” she said.
Minturn Mayor “Hawkeye” Flaherty also said he thought it was a great proposal.
However, some builders and residents said they were concerned that the deal doesn’t make financial sense. Avon resident Chris Juergens said he thinks the county could sell the apartments for much more than $53 million.
“This is a screaming deal,” he said “It’s a buyers market, and whoever is willing to buy right now is going to get a good deal, and I’m afraid that’s what’s happening here.”
The deal averages out to selling the apartments for $196,000 per unit, when the county could possibly make much more money, he said.
He compared the Lake Creek deal to the county’s plan to rebuild the Riverview apartments, a federally subsidized, affordable housing complex in Eagle-Vail. Plans are to scrap the existing building and rebuild a denser project ” the cost per unit to do that would cost much more than $196,000, Juergens said.
“It just doesn’t make sense at face value,” he said. “It looks like a fire sale to me, and I would really consider holding onto it.”
But Potente said the deal wasn’t a matter of trading Lake Creek homes for Riverview homes ” it is a matter of getting funds from Lake Creek to reinvest in other projects. The county doesn’t have a definite plan for Riverview, but they are considering adding anywhere from 20-50 homes to the complex, he said.
Also, the sale price of Lake Creek Village is limited because the apartments are rent-capped, he said.
Developer Bob Warner questioned how Corum would pay $30 million, charge restricted rent, and still make money from the deal. He said he was worried the quality of the apartments would suffer as a result.
“I think it’s a very foolish move,” he said. “It doesn’t make sense to me.”
Developer Glen Helan also said he didn’t think the county’s estimates on how much it would earn from the sale and investment added up.
However, commissioners said that while they wanted to investigate concerns, they felt they should continue with the deal.
“It’s very simple, there’s not going to be a place for community if we don’t do these kind of things,” Commissioner Arn Menconi said. “This is just one solution, and it’s not a tax increase. Why wouldn’t you want to pull out the dollars to reinvest?”
If the sale goes forward as planned, the deal is expected to be closed in spring 2009.
Staff writer Melanie Wong can be reached at 748-2928 or email@example.com.
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