Summit County compromises in complex Keystone land deal
April 29, 2016
Summit County is in the process of settling a deal to finalize residential development on a piece of property in Keystone more than 20 years in the making.
Summit's Board of County Commissioners held a public hearing this past Tuesday, April 26 to listen to local developer Tim Crane of Summit Homes Construction — owner of two notable land parcels in Keystone — on changing the zoning regulations for the area. The Keystone PUD — as it's known, or permitted uses and development — dates back to its adoption in 1995, when it put restrictions on how properties for the unincorporated county land could be built out.
At that time, the parcel in question, known as Brown's Cabin, was owned by Keystone/Intrawest LLC, and this development partnership agreed to zoning that would allow it to only construct up to 100 units of workforce housing, a child-care center, an information center and a parking lot on the land where a gondola would have also been built. But, as it stands, the 4.35 acres at Brown's Cabin remains a vacant lot.
This is where it gets complicated.
Keystone/Intrawest LLC dissolved in late-2003, and the property was sold to Tom Petters, CEO of the Minnesota-based investment firm Petters Group Worldwide. In 2008, Petters was charged with and subsequently found guilty of business fraud stemming from a Ponzi scheme estimated at more than $3 billion. Today, he sits in Leavenworth Federal Penitentiary in Kansas where he'll be serving his sentence for another 40-plus years.
Minnwest Bank Metro, which loaned Petters the money to buy Brown's Cabin in 2007 (and, in 2006, also loaned him $9.1 million for an adjacent Keystone property called The Alders), re-acquired the property and resold it to another bank. A developer calling itself Magni Keystone LLC was then under contract for the purchase of Brown's Cabin for $1.3 million — the same price Petters originally paid — contingent on obtaining a rezone within the Keystone PUD from the county to build 56 market-rate units there. When the county did not consent to change the 100 workforce housing restriction, Magni sued the county in March 2015. For more on that, check out this explainer.
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In the interim, along comes Crane, who owns a number of other LLCs in the county and then buys Brown's Cabin from that second bank for $1.05 million in April 2015, therefore dismissing Magni's lawsuit. Crane, under yet another LLC, purchased The Alders from Minnwest — a company he had a development relationship with and was already developing town homes at that site starting in 2012 — for $5.85 million in September 2015. And, today in meetings, Commissioner Thomas Davidson regularly quips his thanks to Crane for not suing the county.
Crane continues to develop at The Alders. At present, 14 town homes have been built, with another four in the works on the 15.87-acre parcel originally zoned under the Keystone PUD for up to 303 market-rate units and 7,800-square-feet of commercial space.
Now, according to the PUD, as any developer builds homes in Keystone, they kick into effect a workforce-housing requirement, which has a generation rate of a fraction of a unit per home produced. Crane has no intention of building 303 homes, but rather a much lower density of just 89 total (so 75 total more to go) at The Alders. Because that property is not zoned for workforce housing, he'll have to fulfill that requirement on other land.
Enter Brown's Cabin.
His goal is to build 33 market-rate homes there — but the PUD only provides for workforce housing, of which he also has to build because of the construction at The Alders. So Crane has come to the county, initially doing so in November, to help amend the PUD and request this upzone.
The county, in its own interests and facing a continued workforce housing crisis, does not want to lose the opportunity at those potential units on Brown's, although it does not own that land. The parties, in turn, have come together to find a way all involved can locate middle ground.
At the Tuesday meeting, Crane pointed out that times have changed, and the PUD as it's written, particularly at Brown's Cabin, "no longer reflects the current market demands or development trends." And, as the builder of myriad developments throughout Summit County — including Pinewood Village 2 in Breckenridge and of the recently announced 15 deed-restricted, workforce homes at Copper Mountain Resort called Copper Point Townhomes — he has some knowledge on the subject.
As part of the possible agreement with the county on Brown's, Crane would first build six, two-bedroom town homes at an area median income (AMI) rate to be determined, but from the county's hope a reasonable price so it remains affordable, at that parcel. Crane said Tuesday he'd sweeten the pot further.
Those hypothetical workforce properties that would no longer be built at Brown's would then go into a "density bank" that would be donated to the county and of a valuation to be determined — think of them as credits that can be spent later on — to be spread out elsewhere. So, he's also agreed to the initial framework of an "open-book project," fronting all the cost on a piece of county-owned property at Dillon Valley (or other location), to build as many as 19 units — 38 total beds — of workforce housing, potentially at a loss.
Critics may argue that the county losing out on as many as 100 workforce units — what would undoubtedly have to be dorm-style living to fit that many places to live on that amount of space — at Brown's, per the PUD, is a tough pill to swallow. Davidson, as well as Commissioners Dan Gibbs and Karn Stiegelmeier made just this argument to Crane back in November, but the chance at some real properties at all — a total of 50 beds and built sooner than later — is a significant reward meriting the agreement. Following earlier and unanimous Snake River Planning Commissioner concurrence, the Board of County Commissioners intimated this at Tuesday's meeting, but are not at this time able to comment further because the parameters have yet to be ironed out and a deal struck.
Don Reimer, the director of the Summit County Planning Department and one of the leader staffers who does such research, however, is not under such constraints,and agrees with the logic.
"Getting six town homes with a total of 12 beds and a definite commitment to build at least 19 more units, another 38 beds — a definite commitment," he said, "there's a lot of value in getting that. The county is certainly benefiting to get some housing built now."
Brown's Cabin has taken two decades. That's included umpteen interruptions, a lawsuit and land changing hands a number of times, but it seems the county is just weeks away from finally moving forward with workforce housing at a location in Keystone where these countless pitfalls have before prevented it from coming to fruition.