At its meeting on Sept. 3, the Archuleta County Board of County Commissioners (BoCC) tabled its decision to move forward with a letter of intent, as well as a purchase and sale agreement, with Arena Labs for the purchase of five acres property to construct a new county administration building.
With the same motion, the BoCC also tabled a decision on moving forward with a letter of intent with Pagosa Partners I for the purchase of approximately 5.5 acres of land. That property is located in the Aspen Village development at 2901 Cornerstone Drive.
According to the proposed letter of intent, the property would be $10.75 per square foot for a total of $2,584,850.40.
The BoCC recently heard a presentation during a regular work session on Aug. 20 from representatives with Arena Labs in regard to the planned development on the 100 acre property located across South Pagosa Boulevard from Pagosa Springs Medical Center (PSMC).
At the beginning of the Sept. 3 meeting, multiple public comments were made on the topic, with members from the public voicing concerns about the costs of purchasing land and wanting more transparency from the board.
“That’s the one thing I really get upset about; everybody here wants to worry about it when the tire meets the road,” Commissioner Ronnie Maez said, adding the board has had multiple public meetings and discussions on the matter.
One of the public commenters voiced concern for the project with the potential traffic effects on what is a residential area.
Another member of the public, Bill Hudson, expressed that the current BoCC is one of the most transparent boards he has seen in the county, but that he is unsure why this particular topic has not been treated with the same level of transparency.
Hudson also suggested that the county could pursue acquiring an existing building and have it remodeled.
Commissioner Veronica Medina explained that the county attorney and previous county manager instructed the board not to discuss details about the properties because it would hinder negotiations.
She went on to mention that this was an appropriate time to disclose the other properties being looked at: the old Sears building, the property with Arena Labs, a property at Harman Park and the property with Pagosa Partners I.
Medina indicated that she suggested during a previous work session that the county give all the information to a financial advisor to do a cost analysis of each option.
She explained that the only existing building “to surface” as an option for the county to reuse is the old Sears building located at 2800 Cornerstone Drive.
Medina also noted the construction of the new transit center at Harman Park has experienced unforeseen costs due to the rocky terrain of the property.
Later in the meeting, when the items with Arena Labs came up, County Attorney Todd Weaver explained that the item was previously tabled at the BoCC meeting held on Aug. 6.
Weaver also explained that the BoCC approved a resolution during the April 2 meeting which set aside $3 million for the purchase of property.
He noted that that money comes from the Local Assistance and Tribal Consistency Fund (LATCF) and Payment in Lieu of Taxes (PILT) money, which is federal money, not local taxpayer money.
Weaver mentioned the BoCC has been discussing purchasing property for a new administration building for over a year.
Maez questioned if the administration building would be subject to a homeowners association, with Weaver indicating the county would be exempt.
Maez further expressed that he is “not satisfied with the letter of intent,” noting there are multiple unknown details, such as a project timeline.
Commissioner Warren Brown commented that he was in agreement with Maez about being unsatisfied with the letter of intent.
Brown mentioned that he “languished over this decision,” explaining he has been languishing over it since the county first expressed interest in selling the old courthouse building in downtown Pagosa Springs.
“We have three years left to move people,” Brown said, noting that he is not opposed to having additional public meetings to further discuss options.
Brown mentioned he would like the county to look for professional advice from a financial advisor.
“We’re elected by the people to make these decisions,” Maez said. “The right thing’s the hardest thing to do.”
Brown mentioned that he would like to have a timeline set as to when the BoCC would make its final decision by, suggesting the first regular meeting in December.
County Manager Jack Harper explained that there is typically no cost to the county to bring in a financial advisor, but once a project is picked, the financial advisor receives a percentage as partner payment.
Harper noted this to be “standard practice.”
Brown encouraged the board to engage with a financial advisor, “to give us a real apples-to-apples comparison” in looking at the costs of each option.
Brown noted this would provide the community with transparency about the process.
Maez indicated that he would like to see the county move forward with the property located in Aspen Village.
“It would be prudent of us to get a financial advisor to show us what the cost would be,” Medina said.
Maez spoke about how the previous BoCC went through a similar process with the construction of a new jail and courthouse, and there was still pressure on the board to make the correct decision.
Weaver, in response to public comment received at the meeting, explained that, due to state statute, the new administration building will need to be located within town limits as Pagosa Springs is the county seat for Archuleta County.
Brown explained that he wants to make the “right decision.”
“I don’t think 60 days will smother the right decision,” he added.
“I think it will,” Maez said.
“I don’t think 60 days is going to kill the right decision,” Brown replied.
“We’ll see in 60 days,” Maez said.
Medina opened the item up for another round of public comment.
Some of the public comments included concerns about how the county is able to move forward with a letter of intent before Arena Labs actually owns the property.
Weaver explained that the county would not move forward if Arena Labs does not close on the property.
Other public comments expressed favor for the county to consult with a financial advisor, and that the county has a duty to be fiscally responsible.
One comment mentioned that Harman Park would be the most ideal considering the county already has its new jail and courthouse there, and the transit facility being constructed there.
Maez explained that due to the size of the area available in Harman Park, the administration building would have to be a multistory building, therefore raising construction costs.
Audience member Rachel Suh also commented on the matter, saying that the board also has an ethical decision to make, alleging the public has been misinformed on the matter.
“It is not just a correct and right decision we are making here. We also need to make an ethical decision here,” Suh said.
Suh went on to speak about the recent recall efforts of Medina, with Weaver interjecting, saying that was not appropriate in relation to the item that was opened for public comment.
Following disagreement by Suh and additional conversation about the recall effort (see related story), Medina closed public comment and asked, “So, commissioners, what do you want to do?”
Brown motioned to table the decision on both properties until the board is able to identify and contract a location for an administration building while directing staff to bring a financial advisor in who can advise BoCC with cost details of purchasing and remodeling an existing building versus purchasing vacant land and constructing a new building.
Brown’s motion also included the BoCC to make a decision no later than the first regular meeting in December.
The motion was seconded by Medina and passed with a split vote of 2-1, with Maez opposing.
Work session
At a regular work session held by the BoCC on Aug. 20, the board heard a presentation from David and Heidi Dragoo, with Arena Labs, in regard to the proposed site for a new county administration building.
David Dragoo explained the site of the proposed new administration building is located off of South Pagosa Boulevard and just east of PSMC.
He explained that the proposed county site is part of a bigger development planned for the area on a property that is about 100 acres in size. The proposed site for the county administration building is in the southwest corner of the property.
At a regular meeting held by the BoCC on Aug. 6, the board tabled the decisions on a letter of intent to purchase the five acres at a cost of $10 per square foot, totaling at $2,178,000.
David Dragoo explained at the work session that the master plan for the site has about 58 acres, mostly the southern portion, zoned for residential developments and about 45 acres zoned for mixed-use developments, including commercial developments.
He explained the plan will consist of multiple development phases, beginning with the county’s administration building due to utilities being close by.
Dragoo indicated there is a 8-inch main sewer line in the southeast corner of the proposed site.
The developments will occur starting with the new administration building in the southwest corner of the property, with additional phases working eastward, he explained.
“I think that makes sense,” he stated.
He added that his organization has been in conversation with the Pagosa Area Water and Sanitation District (PAWSD) and La Plata Electric Company (LPEA) about the project.
He indicated that both PAWSD and LPEA believe there is sufficient infrastructure in place to serve the first two phases of the proposed developments on the property, which include the new administration building and 96 rental apartments intended to serve the community’s workforce population.
“LPEA believes there’s sufficient utilities there for electrical for at least the first two phases,” he said, adding that redundancies in the system are currently being built in.
He also mentioned that PAWSD “didn’t seem concerned at all.”
It is estimated to cost around $200 per foot to be able to bring the utilities from the lot line to the building, he explained, noting that to be a “normal” price.
He also noted there are no environmental issues or wetlands that would affect developments on the 100-acre property.
He went on to mention that Arena Labs is working with partners regionally and locally to support the development, noting he has been in communication with local businesses that are “very supportive of workforce housing.”
“I think it’s a huge need,” he added.
David Dragoo explained there are multiple studies currently taking place in the county, including a traffic study, hotel study and a housing/market study.
“I think those are going to give us a good overview of the feasibility of some future phases, and I think showing the need for housing,” he added.
He noted the first phase of housing development will be on approximately 3.5 acres.
Heidi Dragoo indicated that the first housing development may have up to 96 rental apartments that would serve the “missing middle” market.
She explained the units would be priced to accommodate residents that earn between 80 and 100 percent of the area median income (AMI).
According to the Department of Urban Housing and Development (HUD), AMI is defined as “the midpoint of a specific area’s income distribution and is calculated on an annual basis.”
Along with HUD, the Colorado Housing and Finance Authority (CHFA) calculates and updates AMI levels for counties in the state of Colorado.
According to CHFA, 80 percent AMI for a single-income household in Archuleta County for 2024 is $52,800, and 100 percent AMI for single-income household is $66,000.
Heidi Dragoo explained the first housing development will be located directly east of the proposed county administration building site.
She explained the Town of Pagosa Springs has applied for a grant that would help cover the cost of the public infrastructure construction that is needed for the development.
She noted that the grant was submitted in July and that a notice of award would come in November, with funds being made available early 2025.
The public infrastructure would include construction of a road, sidewalks, utilities, landscaping and a “very basic transit stop,” she explained.
She also mentioned the town is planning to present the development plans at a public hearing toward the end of October.
“The town has been great to work with and to partner with on that application,” she said.
Heidi Dragoo went on to explain that the Proposition 123 funding is available through the state.
The proposition created a state housing fund with 40 percent of funds going toward affordable housing support administered by the Department of Local Affairs (DOLA), and 60 percent of funds going toward affordable housing financing that is overseen by the Office of Economic Development and International Trade.
“Really, the idea is to create a pathway to ownership for the local workforce,” she added. “The state really loves that concept.”
David Dragoo noted the town has already agreed to provide about $60,000 in fee waivers for the project.
He explained that one of the “keys” to a vetted grant application is having a project that activates multiple housing sites.
Heidi Dragoo explained that the units would be priced “right below market rate.”
She explained that these units would likely house teachers and first responders in the community.
“The folks that run the community,” she said.
She also spoke about conversations she’s had with local business owners and the challenges their employees face with finding housing.
“We’ve heard some crazy stories,” she said, mentioning stories of multiple employees sharing a one-room apartment and people living off grid and on national forest land.
“It’s kind of incredible the stories that we’re hearing as we talk with different employers,” she said.
Heidi and David Dragoo both explain the importance of a public/private partnership on projects like this, noting that is the only way to be able to afford to complete the construction and still be able to offer rental and ownership opportunities at below-market rates.
Brown asked if Arena Labs has a “plan B” if the grant money is not awarded.
David Dragoo explained that if the grant money is not awarded this round, they will be going after another round of funding.
He also noted that scaling down the project is a way to reduce cost.
“We have been very successful with some other rural communities that we’re working with,” Heidi Dragoo said in regard to receiving DOLA funding through Proposition 123.
David Dragoo noted that the grant is a “competitive” grant.
He also explained that Arena Labs has been in communication with the Pagosa Springs Development Corporation and making sure that multiple local organizations are not going after the same grants.
He went on to explain that Arena Labs has also been in communication with the surrounding neighborhoods of the proposed developments and that the general consensus is everyone is on board with the project, as long as it does not create more short-term rentals (STRs).
Medina commented that the “way this is being sold” is that the developments will provide workforce housing for the community and that she would like to see a way that the housing developments can never be turned into STRs.
In response to a question from Brown, Dragoo explained the overall timeline for the project could range from 10 to 20 years, depending on a number of factors.
He mentioned Arena Labs is currently in year six of a 25-year development project in Montrose.
clayton@pagosasun.com
