Breckenridge is looking to start construction this summer for a neighborhood slated to displace free skier parking in town as clearer details regarding financing emerge.
Up until a March 11 Breckenridge Town Council meeting, the town's "Runway Neighborhood" project that will feature a mix of housing types didn't have a tentative cost estimate that town staff members felt confident making public. They said determining the phases of construction, the types of units and the number of units were factors that would need to be solidified before throwing out a potential cost for the project.
After a handful of meetings hashing out the number of units, officials landed on around 148 units including 45 townhomes, 42 duplexes and 61 single-family homes, with the possibility of accessory dwelling units on some of the single-family homes. Town housing staff members gave officials two financing options based on these numbers: a $46 million town subsidy over five years or a $50 million subsidy over six years.
Most council members leaned toward staff's recommendation of choosing the $50 million subsidy route, but they wanted more vetting and analysis from the town's finance department. They expressed wanting to see a thorough, conservative approach amid uncertainty with available federal and state grant funding.
"As far as a town-owned (and) directed development, this is it, there's no more learning opportunities," Council member Carol Saade said. "We need to take all our learning opportunities and apply them (here.)"
She urged staff members to consider the takeaways from a presentation given by the Bell Policy Center, which is focused on economic mobility for Colroadoans, regarding the importance of using data and community input to guide and validate this housing investment since there's little room for mistakes.
Housing manager Laurie Best said staff members did take that into account. She said it's the driving force behind the recommendation to choose for the $50 million subsidy. Feedback from the Stables Village project showed residents wanted more affordable offerings, she said. Residents told staff members and elected officials the triplex, duplex and single-family homes offered in the project geared toward the workforce weren't genuinely affordable for them. A handful of triplexes in the neighborhood cost around $373,000 ranging up to around $490,000, but a bulk of the duplexes available costs $550,000 to $700,000.
"This is one of our last opportunities to really provide some truly affordable units. ... Option two is just to get the price points down so that we can serve the folks that have not been able to access our housing in the past, and we always do hear that housing is too expensive," Best said.
She said spreading the project out over another year with an increased subsidy lowers the sale price for units in the deed-restricted neighborhood. Under both financing proposals, 2-bedroom townhomes cost $351,000 and 3-bedroom townhomes cost $450,000. A three-bedroom duplex would cost around 620,000 with the $46 million subsidy, and it would cost $575,000 with the $50 million subsidy. Similarly, the single-family, 3-bedroom cottages would be $20,000 cheaper with the $50 million subsidy than the $46 million subsidy, which would bring them to $680,000.
A staff memo presented at the March 11 meeting said "given what we know today, the updated project cost will negatively impact the Town's 2029 KPI cashflow by $26 million."
The memo said to retain the town's targeted break-even cash flow of $135 million, staff will have to look into opportunities to reduce spending elsewhere. A pause on the town's Buydown Program, where it purchases homes for sale and places a deed-restriction of them to then sell the homes for a reduced price, was thrown on the table as a potential cost saving measure. Staff estimates a pause could provide $13 million over five years.
Council member Dick Carleton said he would be in favor of pausing the program temporarily because the town and county's Housing Help program serves a similar purpose.
Mayor Kelly Owens and Saade did not want to pause buy downs.
Council member Jay Beckerman was the only one not behind the $50 million subsidy plan. He wanted to see a $46 million subsidy spread out over six years and thought pausing buy downs wasn't the right choice.
"I feel like there is a detrimental effect of spending beyond our means, where there is the ability to invest in these amazing programs," he said.
A unique aspect of the Runway project which officials showed support for was the town moving away from using current area median income evaluations as staff members feel it doesn't accurately represent how much people make and what they can afford. They said area median income thresholds are volatile in that they are constantly changing and will change by the time units go on sale in over five years from now. There will still be income testing to accurately place people in units they can afford, staff members said.
The town's recent offer to the Summit School District to swap a land parcel it owns for 35 reserved for district employees in perpetuity will be another unique element to the project, if the district agrees to the swap which it has not officially yet. Housing for purchase would be put out in different phases and the district would be guaranteed a certain percentage of units in each phase.
Housing project manager Melanie Leas said there will likely be multiple lottery processes because of this, one for district employees and one for everyone else.
Next steps for the Runway Neighborhood include finalizing plans, establishing deed-restrictions, approving a guaranteed maximum price and executing the development contract. While it could be the last neighborhood to be built from scratch in Breckenridge, it could be one of the first town-owned workforce housing projects in Colorado that relies on geothermal energy for heating, cooling and hot water for every unit, according to town staff members.
This story was made available via the Colorado °µºÚ±¬ÁÏ Collaborative. Learn more at https://colabnews.co