Vail set to spend millions on Chamonix homes | VailDaily.com

Vail set to spend millions on Chamonix homes

VAIL — It's almost time for the Vail Town Council to start writing checks for the Chamonix townhomes project in West Vail. Those checks are going to be big ones.

As the project comes closer to construction, town officials have a solid idea of what it's going to cost to build the 32 townhomes. There are still variables, but if the units are built in a Nebraska factory, reassembled in Vail and built in one phase, the project will come in at about $17.5 million.

The town is paying to build the townhomes, and the project will require the town to pay about $14.9 million between April and November of this year, with the rest of the project cost coming in 2018.

According to a memo from Vail Finance Director Kathleen Halloran, the Chamonix project will reduce the town's cash accounts to about $6.1 million by the end of November. The first income — money from home sales — isn't likely to come in until early 2018.

“There’s significant demand for this project. I’d expect buyers will be stacked up several deep.”Mike CuthbertsonSenior project manager, RA Nelson

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The town will be able to fund all of its budgeted expenses, and Vail still has a good bit of money — $49 million — in its longer-term investments.

Interested buyers afoot

The cost of building the project is significant, even for a town with healthy cash reserves.

At Tuesday's Vail Town Council meeting, council member Dick Cleveland and others expressed some worry that all of the homes won't be sold, leaving the town owning some of the townhomes.

As of Tuesday, there are 145 names on a list of interested buyers. Using information from workforce housing lotteries elsewhere, Cleveland said about half of those interested people will be qualified buyers.

Ultimately, he said, "we may have 35 or 40 buyers for 32 units. These are the questions that keep me up at night."

The town's development team is made up of Vail Community Development Department Director George Ruther, Michael O'Connor of Triumph Development and Mike Cuthbertson of RA Nelson.

That team Tuesday tried to calm council members' concerns.

Ruther told council members that the deadline for applying for a home is March 31, roughly seven weeks away. That means more prospective buyers are likely to come forward.

"There's significant demand for this project," Cuthbertson said. "I'd expect buyers will be stacked up several deep."

The team will come back to the council at the March 21 meeting with an update about buyer interest, and Ruther said he expects a deeper pool of buyers by then.

"A fair number of people who have talked to me aren't on the list yet," he said.

A 'very expensive product'

To spur early applications, Ruther said the development team could use financial incentives to get people to apply sooner rather than later.

Still, Cleveland said, the Chamonix townhomes are unique, particularly regarding expected prices. Estimated prices for the smallest of the units start in the low-$400,000 range. The four largest units have estimated prices starting at $700,000.

"The problem is we've got a very expensive product; it's unlike anything that's been on the market before," Cleveland said.

Another potential problem could be looming with the construction schedule. While the development schedule is on track to start work in the spring, Cuthbertson said it's time for RA Nelson to start lining up subcontractors for earthwork and other projects.

A longtime veteran of the local construction industry, Cuthbertson said he's never seen this much demand for subcontractors this early in the year.

"I went to five earthwork companies (recently) and four said they couldn't meet the schedule," he said.

While the town's approval process is moving along, and the town will in the coming days hire a third-party consultant to evaluate the schedules and budgets, the need to line up subcontractors is pressing.

Council members authorized $50,000 to pay for construction drawings on Tuesday, and approved Cuthbertson's request to start lining up subcontractors.

Even as everything else moves forward, the lottery for the townhomes is set for May 3 at 6 p.m. at the Donovan Pavilion.

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com or @scottnmiller.

Five facts

What: Chamonix Townhomes.

Where: West Vail.

Purpose: For-sale, deed-restricted workforce housing.

Lottery date: May 3.

More info: http://www.chamonixvail.com.