Economic uncertainty amid other factors have drawn out the process of bringing what officials are calling Breckenridge’s last workforce housing neighborhood, the Runway Neighborhood, into fruition. Things are now starting to get moving, but there still isn’t a completely finalized product the town is committed to. 

At a May 27 meeting, Breckenridge Town Council approved an agreement solidifying a swap of land for housing units between the town and the Summit School District, which had unanimous approval, and gave preliminary approval to the development agreement, which did not have unanimous approval. 

The Runway Neighborhood was long planned to be a 148-unit neighborhood geared toward the workforce featuring a mix of housing types between multi-and single-family homes. It was always planned to be done in phases, and officials landed on a first phase with 81 units and a second phase with 67 units.  Concerns ramping up regarding the economy at the start of spring caused the town to hit pause on committing on both phases. It has signed on for phase 1, which will come with a near $33 million subsidy.

While it is thought by staff a second phase could happen, both agreements approved May 27 acknowledge the possibility of the planned second phase of the project not happening. 

The town tried to approve a developer agreement in March, but it fell through when staff decided it would be best to bring it back to the drawing board for several reasons, including the developer’s asks and economic uncertainty causing question marks around phase 2. Town staff members showed more support for approval this time around.

“You couldn’t have (a developer) agreement that gave you more flexibility… . It gives you all of the outs that you could ever need,” town attorney Keely Ambrose said, noting the ability to adapt plans is baked into the agreement. 

She explained officials weren’t signing off on the project in its entirety with the agreement — or to the associated costs — it was just committing to parameters related to working with the developer. Included in the agreement are details penitent to phase 1, including a 4% developer fee, totaling around $2.1 million, and the reservation of a unit for a member of the developer’s staff to purchase. Officials discussed how the developer fee was brought down from 7% based off a recommendation from a consulting group.

The agreement lacked information about the Guaranteed Maximum Price for the project, which helped fuel a no vote from council member Dick Carleton. Ambrose said the number is absent because the developer, Suzanne Allen-Sabo of Neighborhood Crafters, is still in negotiations with contractors. 

“If we give you the final numbers now, we will never get a lower number,” she said, explaining why the Guaranteed Maximum Price was missing from the agreement. 

With previous projections coming in around $150 million for the project overall, with an anticipated $50 million town subsidy, Carleton said he wanted more details nailed down before signing off on an agreement linked to a significant town spend. The rest of the council voted yes. 

Resident Larry Crispell, who has a background in building and development, made a public comment cautioning officials. Crispell, who showed support for the project, said he wanted to remind officials of an unfavorable situation that occurred decades ago with another development he said he could see arising with this development. His concerns were tied to plans to subordinate deed restrictions to the financing of the project.

The project will use a loan for financing, and subordinating the deed restriction means the loan’s lender would have the ability to take away the deed restriction if the property were to be foreclosed on for some reason. Taking away the deed restriction would remove the affordability measure on the units and make them priced at market-rate, which could defeat the purpose of building a neighborhood the local workforce can afford. He said this happened with the Grandview condo development when it was foreclosed on, and the units weren’t preserved for the workforce as originally intended.

He said he talked to industry professionals and learned there might be a way the town can “preclude (the project) from being sold on the courthouse steps” by including a caveat in the development agreement. The town said they would follow up with him.

The swap with the school district

When presenting the agreement with the Summit School District to council at the May 27 meeting, housing manager Laurie Best said it accounts for a situation where phase 2 doesn’t happen, meaning the town will give the district 35 units in exchange for ownership of a piece of land on the McCain property either way. The McCain property is valuable to the town because it houses town projects like the workforce housing development Vista Verde, town-maintained open space and space for other town operations.

If both phases happen, there will likely be four sales phases for all the units. A certain amount of units in each sale phase will be reserved for the purpose of selling to district employees until the 35-unit requirement is met. If the second phase doesn’t happen, the agreement says the 35-unit requirement can also be met through resales.