Robust market pushes housing projects ahead
Post Independent | John Stroud | March 1, 2017
A hot housing market has developers of at least one already-approved apartment project in Glenwood Springs looking to more than double the number of units, and they might not even need a new fee waiver adopted by the city to do it.
The Lofts at Red Mountain, which is part of the larger Glenwood Meadows development, is one of several projects approved or on the table in Glenwood that could take advantage of a new incentive program to waive certain impact fees in trade for some apartments being offered under a 30-year deed restriction to keep rents affordable to middle-income earners.
“We have discussed it, and we are reviewing that,” said Dylan Leonoudakis, vice president of development for Realty Capital Management, developers of the planned Lofts project. “We are happy that the city is looking to encourage development of this type of housing.”
But a proposal coming before the city to expand from two buildings and 88 apartments, as approved by the city in July 2015, to five buildings and up to 185 units, is being driven by the current housing market, he said. The proposal would serve to build out that portion of the residentially zoned sections of the Meadows.
“We’re pretty excited about the market and are looking forward to starting construction in late spring,” Leonoudakis said. “There is strong housing demand in Glenwood Springs, as we have known for some time, and we look forward to bringing a quality product that people will enjoy.”
The Lofts, followed shortly by the 116-unit Oasis Creek Apartments on U.S. 6 that also won approval from the city in early 2016, served to spark conversation among city officials about how to provide incentives for developers of smaller residential units, especially rentals.
When the Lofts project won the city’s approval, Leonoudakis and his business partner, Richard Myers, were quite vocal about the city’s impact fees for such things as water and sewer utilities, parkland dedication, emergency services and schools, being cost prohibitive.
“We are not looking to avoid our fair share of impact fees, but without some relief from the current fee structure there is no way for us to help address the need for quality affordable housing in Glenwood Springs,” Leonoudakis wrote in a letter to City Council at the time.
The concerns prompted the city to begin looking at ways to reduce some fees and to provide waivers for any developers who would agree to place deed restrictions on any rental units they proposed to build.
Since then, the city did adjust its water and wastewater system impact fees to encourage construction of smaller units. More recently, City Council also approved a means for developers to qualify for fees to be waived altogether on units that carry a voluntary, 30-year deed restriction holding rents to a level that’s attainable for households earning below 120 percent of the Garfield County area median income.
Tenants of those units must also be employed by a business with a physical address within Glenwood’s 81601 ZIP code, or have a home business that conforms with city guidelines.
Tyler Richardson of Richmark Companies, developers of the Oasis Creek project, said his group is still working the numbers to see if it makes sense to proceed given current market demand. However, Richardson said the project is not likely to take advantage of the new fee-waiver incentives.
“This is a market-rate project and was always intended to be that,” he said.
Another developer who was floating preliminary plans for an apartment project on Midland Avenue, which was ultimately shot down by City Council, had an interesting take when asked if he would make use of the fee waiver incentives. Craig Helm said that, even though rental units in his project might fit the price points for deed restrictions, management of deed-restricted units is a concern.
“It does create a lot of extra work to deal with the administration of that,” Helm said, adding that turnover of the units based on the tenant restrictions favoring local workers could be onerous. “Just when you get a good tenant in, they might have to move just because they get a new job outside of Glenwood Springs.”