At its June 5 meeting, the Archuleta County Board of County Commissioners (BoCC) approved drafting a letter of intent to purchase a piece of property south of U.S. 160 near South Pagosa Boulevard for the construction of a new county administration building.
This action followed the BoCC hearing a proposal from local real estate agent Shelley Low and developer Doug Dragoo, representing Colorado Outdoors, for the construction of a new county administration building at the site at a May 21 work session.
Low opened the discussion, explaining that the proposed building would be part of a planned development on the south side of U.S. 160 between South Pagosa Boulevard and the U.S. 160/Pinon Causeway intersection.
She explained that the land is “very level” and is located near City Market and Pagosa Springs Medical Center (PSMC).
Low indicated that the project would include 42 acres of commercial development with access to be located directly across South Pagosa Boulevard from the PSMC entrance and 57 acres of a variety of residential units, including “high-end homes,” “professional homes,” and “hopefully some senior apartments.”
She stated that the project would include a trail system and parks, and would incorporate amenities such as restaurants.
The commercial property would also be separate from the residential areas of the development, Low added.
She indicated that the proposed location for a county administration building would be located on a parcel near the entrance to the commercial portion of the development and that the parcel could be sized at four acres, 4.5 acres or five acres, depending on county preferences.
She stated that the developer would be willing to build the new county administration building to suit the county.
Dragoo explained that the project began as an effort to find land for workforce housing development, but that this parcel of land was particularly interesting due to his company having experience creating larger developments in rural Colorado, which he noted is difficult.
He stated that Colorado Outdoors is completing a large development project in Montrose which contains a hotel, a manufacturing location for a distillery and housing.
The proposed development in Pagosa Springs would work similarly to the Montrose project, Dragoo stated, indicating that businesses involved in the Montrose project can either purchase the property for their business or lease it from the developer.
He added that one benefit of this approach is that businesses can purchase exactly the size of parcel required for their parcel, avoiding costs from buying excess land.
He indicated that Colorado Outdoors plans to build 120 units of area median income (AMI) restricted workforce housing as part of the development, partially to address the need for housing for employees of companies on the site.
Dragoo then noted the value of the state Proposition 123 programs and that these programs require that developers go through local nonprofits or governments to obtain funds.
He stated that these programs are important because the state funds they provide make possible affordable housing projects that would otherwise be impossible to construct.
He noted that Pagosa Springs has a rural resort designation under Proposition 123, making the AMI levels allowed for affordable housing funding higher than they would be without the designation and making the project easier to finance.
The project would initially be built around the county building and affordable housing project and would grow over time, Dragoo indicated, adding that he would also hope to add hotels, convenience stores and banks to the project.
Low commented that the project would also potentially include retail stores, a Mountain Express Transit stop and a small events center, emphasizing that the commercial and residential elements of the project would have to be “synergistic.”
She concluded by stating that the developer could build a new administration building to suit the county or the county could purchase property for the building.
Commissioner Ronnie Maez commented that the land use code often incurs a “huge cost on development” due to aesthetic and other requirements, and asked Dragoo if he knew what the cost to build workforce housing to meet the land use code would be.
Dragoo replied that the cost is about $325 per square foot and stated that his company typically records covenants as part of a project, which limit building colors and provide requirements for building materials.
He added that other buildings the county has had constructed fit the style he would expect and that the covenant requirements help maintain neighborhood appearance and property values.
Maez noted that he would prefer to have fewer aesthetic requirements to improve affordability, and Low pointed out the desire for synergy in the appearance of the development.
Commissioner Warren Brown asked if geotechnical surveys have been done at the potential site for the county building, commenting that the county has experienced issues with large amounts of rock near the surface at other county building projects.
Dragoo commented that the company does not have a current geotechnical report for the site of the county building, but that such a report could be done “fairly quickly” and could be incorporated into whatever transaction might occur between the developer and the county to construct a building.
He added that the planners for the development have done some assessments based on historical data and do not expect any issues with rock in the area, although he noted such issues are always possible.
Dragoo also noted that the property is large enough that the county building could be relocated to another location on the property if issues with rock or other geotechnical problems emerge.
Commissioner Ronnie Maez asked if the site has water, sewer and other utilities.
Dragoo replied that the proposed site for the county building would have utilities nearby.
He added that the developer plans to submit a master plan to the Pagosa Area Water and Sanitation District (PAWSD) to get assurances that the district could service the entire project.
He stated that, if PAWSD cannot service the entire project, it could be built in phases.
The group then discussed the specifics of the sewer and water infrastructure for the project, with Dragoo explaining that getting sewer and water to the site would likely be relatively simple given the existing infrastructure.
He also stated that a primary exit for the project would be at the intersection of Pinon Causeway and U.S. 160, which would change from the current three-way stop light to a four-way stop light.
Brown asked if installing driveway access from South Pagosa Boulevard to the project would fall on the county, the developer or other groups interested in building in the area.
Dragoo stated that, in conversations with former county manager Derek Woodman, Woodman indicated that the county would bring the road 500 feet into the development and that the developer would be responsible for it beyond that point.
He added that the details of this arrangement would likely come down to the financial details of the project and what arrangement emerges between the county and the developer.
Dragoo noted that applications for Proposition 123 funding require a match from local government and stated that the developer is thinking that the construction of 500 feet of the road system could serve as this match.
He added that the county administration building project “is really important for the whole project because it gives a jump start.”
Dragoo commented that the administration building would serve as an “anchor” for the rest of the project, allowing the developer to begin building roads, bringing in utilities and taking other actions.
He noted that the state prefers road construction as part of workforce housing grants that serve multiple interests beyond the housing itself.
Brown asked if the affordable housing would be for rental or purchase and, if it is for rental, how the AMI restrictions would apply.
Dragoo explained that the housing would be for households between 80 percent AMI and 120 percent AMI and would be deed-restricted.
He added that the cost for affordable housing is similar to building a “market-rate unit,” but that the developer would receive grants from the state to lower these costs.
“They’re not low-income, Section 8, … people running around with the meth lab down the street,” Dragoo said. “This is police officers, nurses, guys working at restaurants. It’s that kind of user.”
He stated that the affordable housing would likely focus on rental, but that the project would also offer units for sale where those living in affordable housing could potentially move when they’re able.
Dragoo also commented that the state has been highly successful in crafting a down payment assistance program and commended the state’s efforts to support affordable housing, noting that such housing is critical to allowing employers to fill positions and employees to take new positions.
Maez highlighted that the county has an affordable housing property tax waiver program, which Dragoo stated that he plans to take advantage of.
County Attorney Todd Weaver asked if Colorado Outdoors has closed on the property, which Dragoo stated it had not.
Weaver then asked where Dragoo was with the Town of Pagosa Springs’ land use approval process, adding that he wanted to know if it would be feasible for the county to break ground on the project next spring.
“That would be perfect timing,” Dragoo said, adding that Colorado Outdoors plans to refine the master plan prior to submitting it for town approval.
He stated that he could close on the property “at any time” between now and when the master plan is approved.
Dragoo added that the county beginning construction in the spring would be ideal as it would allow the county time to complete the plans for the administration building prior to beginning construction.
He commented that this planning occurring alongside the completion of the master plan would allow the county to provide input on this plan.
Weaver asked and Dragoo confirmed that the development is planned to occur in stages.
Following an executive session at the June 4 BoCC meeting, Weaver introduced an agenda item for the board to consider entering into a letter of intent to purchase property for the construction of a new administration building.
He added that the item would also cover the commissioners giving direction to staff to move forward with the purchase of property.
He explained that the board had heard the proposal from Low and Dragoo weeks earlier and that Dan Sanders, representative for Pagosa Partners I Inc., the owner of a property at 2901 Cornerstone Drive near Walmart in Aspen Village that the BoCC was also considering, was present at the meeting.
BoCC chair Commissioner Veronica Medina explained that she is a licensed Realtor but will not realize any personal gain from the sale of either of the properties.
Maez asked Sanders if the county would have to pay annual dues to the homeowners association (HOA) of the Aspen Village subdivision if it purchased property within the subdivision.
Sanders explained that the area has a “masters association” and that, if the county purchased the Aspen Village property, the county would own about 9 percent of the overall development, meaning it would have to pay approximately $400 a month in association fees.
Maez asked if there would be a way for the county to be “excluded from that.”
Sanders replied that he believed there would be and would not object to such an exclusion, although there would be “things we’d have to work out” given this property shares common property, such as sidewalks and landscaping, with other properties in the association.
Maez commented that he is not familiar with the exclusion process and questioned if it would go to a vote of the association members.
Weaver indicated that this process is usually set out in the association covenants and bylaws.
Sanders stated that he could provide the masters association guidelines to Maez if the county moved forward with this property.
He added that the county would have to adhere to these guidelines, although he commented they are “not restrictive” and would have to submit the proposed plan for the property to the masters association design review committee for approval.
Sanders stated that this committee has so far not had a problem with any proposal not being able to be made to fit both the desires of the design review committee and the property owner.
Maez then asked Low about if the county would be required to be in a HOA if it purchases the property she had offered.
Low stated that there are currently no community covenants on the property.
“So, there’s a possibility that the county can just buy what acreage it needs and it’s on its own?” Maez said.
“I’d have to discuss it with the owner, but I do believe that’s a very good possibility,” Low replied.
She added that the amount of acreage the county could buy in this development would be flexible.
Maez explained that he was asking about HOA membership because committing the county to being part of a HOA is “still weighing on me a bit … and I don’t want to have to commit the county to paying HOA dues or HOA development or stuff like that and commit in future either, but in this case it’s kind of pretty much same thing with either of the two developments.”
Low emphasized that the owner is “very flexible” about arrangements concerning a HOA.
Brown commented that he appreciated Low’s previous presentation and that he appreciated Sanders being at the meeting and felt the piece of property he is offering is a “very good piece of property.”
Brown noted that this property “may be a tad bigger than what I think the county should have, but I think that it is a very buildable lot there.”
He commented that he feels the property being offered by Low and Dragoo would “also work fine for the county.”
Brown stated that the two pieces of property are “pretty equal,” with the property being offered by Low and Dragoo requiring the installation of roads and utility access while the property being offered by Sanders already had these amenities.
He added that he believes that the cost of both properties would likely be ultimately similar.
Medina commented that Sanders’ property is a “great location,” but that it would “better serve businesses that need that frontage exposure.”
“I think we would be taking a piece of property … that could have a better use with different type of a business,” Medina said.
She indicated that she agreed with Brown that the properties are generally equal and stated that she liked the lot being offered by Dragoo since the county would be an “anchor property to start some development that we absolutely need in this community which would then drive sales tax, also drive other small businesses to start and then also have those … other services available for locals.”
She stated that it is a “tough decision” and that the county had looked at “at least five properties.”
“We’ve definitely done our homework individually, with the county attorney, county manager and staff.Staff has been crucial in finding out information for us on … trying to get it down to where we are now,” Medina said. “Again, my thought is just looking at that possible impact for the community overall is kind of where I’m landing, but thank you both for your time.”
Maez stated that he was “thinking a little more” about the issue, and Medina stated that he could do so before noting that each commissioner had made a statement and opening the floor for motions to select a property.
Maez then consulted with Weaver outside the meeting room prior to asking both Low and Sanders if they had any alterations to offer to the proposed prices for the properties.
Both indicated they did not.
Maez commented that he wanted to ask this question “because I didn’t want somebody to ask me, ‘Why didn’t you ask that question?’”
Medina then asked for a motion and following a pause where no motions were offered, began making a motion.
Maez interrupted, stating that he did not feel it was appropriate for the chair of the BoCC to make a motion “on something the other two commissioners are still thinking on.”
He added that he was ready to make a motion.
“OK, I just didn’t want it to die for lack of a motion,” Medina said.
“It wouldn’t die,” Maez replied.
“I was being patient,” Brown said.
“I’m thinkin’, man,” Maez said.
“I’m over patient. Let’s get it goin’, guys,” Medina said.
Maez then moved to direct staff to negotiate a letter of intent with Dragoo for the purchase of the property at X West U.S. 160 and “bring a letter of intent back before the board for final approval.”
The motion was seconded by Brown and passed unanimously.
josh@pagosasun.com
