Local developers request support from Avon on community housing project | VailDaily.com

Local developers request support from Avon on community housing project

If completed as proposed, the project could bring up to 50 deed-restricted employee housing units to Avon

A local development group, Legacy Mountain Development, approached the Avon Town Council with a unique proposition to partner on the creation of around 50 units in Wildridge, specifically designed to house local employees.
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In November, a local development group, Legacy Mountain Development, approached the Avon Town Council with a unique proposition: Partner on the creation of around 50 units in Wildridge specifically designed to house local employees. On Tuesday, the group came before council for a second time to seek a pledge of support for the project during a work session.

“I don’t think something like this has been done anywhere in Eagle County,” said Steve MacDonald, owner and president of the Vail Management Group and one of the members of Legacy Mountain Development. “We’re trying to see if there’s a way that a land owner or developer can come in and say, ‘We have a way to be involved and help in solving our housing problem.’”

The development group — composed of Avon residents and longtime locals MacDonald, Sean Reynolds and Phil Matsen — purchased Tract Y, the plot of land in question, earlier this year after a commercial project with a previous developer fell through.

This is one part of what makes the project unique.

“I just want to say we do appreciate that you brought the property, and that you’re interested in going down this road with us,” said Mayor Sarah Smith Hymes. “There are obviously lots of details to be worked out, but you actually bought the property, so that’s great.”

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In their preliminary plans, the developers identified that the site — located at the bottom of Wildridge in Avon — could fit around 50 units ranging from 2-bedroom townhouses to 3- and 4-bedroom duplexes. While there are still many details to iron out, the group expressed a desire to begin the project next summer and more forward with a construction timeline of two to three years.

A preliminary site plan from the Avon Town Council Packet, provided by Legacy Mountain Development and their architects and engineers, shows the potential 50 housing units to be developed on Tract Y in Wildridge.
Courtesy Photo

To get these housing units off the ground, the developers identified that they need the support of local municipalities. In a letter to the Town Council, the developers requested support from the town in four ways: permit and building fee exemptions, tax exemptions for materials, waiver of the transfer tax and a funding contribution toward infrastructure expenses.

Speaking to council on Tuesday, the group said that, after receiving a pledge of support from the Avon Town Council, they intend also ask for financial support from the town of Vail and Eagle County.

“We’re trying to make this happen in a new way that nobody else has and get a collaborative effort of all the government entities to try to make it happen,” MacDonald said at the meeting, having noted earlier that “with the cost of housing and construction what it is now — like in the town of Vail, where they subsidize things — we are going to need help to be able to carry out a project like this.”

Town Manager Eric Heil also stated the need for support by saying: “There is a need to have some level of funding commitment from the town for them to be able to seek their financing to get started.”

In a memo from Heil to council, he recommended that the town’s pledge of support be defined as “providing deed restriction purchase funds in the amount of 12% or $100,000 per residence, whichever is less, for home purchasers (not employers purchasing for employees), and limit the pledge to one-third of the proposed development of 52 duplex or townhome units, or 17 units, which would amount to not more than $1.7 million.”

The memo adds that this pledge would not be legally binding and represents the “appropriate level of commitment at this time by the town with the understanding that more project details will be identified, there may be a need for additional public funding to assist with infrastructure.”

However, at the meeting, Heil suggested that based on conversations with the developers and the town’s budget and goals, “a number of $600,000 as an initial financial commitment would make sense,” he said.

“I think that level of commitment would allow Avon to pursue its other community housing goals.”

In the initial conversation between the developers and council — which took place Nov. 6 — the discussion centered primarily around the deed-restriction parameters to ensure the project served the local employee housing needs.

These details still need to be established and are expected to be better defined in future council meetings and documents, which are likely to next come before council in January.

Maintaining affordability

Overall, at Tuesday’s meeting, the council expressed not only support for the plans but an interest in making a contribution and helping see the project through.

“I think it’s totally awesome, and I’m totally psyched about it,” said Council member Tamra Underwood.

However, with this excitement also came concerns from council members over keeping the units affordable for the local residents that need housing.

“In this case, I almost think that we might need to have some sort of margin cap or price cap or something that we know that the product you’re building is something that the Mi Casa Avon buyer can afford to buy,” Underwood said. “It’s not my intent that we enter into this long-term relationship that you roll out townhomes that are $1.3 million or something, and the Eagle County employee that we’re all thinking of really can’t afford to buy it.”

Underwood followed this up by asking directly: “Are you going to build a project that the Eagle County employee can afford?”

The developers expressed that while maintaining affordability and housing locals was their main goal, there are certain market and site constraints that could pose challenges to this.

“All I can say to that is building costs are expensive and the other piece to that is, if we don’t have buyers, the project doesn’t work, so we have to find that fine line where we can make numbers come together, but it’s a deed-restricted project, it has to be sold to locals,” MacDonald said. “There a lot of parameters we have to all bring together, and, again, the risk is ours. One of the sweet spots for the town is, we have to figure that out and make it all come together to make the project work.”

As the discussion was just a work session this week — and no official action was taken by council — the project still has a lot that needs to be sorted out before the developers can break ground or any official partnerships and commitments are made.

“I think we need to have a development agreement that would flesh out more details,” Heil said at Tuesday’s meeting.

MacDonald did note that if they received a positive mood from council — which they did — they intended to tell their architects and engineers to “run.”

Highest and best need

Ultimately, all parties acknowledge at the meeting that the stakes for completing the project are high.

At Tuesday’s meeting, Council member RJ Andrade asked the developers what they would put on the plot of land should the town not pledge any support for the housing project. MacDonald said it would likely be something like storage units.

“I just want to make sure everyone understand the value of this inventory there, compared to storage units,” Andrade said.

This partnership exemplifies just one of the ways that local entities and municipalities are getting creative in solving housing challenges. It also falls in line with previously established town objectives.

Earlier this year, when the Town Council reviewed and updated its Community Housing Plan, it identified a goal of working not only with regional partners but to establish more public-private partnerships to address the local housing crisis. Not only that, but voters passed a 2% short-term rental tax in November to establish a dedicated funding source for community housing projects, of which private-public partnerships were identified as one item the tax could help fund.

In the end, however, MacDonald made it clear that putting employee housing on the site was their ultimate goal and the “highest and best need for the valley.”

“We purchased the land without gaining any approvals with the hopes that our vision for a locals housing project could come together,” wrote Reynolds, MacDonald and Matsen in their letter to council. “Our vision is to help solve the extreme housing issue in the valley through utilizing local contractors and subcontractors while in partnership with the Town to create a product that is needed to help sustain the community we all live in.”

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