Extended vesting important for some Steamboat developments
August 9, 2013
Steamboat Springs — A down economy and the scale of a project are factors in requests for extended vesting, said Tyler Gibbs, city of Steamboat Springs Planning Department director.
Whatever pressures are most relevant to a given project, a balance must be struck between promoting the success of a proposal and ensuring public safety.
"From the city's perspective, we're trying to make sure if something continues out for a number of years — if there's been some significant change in code — that we still have the opportunity to look at that," Gibbs said.
The standard vesting period for projects that make their way through the city of Steamboat Springs planning process is three years with an additional two years available through an administrative extension. In some instances, the extension can be three years if a significant infrastructure investment has been made.
If a project's vesting expires, it would have to resubmit the application and be subject to the most current regulations. The cost and time associated with going back through the application process and possibly needing to update materials make extended vesting especially attractive to developers.
"I think we've seen that for several years now for the larger projects that legitimately look like they will take longer to build out," Gibbs said about requests for extended vesting.
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Steamboat's real estate market, while gradually showing improvement, still is lagging far behind Denver.
Eric Smith, of Eric Smith Associates planning and architecture, recently was considering asking for a 10-year vesting extension for two projects at Bear Claw on the mountain before finding out the project could get an administrative two-year extension.
"I think it could be six or eight years before values return enough," Smith said about the market for revamping older developments like Bear Claw. "I think we're going to see the market in terms of new construction come back sooner. In the right properties, the market is coming back. It's not going to come roaring back."
Taking the two-year extension is much less expensive than going through the application process, Smith said, but it's likely the project eventually will go back through.
On the Front Range, he said, prices are more stable and there's less speculation in the market.
"It gets a lot more difficult with the peaks and the valleys," Smith said about planning for development in a resort market like Steamboat. "The second-home market is the first to get hit by a downturn."
Smith said the standard vesting period for Steamboat is typical of what he's seen in other markets in Colorado.
"From our standpoint, representing the developer, I think it'd be much better to have longer approval periods," he said.
During a Planning Commission meeting Thursday night, Tom Fox, who's part of a group looking to build a 93-lot subdivision in Steamboat, said the pending suspension of inclusionary zoning saved the proposed Sunlight Subdivision. Coupled with the difficulties of financing a new subdivision, the cost of meeting the community housing plan through fees would have been too much, he said. Now, extended vesting is a priority for the project as Fox seeks to secure enough time to complete the development under the current conditions.
City staff recommended five years with a possible five-year extension, but if the extension was granted, the development would be subject to any new requirements at that time.
"We really can't afford to have the rules change five years from now," Fox said Thursday.
Fox requested 10 years with a five-year extension. State statutes allow for 15 total years, Fox said, but Steamboat's code allows for only 10.
"We are very concerned based on the number of residential lots that have sold," Fox said. "We don't know when this economy will ever heat up. We need to be tied in."
The Planning Commission recommended six years with a possible four-year extension with all 10 years exempt from any future community housing requirements.
If the project was not complete within 10 years, it would have to go back through the planning process.
Smith said the process can be political as boards and commissions change. "It's very subjective," he said. "It's unpredictable."
"We believe vesting is part of projects failing sometimes," Fox said Thursday. "Because the vesting isn’t long enough the project could be DOA. The last thing we need is another project going to go down."
"It's obviously always just a little uncertain as to where the market is going," Gibbs said. "Hopefully, we've got opportunity for a rebound. Vesting just helps provide that cushion."
To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com