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HomeMy WebLinkAboutReferralMemo.APCHA.GorsuchHaus.2020.0803 210 E. Hyman, Suite 202 • Aspen, CO 81611 970-920-5050 • www.apcha.org Gorsuch Haus Employee Housing Mitigation Referral Page 1 LAND USE REFERRAL MEMORANDUM TO: Garett Larimer, Community Development Department Planner FROM: Cindy Christensen, Deputy Director DATE: August 3, 2020 RE: Gorsuch Haus Employee Housing Mitigation Referral (Detailed Review Application) ISSUE Norway Island, LLC, seeks approval for the Detailed Review use application in response to the proposed relocation of Lift 1A. The original Gorsuch Haus Planned Development (PD) was reviewed and approved in 2016 and included a referral by the APCHA Board of Directors. BACKGROUND The Detailed Review for the Gorsuch Haus application proposes a 61,975 square foot mixed-use lodge with 40,014 lodge floor area, 81 units or keys; 7,723 square feet of net leasable commercial space which includes a restaurant, small retail, and après ski bar; four (4) free market multi-family units totaling 8,000 net livable square feet; and one affordable housing unit at 804 net livable square feet. To make this happen, the Applicant proposed rezoning the properties to Ski Zone District. Pursuant to Land Use Code Section 26.470.100. Table 5, Affordable Housing Calculations, shows that the total employee mitigation required is 24.68 FTE’s. The project review approved a reduction of FTE’s for the Lodge Project. This reduction requires an employee audit two years after issuance of a Certificate of Occupancy to evaluate actual employee generation. This condition is addressed in Section 3.2a of the Agreement (Appendix C, Exhibit 4) of the application. The Applicant proposes mitigating the employee generation through a combination of efforts including construction of one on-site one-bedroom affordable housing unit that houses 1.75 FTE, leaving a mitigation balance of 22.93 FTEs. The Affordable Housing Conditions are addressed in Section 3.2c of the Agreement (Appendix C, Exhibit 4) of the application. APCHA Board provided a previous recommendation, outlined below (italics): PREVIOUS RECOMMENDATION FROM JUNE 1, 2016: The APCHA Board reviewed the application at their regular meeting held June 1, 2016, and recommend approval with the following conditions: Gorsuch Haus Employee Housing Mitigation Referral Page 2 1. Increase the vesting rights period to five years with a condition that the mitigation requirement shall be readdressed to the Code and Guidelines in place at the time of building permit approval. 2. The mitigation requirement shall be verified at the time of building permit by the Community Development Department. 3. The balance of offsite affordable housing mitigation shall be reviewed and approved by the APCHA Board prior to building permit approval and shall include at least a mix of off-site units along with the use of the Housing Credits. The balance of the FTE requirement should not be solely satisfied by the use of Housing Credits. 4. Since the applicant is requesting that a majority of their affordable housing mitigation units be located off site, a mix of category units, 1-4, are preferred versus all Category 4. 5. The applicant shall have the right to maintain the units as rentals under the following conditions: A. The deed restriction shall require that all tenants are approved PRIOR to tenancy through APCHA and must re-qualify every two years. If the tenants work specifically for the Lodge, the income and assets shall be waived; however, the rental rate charged cannot exceed Category 1-4 as stated in the Guidelines. B. Owner and APCHA stipulate and agree that, in accordance with CRS 38-12-301(1)(a) and (b), this Deed Restriction constitutes a voluntary agreement and deed restriction to limit rent on the property subject hereto and to otherwise provide affordable housing stock. Owner waives any right it may have to claim that the Deed Restriction violates CRS 38-12-301. C. The rental deed restriction will be recorded with the conditions required in APCHA’s Employee Dwelling Unit Deed Restriction. 6. If the owner requests the units to become ownership units, or any of the rental units are found to be out of compliance for one year, the following shall apply: A. All of the units shall be ownership units and sold through the APCHA lottery system. B. The units will be classified as Category 3 or 4. C. The condominium documents shall be reviewed and approved by APCHA. The APCHA Board reviewed the application at their regular meeting held October 3, 2018 and recommend the following to satisfy the employee housing mitigation requirements: Gorsuch Haus Employee Housing Mitigation Referral Page 3 Under Section 3 of the APCHA Affordable Housing Development Policy, employee housing mitigation is prioritized in the following order: a. Onsite deed restricted housing constructed or converted next to or attached to the proposed development. b. Offsite deed restricted housing constructed or converted at a separate location within the Aspen core subject to approval by APCHA. A single offsite deed restricted unit in an otherwise free-market housing complex shall not be approved. c. Use of Certificates of Affordable Housing Credits (Housing Credits). d. APCHA approved buy-down units. e. Payment-in-Lieu (Cash-in-Lieu) to the City of Aspen or payment of an Impact Fee to Pitkin County; or land-in-lieu by conveyance of vacant property to the City or to APCHA, permitted on a case by case basis. The APCHA Board does not support the use of payment-in-lieu for employee housing mitigation. The APCHA Board recommended the following methods to satisfy the required employee housing mitigation: a. Onsite deed restricted housing constructed or converted next to or attached to the proposed development. b. Offsite deed restricted housing constructed or converted at a separate location within the Aspen core subject to approval by APCHA. A single offsite deed restricted unit in an otherwise free-market housing complex shall not be approved. c. Use of Certificates of Affordable Housing Credits (Housing Credits). d. APCHA approved buy-down units. The APCHA Board also recommended that the on-site deed-restricted unit be used as a rental unit for an employee of the lodge. DISCUSSION Proposed Employee Housing Mitigation – Amount and Type As stated above, the original approval included employee housing mitigation using a combination of onsite units, Housing Credits, and offsite units; while no option for cash-in-lieu was requested. The amended Gorsuch Haus employee mitigation proposal for the 24.68 FTEs includes: 1. One, one-bedroom onsite affordable housing unit equaling 1.75 FTEs; 2. Using a combination of buy-downs of existing/new units and/or purchase of Housing Credits to offset the remaining 22.93 FTEs; and 3. Allowing the applicant to maintain ownership of any offsite units so that occupancy is tied to Gorsuch Haus employees. Gorsuch Haus Employee Housing Mitigation Referral Page 4 Cash-in-lieu to offset the mitigation has not been proposed. Community Development Response and APCHA Employee Housing Guidelines Community Development supports the one onsite affordable housing unit and the use of Housing Credits and/or buydown of existing/new offsite units in meeting the balance of the housing mitigation requirements. There are no criteria in the APCHA Regulations for the Board to evaluate when weighing a request to deviate or depart from the priority list of employee housing mitigation. In staff’s opinion, the burden is on an applicant to justify any deviation or departure. The Board is not obligated to recommend anything other than established standards. However, given the scope and location of this project it could consider exceptions at the applicant’s request and justification. CONCLUSION APCHA Staff has reviewed the Gorsuch Haus Subdivision/PD Development Agreement. Section 3.2.a and c cover the concerns from the APCHA Board previously stated in earlier recommendations, and Staff; however, 3.2.a states that the one-bedroom unit is credited with 1.95 FTEs. The APCHA Regulations allows 1.75 FTE’s to be credited with a one-bedroom unit. APCHA also supports the requirement of an employee audit to be conducted two years after Certificate of Occupancy. At such time if the FTE count is greater than 24.68 FTE’s, additional mitigation will be required.