Vail Resorts declines Summit County request to split $300k in housing project costs
June 19, 2017
On May 22, after a hard-fought agreement to build workforce housing in Keystone, Vail Resorts and Summit County celebrated the latest attempt at easing the local housing crisis.
The framework of the deal for the Village at Wintergreen had Vail supplying the land, its development partner, Gorman & Company, building and managing its 196 units and the Board of County Commissioners modifying its zoning restrictions to move the project forward. But a week later when it came time to contribute to the cost of 40 planned low-income rentals as part of the project, the county was left largely footing the bill.
County staff was aware Gorman & Co. would be making a request of the board for financial assistance — helping offset costs for the units, as well as exhibiting public backing for the project during a competitive application process for necessary low-income tax credits. However, upon learning the ask was $300,000, the county's three-member board approached Vail about splitting the price. Despite previously announcing the availability of $30 million toward employee housing projects that also houses its own workforce, the resort company declined to contribute further to the project.
"I don't know where any of that money has gone," said Commissioner Karn Stiegelmeier. "They have talked about it in press releases over and over, but I haven't seen where they've actually put in money.
"I would welcome any greater partnership with them," she added. "It seems obvious that if we're putting money in, it would be really great to have more cash to make it a better application."
Vail's original December 2015 housing commitment to the communities where it operates notes many of these projects could take years and that capital, use of its own land and leasing agreements were all in play as part of that total. The Village at Wintergreen is the first project to get off the ground within the intended Colorado, California and Utah mountain communities, and Vail is comfortable with its pledge of the 28.4-acre Keystone property for Gorman to build upon as well as the below-market lease.
"We are thrilled that the Wintergreen project has been approved and that it is happening because of our land lease to Gorman and that we have committed to master lease a significant number of units," Kristin Kenney Williams, Vail Resorts' vice president of mountain community affairs, said in a statement. "The fact that the county is supporting the (low-income) component of the project is terrific — the entire Wintergreen project is a model example of the creative private-public partnerships we were hoping for."
According to county documents, the land parcel where the housing development will be constructed is valued at approximately $1.5 million, and Vail Resorts paid roughly $21,000 in combined property tax for it in 2016. The leasing agreement with Gorman & Co. is for about $35,000 annually for 100 years.
All parties acknowledge the deal never gets done without the land, which under area zoning regulations already required it be reserved for employee housing. It's also a major factor in the state's tax-credit agency awarding the federal subsidy to such projects throughout Colorado.
"We couldn't have funded the project and could not make it work financially if we had to make an outright acquisition of that land," said Kimball Crangle, Gorman's Colorado market president. "Vail Resorts is bringing quite a bit to the table … and the ground lease of the land is definitely included in the application as well."
Another determination in a project receiving the tax credit for units that will rent for 30-to-60 percent of the area median income — depending on the application request and available funding — is whether there's local public financial support. The other seasonal and year-round Wintergreen rentals are capped at 120 percent AMI and set for lease at an average of 100 percent.
"The county has known for some time that we've been interested in competing for a tax-credit award at the Wintergreen site," said Crangle. "It's a fundamental component to address affordability and the type of rental housing in critical need in the county."
After a request from Gorman for $350,000 approaching approval of the deal on May 22, the county committed to nearly that amount in housing dollars later that week to give the tax-credit application its best chance to be green-lighted. If the approval is not ultimately granted, the 40 units will transition over to the 100/120 AMI alternative and the county will be off the hook for the additional money.
Still, with so many other communities vying for a limited number of available tax credits, securing the low-income units is not a sure thing.
"We definitely knew all along there's no guarantee," said Stiegelmeier. "It's the bright, shiny candy bar that you may or may not get, and it made it more appealing. But it's kind of a gamble, you never know."
It remains the county's position, though, that with additional contributions from Vail, there would be a greater chance the low-income rentals are consented to by the feds. Gorman believes it has a viable application, even if the resort company's refusal has left the county with a bitter taste in its mouth.
"Would it also be nice if Vail Resorts threw in some money? Sure," said Thad Noll, assistant county manager. "It's on their property, and they would be a beneficiary of it. They obviously said no, definitively, and my guess is the board was surprised they said no flatly.
"Sometimes you have to bite your tongue and say OK, because it's the best thing for the public in the long run," he added.