The Summit County government will pay more than $4 million in total to a developer for its work on an affordable housing project that has been put on hold indefinitely, according to county officials.

The Summit Board of County Commissioners on Tuesday, April 8, approved a termination letter that ends a pre-development agreement with Servitas, a housing development company, related to the housing project on U.S. Forest Service land.

Summit County manager David Rossi wrote in the letter that the project “has faced a number of challenges which have called into question the overall viability of the Project and the County has elected to terminate the Project.”

Planned on a parcel of U.S. Forest Service land near Dillon, the construction of the 162-unit workforce housing project had previously been expected to start this year. But the county announced in February that the project was on hold, with no current timeline for when it might resume.

Summit County communications director Adrienne Saia Isaac said Thursday, April 10, that the county’s lease of the U.S. Forest Service land remains in place and the county is hopeful that a housing project there will eventually move forward.

Isaac said that the project has been put on hold for a number of reasons including rising construction costs, a shifting economic environment, the leasing of the land complicating the project’s financing, changing area median income levels and reductions to U.S. Forest Service staffing under the Trump Administration.

“The delays are frustrating. But in some ways they are to be expected, especially when you don’t know how the markets are going to shift — and they have shifted drastically,” Isaac said. “Interest rates. Inflation. Now tariffs. A ton of market volatility. That makes these things even more difficult.”

The termination letter states that the county will make a payment of $3.65 million to Servitas within 10 days. The document also contains a “mutual non-disparagement” clause requiring that neither the county nor Servitas or other parties “speak negatively of each other” to any public outlet. 

Isaac said the $3.65 million includes about $3 million for reimbursables, like technical surveys and design drawings, associated with work that Servitas did on the project to date, and approximately $650,000 in development fees owed to the group.

In addition to that money, the county has previously paid about $500,000 in development fees to Servitas since 2023, and it paid the group about $370,000 to conduct a feasibility study for the project in 2022, Isaac said. 

That brings the total cost of the project to date to about $4.5 million.

The White River National Forest leased the approximately 11-acre parcel northeast of the intersection of U.S. Highway 6 and Lake Dillon Drive to the county to build workforce housing in late 2023. It was the first time the Forest Service had leased land to a local government to develop workforce housing, and officials have said they hoped the project would serve as a blueprint for communities across the country.

The plans for the site included six buildings about 47 feet high, or three stories. The units were proposed to have included studio, one-, two- and three-bedroom apartments, with rents ranging from about $1,550 to just over $3,450. The target area median income range would be 80% to 120%, representing an annual income of between $68,240 and $102,360 for an individual, according to 2024 figures from the Summit Combined Housing Authority.

The Housing Authority is expected to publish updated area median income levels for 2025 in the coming weeks.

“We have to make this (work for) lower (area median incomes),” Isaac said, including low- and middle-income workers. “… You don’t want to build housing where you automatically price out those people that need it the most.”

The U.S. Forest Service had collaborated with the Summit County government on the housing project since Congress passed the Farm Bill in 2018, which included a provision letting the federal agency lease land to local governments for affordable housing.

“We have tried to find innovative options to build housing in a county that does not have much buildable land left,” Isaac said. “We have to explore all options. Our community has told us consistently that there is a need for more housing for our workforce. This is one of those projects that you have to explore it. We don’t have a crystal ball.”

Isaac pointed to other workforce housing projects, such as the Smith Ranch neighborhood, that have come online in recent years as a testament to the county’s dedication to addressing housing needs. Housing developments “don’t happen overnight” and can “involve a lot of risk,” she said.

Despite the ongoing pause on the U.S. Forest Service workforce housing project, Isaac said, “No one is giving up. (We’re) not ready to give up. We want to find a way to make it work.”

In the termination letter, Rossi wrote that the county government will consider Servitas as a potential partner in future affordable housing projects and that it “greatly appreciates all of the work and effort Servitas has put into the Project.”

A spokesperson for the U.S. Forest Service did not respond to questions from Summit Daily News before press time. Dillon Town Manager Nathan Johnson also did not return a request for comment Thursday.