The only action item before the Estes Park Town Board went into an executive session at the September 25 board meeting was the approval of Resolution 76-24. This was a last-minute loan closure requirement to go into a moral obligation agreement with the Estes Park Housing Authority (EPHA) on a bridge loan to round out financing for the purchase of Fall River Village, a workforce housing project.
First presented to the Town Board in June, and finalized in July, it had been presented several times that a bridge loan of what ended up being $2.45 million would need to have the “good faith” backing of the Town. The loan closes on Monday, reported Pete Levine, EPHA’s Director of Real Estate Development, who presented financial information supporting EPHA’s plan to achieve solvency by the end of year two.
The decision to enter into this agreement was not unanimous. Town Trustee Mark Igel started the discussion by saying, “I’m going to be very reluctant to morally obligate my peers here, and future board members, as we move through this,” he said, “So, I’m looking forward to a very strong financial presentation and a lively, spirited conversation about this. Because this is something new for us, for our community.”
Fall River Village is a resort property owned by the Grand Heritage Group and offered up to EPHA for purchase at $35 million, which is lower-than-market value.
The complex includes 90 townhome-style lodging units that will be turned into housing for those who work a minimum of 30 hours a week in within the Estes Park School District boundaries, and whose income is about 70% of the Area Median AMI).
These would be ready for occupancy as early as Dec. 1, said Levine, after an agreement to allow the Sky View wedding venue to fulfill their contracts with clients.
The EPHA starts operation Nov. 18 to get most of the units ready for occupancy.
The property also has several luxury top-floor condominium units that will be put up for sale after year two, said Levine. Recent interest-rate cuts and structuring the loan so that it remains tax-free has resulted in a loan-to-purchase value of 108%.
However, the bank required EPHA have a moral agreement, approved by the Town Trustees by vote, in place at closing, which states that the Town is “obligated” but not legally required to make up the difference if the EPHA, which is affiliated with the Town through memos of understanding but is a separate legal entity, defaults on the loan.
Citing the Colorado Revised Statute, Scott Moulton, executive director of the EPHA, said in an email to the Estes Valley Voice, “A housing authority shall constitute a public body, corporate and politic, exercise public and essential governmental functions, and have all the powers necessary and convenient to carry out and effectuate the purposes and provisions of this part 5…”
Mayor Gary Hall voted yes on the resolution, saying the purchase of Fall River Village “is a rare opportunity, the proximity to downtown, the number of units that are in there. So thank you very much for all the hard work.” The measure was passed quickly, with Trustee Kirby Hazelton making the initial motion and Trustee Cindy Younglund seconding; the final vote was 6-1 with Igel dissenting.
When asked why he voted no, Igel stated the following: “In the meeting (on September 25) I asked several questions that I knew the answer to, since the town cannot legally commit future boards or funds to multi-year commitments. As we heard last night there’s a way around that law (the Taxpayer Bill of Rights, or TABOR), to morally obligate future boards or ourselves … and I disagree with what feels like a loophole strategy of a law that is designed to protect taxpayer funds. Attorney Kramer was correct when he referred to other organizations using this method to make multi-year commitments essentially, but I’ve never really been one to do things just because other people do it.
“I think the question you, and taxpayers, should be asking this morning is of those trustees who voted yes, why they voted yes?” Igel said.
Workforce housing and affordable (or low-income) housing defined
Igel also wanted the public to know the difference between “workforce housing” and “affordable housing;” Moulton offered the following explanation:
“Affordable (housing) is oftentimes discussed in our community in a way that means income-qualified, which is typically focusing on 60% area median income, or below,” he said. However, the “definition of affordable is that the household is not paying more than 30% of their income toward their housing costs.
“Workforce housing does not come with income restrictions, but only comes with a work requirement, meaning that one occupant 18 years or older needs to work within the school district boundaries; that’s what qualifies as workforce housing. Our goal, and all of this, including Fall River Village…is to keep those rents as reasonably low as possible, to ensure that the majority of our workforce can pay no more than 30% of the income towards their housing costs.
“This project, as we originally presented to you, I believe in June, achieves a blended area median rent of 73% AMI, so that is significantly lower than the Prospect Apartments that were mentioned earlier this evening. So, I just wanted to highlight those definitions briefly for this conversation.”
Trustee Bill Brown does not own the Estes Valley Voice
In other Town Board News, Trustee Bill Brown reported that he was not the owner of the Estes Valley Voice, although his name is listed with the Secretary of State as the “registered agent” who filed the papers for incorporation.
“I was the coordinator of it, as lawyers frequently are, but it is not owned by me, It’s owned by my wife,” Brown said. “I understand there’s issues with that, and we’re very sensitive to that. She was a long-term social worker and I, a lawyer, we had things we couldn’t talk to each other about that would intersect on occasion. So, we’re very sensitive to that,” he said.
“She’s funded it entirely by herself.”
The next Town Board meeting will be held on October 8, beginning at 7 p.m. in Town Hall in downtown Estes Park.