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January 28, 2008 — The fly in the ointment of Vail's recent and remarkable $2-billion-plus redevelopment spree is what some government and business leaders are dubbing a "critical" lack of workers to staff all the shiny new stores, restaurants and hotels flying up around town.
That "crisis mode," as council member Farrow Hitt dubbed it on Tuesday night, Jan. 22, led to a 5-1 vote (Andy Daly was absent) to move forward with a Texas developer's plan to tear down and rebuild two-thirds of the town-owned Timber Ridge affordable housing complex on North Frontage Road in Vail.
"We really haven't done much to address (the housing shortage) at all," Hitt said. "It is crisis mode. We can keep studying (the shortage), but as we study it, we have businesses that cut hours. We have businesses that can't even stay open for seven days a week because they can't find employees."
Anecdotal evidence of the growing labor shortage abounds - from the owners of one of Vail's most critically acclaimed restaurants, Sweet Basil, cutting lunch service two days a week (Mondays and Tuesdays) because of a lack of cooks, to construction projects running into endless delays, to page after page of help wanted ads in the local newspapers.
By David O. Williams
Newly elected council member Margaret Rogers, the lone dissenting vote on Timber Ridge, said the problem is so acute that the project should be fully master planned and more intensely studied in order to get the most bang for the town's buck on a parcel that represents Vail's last best chance to maximize its employee housing stock.
"We have one opportunity to get this thing right," said Rogers, who also urged a detailed appraisal of the parcel's value. "We don't know how much housing we're going to need coming down the road, although we do know that the need right now is critical. It's irresponsible for us to proceed with a project without knowing what our needs are or even what the property is worth."
Open Hospitality/Hillwood Capital of Dallas was given 45 days to hammer out an agreement with town staff on a project that will be comprised of 316 for-rent, four-bedroom units on six of Timber Ridge's 10.3 acres. Town manager Stan Zemler said an appraisal would be done during that period.
Open/Hillwood would pay the town $13.2 million for the six acres, if it's able to hash out an agreement with the town - one that would include town equity in the project so Vail can guarantee rent controls and deed restrictions in perpetuity.
Overall, 1,264 brand-new affordable beds would be added to the town's inventory at a time when more and more businesses are finding it difficult to operate due to a labor shortage exacerbated by a severe lack of employee beds. Vail is more than 70-percent occupied by out-of-town second homeowners, who have increasingly been buying and remodeling older, more rundown units formerly occupied by workers.
Timber Ridge currently represents 600 employee beds, but the complex was built in 1981 and is in dire need of major repairs. "It really is about to fall down around people's ears," council member Kim Newbury noted. "It is not in good shape."
Open/Hillwood's Mark Masinter said the project has morphed from a mix of 312 for-rent units and 157 for-sale units on the entire 10.3 acres to its current incarnation because of the overwhelming sentiment that for-rent employee units are a much more critical need than for-sale affordable housing for locals.
Also he said Vail Resorts, which currently leases many of the units for its workers, asked that a portion of the property remain standing during construction, which could begin as early as this spring. The remaining four-plus acres also would give the town future flexibility in developing even more dense housing down the line.
Kaye Ferry of the Vail Chamber and Business Association told the council it should "never get rid of town-owned property," although Newbury countered every developer with interest in the project said they needed to own the land to make the deal work. But Ferry also insisted more density could be achieved.
"We could have had at least three times the units we had at Middle Creek (a 142-unit employee housing project east of Timber Ridge on North Frontage Road)," Ferry said. "That site (Timber Ridge) has to be maximized, it has to have the maximum number of units we can stand. We didn't understand the needs, and we didn't stand up to the community (on Middle Creek)."
Neighbors of Middle Creek, particularly in the nearby Spraddle Creek area, fought bitterly to keep the size and scope of that project down, but Masinter said his group studied a seven-story steel-framed high-rise on the Timber Ridge site and found it would add $30 million to the cost of the project and thereby push up rents to unacceptable levels.
With the high-rise option, the four-bedroom units would rent for $3,000 a month (or $750 per person), but with the four-story, wood-framed option the council voted to pursue, rents would be $2,280 per unit (or $570 per person).
Newbury also argued a seven-story high-rise wouldn't fit with Vail's character and would be an eyesore from the interstate. Mayor Dick Cleveland said the time to debate the matter had come and gone and that immediate action was necessary.
"We have a bird in hand here, and we have a proposal - and it's just that. The devil's in the details, and that's what going to happen in the next 45 days," Cleveland said. "We get accused, and rightly so, of studying and dilly-dallying around and not building a stick of housing, and if we were to kill this tonight, we would have done that again."
Masinter said his project will satisfy a town regulatory requirement of 217 pillows he needs for his proposed redevelopment of the Lionshead Parking Structure, which would put all the parking underground and add a St. Regis and W. Hotel, as well as condos, shops and restaurants.
Vail Resorts had also previously submitted a proposal to rebuild Timber Ridge in an effort to satisfy its housing requirements of 120 pillows for the recently opened Arrabelle at Vail Square, but that plan was rejected by the town and the company is now focusing on an employee-housing project on its North Day Lot property on South Frontage Road in Lionshead.
Masinter, a longtime Vail skier with the financial backing of part-time Vail resident Ross Perot Jr., of Hillwood Capital, said the Timber Ridge project will be a high-quality development, with plenty of parking, storage space, work-out facilities and common areas.
"This is not going to be a dorm," Masinter said. "This will be something the town will be very proud of. Everything we do here is going to be a legacy for our company, and the last thing we want to do is build something we can't be proud of."
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