Officials with Dillon, Summit County and the U.S. Forest Service continue to work together in hopes of developing the Summit County Road 51 workforce housing project, a nontraditional concept that would allow county and town officials to build housing units on annexed Forest Service land for in-kind considerations, like housing.

The three entities gathered for a virtual conversation on the project in April, taking a look at design concepts for the 9.18-acre plot between Forest Canyon Road and County Road 51 just north of Dillon. During the meeting, contractor Norris Design presented a pair of concepts based around different density outlooks for the site: one that would include 270 bedrooms (159 units) and another that would include 350 bedrooms (203 units).

Density on the site will be one of the major topics of conversation moving forward, as Dillon, Summit County and Forest Service officials continue negotiations to make the project a reality. But as officials work to balance considerations around costs, quality of life and the current affordable housing shortage in the community, Dillon is concerned that sewer capacity might be another limiting factor in the ultimate size of the development.

Town Manager Nathan Johnson broached the topic during a Dillon Town Council work session Tuesday, July 20. Dillon bases sewer utility capacity on equivalent residential units, or the allotment of shares the town owns at the Joint Sewer Authority, which serves the communities of Dillon, Silverthorne, Dillon Valley, Buffalo Mountain and Mesa Cortina.

“Think of it like buying stocks. … There are about 14,000 shares of this company, and we bought 2,403,” Johnson said, referring to the total capacity of the sewer authority. “So some of the other players have bought more, thinking of redevelopment or growth.”

As Johnson noted, Dillon currently owns a total of 2,403 equivalent residential units as it relates to the sewer authority’s capacity. More than 1,800 are currently online, and the town has already committed about 163 to projects set to go online in the coming year like the Homewood Suites by Hilton, Uptown 240 and Vail Health’s new medical building, among others.

In total, Dillon currently has 408 equivalent residential units of sewer capacity to play with. And while council members debated their preferences between a higher density development to alleviate housing shortages and lower density to ensure a higher quality of livability, they agreed that using all of the town’s remaining sewer capacity in one place isn’t a good idea.

“Let’s say if we take up 200 (equivalent residential units) for this project, that’s a lot, but we still have 200,” Mayor Carolyn Skowyra said. “Uptown 240 was 63. So if we want any buildings to redevelop and maybe go higher in the town core … I think those 30 additional (equivalent residential units) or whatever could add up pretty quickly for each building in the town core. … We should be talking about what is the max of our utilities that we’re going to spend there so that we still have some in the bank for projects that are Dillon projects.”

The town could theoretically purchase extra capacity from Silverthorne or another member of the Joint Sewer Authority, but for now, the town has decided to take a smaller-density proposal to the table with Summit County and the Forest Service. If the county desires a higher-density development, the Town Council said it would be up to them to help Dillon acquire the additional sewer capacity.

“I’m in favor of looking at — I think it was 159 units for the smaller density that complies with our parking codes, figuring out what those (equivalent residential units) are and have that be our hard limit we’re willing to spend,” Skowyra said. “Just set that as our threshold and say the rest we have reserved for future projects.”

While density is certainly a topic of concern, there’s much more to still be ironed out on the project, such as the installation of a proposed roundabout at the intersection of Lake Dillon Drive and Colorado Highway 6 and determining who will actually own the units once they’re completed. Based on the county’s current housing situation, Johnson said ownership would likely fall to one of the local governments that could ensure rent prices stay affordable. But other businesses and organizations are apparently looking to stake their claim, as well.

“We’re essentially building the plane as we fly it,” Johnson said. “… There are a lot of different entities in the county that have expressed interest in being part of that ownership, from ski resorts to businesses to the school district, as an example. Everyone is viewing it as, if we can be a part of the membership group, we can hopefully have some units held back for our employees.”

Dillon will host a community meeting on the project at 5:30 p.m. Aug. 10 at Dillon Town Hall to further discuss priorities for the development, conceptual plans, next steps and more.