Council Approves Mountain Village Hotel PUD
by Karen James
Dec 16, 2010 | 1145 views | 0 0 comments | 8 8 recommendations | email to a friend | print
MOUNTAIN VILLAGE – Blowing a breath of activity into what has otherwise been a static development environment, the Mountain Village Town Council last week voted unanimously to approve the final Planned Unit Development plan for a major hotel project that, if built, will add 40 short-term rental units or “hotbeds” to the town’s lodging mix, as well as another 20,000 square feet of commercial space and provide other public benefits.

The approval of the Mountain Village Hotel, which is sited on four separate lots on what is now a parking lot between the Westermere and Shirana buildings, and on town-owned open space, as is permitted in Mountain Village, was the final step in a five-step PUD approval process and came laden with multiple conditions in exchange for height, site coverage and other variances.

In exchange for building on roughly 21,600 square feet town-owned land situated between the four lots, council accepted a 1.6-acre (70,000 square feet) deed-restricted lot in the Meadows from the developer for eventual development as employee housing.

Perhaps most notably is a requirement that 40 of the 66 one-room “efficiency lodge units” contained within the development be deed-restricted as hotel rooms. Because they are deed-restricted, these units cannot be sold into private ownership (where they are likely to remain unoccupied for much of the year), and must remain available instead as short-term rentals.

Thirty-eight larger “lodge units” are also included in the plan, as are 20 condominiums and one unit of employee housing.

Another condition requires assurance that the hotel will be operated by a full service hotel brand with broad marketing distribution capabilities.

The applicant will also pay the town about $1 million for use in various mitigation projects.

While the development rights are good for five years, given the present economy, “They would be the first to tell you, they are not anywhere close to having financing or being ready to pull a building permit,” said Mayor Bob Delves.

“It’s an absolute win-win between the town and the developer,” he continued, describing the dedicated hot-beds and assurance of a big brand hotel operator as key to the agreement.

“The only thing missing is their readiness to start the project,” said Delves. “We’ve got a wonderful project that’s ready to go, but we don’t yet have an economy that’s ready to let it go.”

Plug Pulled on Affordable Housing Projects

Even as the town put the wheels in motion to secure its ownership of more property for eventual employee housing development, however, council, acting as the Mountain Village Housing Authority, formally abandoned the Sunshine Valley and Timberview affordable housing projects it envisioned during the pre-Great Recession era by transferring the properties to the Telluride Mountain Village Owners Association.

In July 2006 the Housing Authority purchased the Timberview Property in Mountain Village, followed one month later by its purchase of the Sunshine Valley property in the Illium Valley, both for the purpose of constructing affordable housing. The following year it entered into a $1.1 million funding agreement with a predecessor organization to the TMVOA. According to the terms of that agreement, the Housing Authority was to begin building the projects by June 2009 or else return the $1.1 million in funding. In between economic forces intervened, and the agreement was then amended to extend the construction deadline to June 2010, which has since passed. With no clear path to a start date, the Housing Authority conveyed the properties to the TMVOA as consideration for the cancellation of its refund obligation.

“Our situation changed significantly,” said Delves. “The town is not financially capable of moving forward with deed-restricted projects on those lots, and because the TMVOA had reimbursed the town for the purchase costs of those lots, the lots will be transferred back to [it].”

Although it will now be up to the TMVOA board of directors to decide what to do with the properties, “They’re still deed-restricted lots,” Delves said.

Council Clears Lean 2011 Budget

Seeing little change from the previous year, council also approved the second reading of an ordinance adopting its 2011 budget. It envisions the town taking in some $25.3 million in revenues against expenses of $24.8 million.

“We’ve done some significant belt-tightening in past two years and this is yet another budget that continues to do the same,” said Delves. “It projects little to no optimism in terms of increased revenues.”

Some $8.665 million is allocated to the town’s General Fund to pay for typical government functions.

“There will be no cuts in services,” said Town Finance Director Kevin Swain, elaborating that the town will continue to operate “just like it did last year.”

“It’s business as usual in Mountain Village,” he said.

Unlike the current year when the town dipped into its reserves to balance the budget, the 2011 budget projects a $450,000 surplus if all goes according to plan.

Still, “We’re not going to count those chickens before they’ve hatched,” said Swain.

While visitors and residents should not notice any service reductions, some spending like that for major paving projects and vehicle acquisition, will be deferred.

‘We don’t have a lot of money for overlay,” said Swain, anticipating that the town will deal with potholes and road problems with spot repairs.

Fleet vehicle replacement, save for a front end loader and two, largely grant-funded street sweepers, will also be deferred, according to Swain, who described the town’s capital improvement budget as “very lean this year.”

“I think it’s conservative and will be an achievable budget,” he said.

No Guarantee on Society Turn Roundabout Funding

One item that is not yet in the recently approved Mountain Village budget is a contribution being sought by the Town of Telluride to help pay for the installation of a roundabout at Society Turn.

The Colorado Department of Transportation, which has deemed the intersection dangerous, has agreed to build a roundabout there in 2012 to ease traffic (as preferred by the community), rather than the less expensive traffic signal for which the agency has full funding. To do so, however, it must receive a funding commitment for the $$900,000 cost difference between the two projects.

While the Telluride Town Council set aside $300,000 in it’s 2011 budget to help pay for the cost and is also seeking grant funding, it also hopes to receive contributions from Mountain Village and San Miguel County to offset the cost of the improvements.

When Telluride Town Manager Greg Clifton approached council last week with a request for $50,000 to support the project, he instead got support from five of its seven members for $25,000 – and then only if the county agrees to a significant contribution.

“The roundabout is not in Mountain Village, it’s not even contiguous to Mountain Village and I just don’t think it’s a Mountain Village problem,” said Delves, explaining his opposition to funding the project.

“It’s not appropriate for Mountain Village taxpayers to pay for traffic improvements outside the boundaries of town,” he said, particularly with town staff enduring pay increase freezes and services being reduced.

Clifton said that CDOT plans to begin construction at the intersection in April 2012, and that the work will span most of the summer.

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