Frisco developer Larry Feldman pitches workforce housing land swap
June 28, 2017
A developer has offered to trade eight two-bedroom townhomes to the town of Frisco to be used for workforce housing in exchange for a coveted lot on the corner of Third Avenue and Granite Street currently used for snow storage.
The pitch, made by Larry Feldman to the Frisco Town Council during its Tuesday afternoon work session, is the latest example of builders attempting to use workforce-housing units as bargaining chips in an increasingly tight development market, where land is scarce and construction costs are high.
"Condo development land has become extremely scarce and expensive, and the likelihood of a developer coming along and putting affordable housing in is getting slimmer and slimmer," Feldman said.
The council, meanwhile, has been cautious in striking bargains with private investors to alleviate the housing crunch, preferring a more deliberative approach within its nascent Housing Task Force and carefully guarding its public resources.
“Condo development land has become extremely scarce and expensive, and the likelihood of a developer coming along and putting affordable housing in is getting slimmer and slimmer.”Larry FeldmanFrisco developer
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On Friday afternoon, Mayor Gary Wilkinson suggested that Feldman's proposed swap was unlikely, overlooking several procedural hurdles and laying out an overly optimistic timeline.
"There has to be a public process and we have to be transparent," he said. "(Feldman) is asking for something that isn't possible at this time."
Last month, council members rebuffed an offer from Copper Mountain to take over construction of the town's eight-unit Galena street housing project in exchange for bed credits. And in April, members dismissed a developer's proposal to use affordable housing tax funds for a 100-unit project.
Summit County voters approved a ballot measure in November that used a sales tax increase to fund housing construction, but so far Frisco appears loath to turn the fund into a honeypot for private developers.
"For every project we see how we can incorporate workforce housing," Wilkinson said. "But whenever someone comes in and says, 'Boy do I have a deal for you,' we have to make sure it's really a good deal for us.'"
During Tuesday's meeting, Feldman pitched his swap as a way to translate talk into action and have workers moved into the eight units at Eighth Avenue and Pitkin Street by Thanksgiving.
"While we're trying to get more affordable housing, they're still disappearing," Feldman told the council. "We've got people fleeing Summit County and going to Denver because they can't afford to live here."
Feldman cited the eight townhomes, which he calls Coyote Village, as an example. There, he said, rents have increased from $1,500 a month to $2,000 in the past five years and are set to climb further to $2,200. (Feldman has not owned the units over that span but currently has the property under contract).
After he fixes the units up, Feldman figures he can easily sell each for around $475,000. But if they were sold as affordable housing units at $300,000 apiece, Feldman estimates buyers could be making mortgage payments as much as $500 dollars less per month than they are paying in rent now.
In exchange for handing over the fixed-up townhomes, Feldman would get the Third and Granite property — known as the Sabatini lots — where he figures he could build as many as 24 market-rate units if granted certain code allowances by the town.
Citing comparable sales, he estimated the Sabatini lots to be worth roughly $1.6 million. The total market value of the townhomes, he said, would be anywhere from $2.4 to $3.8 million.
To avoid the impression of a "sweetheart deal," Feldman suggested the town make the Sabatini property available for purchase "at the same or at a similar basis" to what he is offering.
"We do not think anyone will come near our price or have the ability to offer immediate affordable housing," a memo from Feldman to the town dated June 22 reads.
The town council did not discuss Feldman's proposal after he gave his pitch during the work session. On Friday, Feldman said he had still not received word back from the town.