The price of dense urban development in Breckenridge is about to go up
February 7, 2018
Breckenridge Town Council adopted a joint resolution Tuesday night that would dramatically spike the price of transferable density rights sold in the Upper Blue Basin, provided it's also approved by the county.
If the price increase is enacted, as it's expected to be, the hike could raise the cost of a major hotel project being pursued in Breckenridge right now by more than $2 million.
At the Jan. 23 work session, staff and council agreed the price of density rights was woefully low and floated options for resetting the pricing structure.
At the end of discussions, council opted to move forward with setting the price of a transferable density right based on the median price of all backcountry property sales since 2000, the year the program was established.
Most basically, the resolution jumps the cost for density rights in the Blue River Basin from $47,800 to $82,500 apiece, while also instituting a process for updating the price on an annual basis.
On Jan. 23, council members said they could easily go higher, but it was important to remain in line with the county. They also took comfort in knowing the price would be adjusted on a regular basis.
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Before Tuesday night's vote, assistant director of community development Mark Truckey told council that town staff would monitor the increases to make sure they're tracking the way the town intends.
The Upper Blue Basin Transferable Density Rights Program was originally created to protect Summit County's open space by allowing the town and county to buy up land in the backcountry, strip density rights from it and then move that density to other parcels where larger developments may be more appropriate, for a price.
The program mainly works because a market exists for additional density with the county and town having policies prohibiting up-zoning — or adding more units of density to land — without density rights.
As a result, the program in the Upper Blue Basin has been credited as the most successful in the county, protecting more than 1,100 acres of open space and generating about $3 million for more open-space purchases since 2000, according to the county's statistics.
Tuesday night's vote was unanimous, but Councilman Mike Dudick recused himself before it was cast, as he has previously done with all recent discussions regarding the price of transferable density rights, also known as TDRs.
The recusal comes as Dudick's company, Breckenridge Grand Vacations, is chasing a proposed four-star hotel at the base of Peak 8 at Breckenridge Ski Resort in a partnership with a Miami-based development firm, Lionheart Capital, on land owned by Vail Resorts.
Because the developers hope to secure up to 62 additional TDRs to accommodate a number of wholly owned condos that would come with the hotel, something the developers say must happen to make the project financially viable, they will have to pay a far greater price than they otherwise would have if price of TDRs wasn't in flux.
"I think candidly that our application accelerated the process to increase the pricing," Dudick said over the phone Wednesday. "I don't really think someone could objectively look at it any other way."
He explained that discussions regarding price of TDRs have been ongoing and well-documented for over a year now. However, "when the (hotel) application came up, they said, 'We got to get this right away,'" he said.
Overall, if the deal is approved by council, the spike in TDR prices will likely cost the hotel developers more than $2 million above the almost $3 million they would already have had to pay under the current price.
Dudick said he's not getting too bent out of shape over it, but he thinks one of the great ironies is that by adding $2 million to a project's costs, most developers will make up for that increase by upping the square footage of their projects.
"I don't like it, but I accept it," Dudick said of the price hike, adding that "the good thing about it is, even with the price increase, that money is going to get split 50/50 between the county and the town to purchase more open space.
"While it costs me more as a developer, it also provides a tremendous benefit to the community to go out and purchase more open space," he continued. "That's a good thing so I can see both sides of that."
The joint resolution must still be adopted by the Summit County Commissioners. The county is expected to act on the joint resolution Feb. 13, at which time the new price could go into effect.
In other business
• Council unanimously approved an ordinance amending town code creating a new retail food and beverage category with reduced plant investment fees.
• Council unanimously approved resolutions making supplemental changes to the town's 2017 and 2018 budgets.
• Council unanimously approved a resolution canceling the April 3 election and declaring the candidates who've filed to run as elected on April 3 due to there being only three candidates and just as many open seats.
• Council unanimously approved a proposal to construct a new park, River Park, at 470 Floradora Drive, next to the Blue 52 workforce-housing neighborhood. The park will include a pavilion with restrooms, a variety of recreational amenities and a connection to the Blue River Recreation Path.