Vail Valley Voices: Why selling Lake Creek makes sense
Vail, CO, Colorado
The Eagle County Board of Commissioners is committed to increasing work-force, senior and assisted-living housing opportunities, and we believe the sale of Lake Creek Village Apartments can further those efforts now more than ever.
Sale of the property, which is the red-roofed, 270-unit apartment complex you see from Interstate 70 just west of Edwards, could bolster the confidence of other investors and provide funds to stimulate our own local economy. During the last round of bidding, local property owner Morningstar Mountain Properties, in partnership with local property manager Polar Star Properties, made a $45 million offer to buy Lake Creek.
We will consider ratifying a letter of intent at 11 a.m. Tuesday in the Eagle County Room, located at 500 Broadway in Eagle. The letter is nonbinding but would provide the first step in moving forward with negotiations.
In the meantime, allow us to address some potential questions in advance.
Why sell Lake Creek?
Selling Lake Creek creates a dual opportunity for Eagle County to protect an important housing asset while at the same time freeing up money to reinvest in additional housing programs. As a condition of the sale, Lake Creek would remain as an affordable rental community forever. With the sale proceeds, the county would be able to begin development of additional work-force, senior and assisted-living housing projects. We believe the economy will bounce back, and when that happens, the cost of housing will be as high as ever.
The money Lake Creek would provide packs substantial punch in this down economy. In the present economic climate, cash is king.
Although the value of Lake Creek has decreased over the past six months, the cost of land, labor and materials has decreased even more, resulting in increased purchasing power.
Simply put, our money can go further and do more. And, this is money that could be put to work now, using our local work force and providing a stimulus to our local economy.
Is this a ﬁre sale?
No. Commercial real estate is not valued in the same way as residential real estate.
It’s Lake Creek’s rent collections, or cash flow, that determines its value.
Because rent increases are limited, the property’s value is limited, as well.
Financial modeling, performed by commercial real estate experts, investment bankers
and bond counsel, shows that at $45 million, Lake Creek is actually worth more to the
county today than it will be five years from now.
Why would anyone buy it?
Private buyers can take advantage of federal and state tax deductions that the county, as a public entity, can’t.
What guarantee does the county have that Lake Creek would remain well-maintained, work-force housing?
The property is not currently rent-restricted. Following a sale, Lake Creek would be required to remain an affordable rental complex forever, with built-in incentives to maintain and improve the property.
The county would also retain ownership of the land through a land lease.
Please join us Tuesday to share your thoughts on this important decision, or feel free to contact us in advance at 970-328-8605. The meeting will also be broadcast live on ecoTV ” Channel 18 on both local cable systems ” and streamed online at http://www.ecoTV-18.com. We look forward to hearing from you.