Basalt builders have approvals, but no demand for housing
Glenwood Springs, CO Colorado
Once the economy perks up and the demand for housing returns, Basalt developers will be in a position to deliver.
The problem is no one knows when that will happen. The national economy keeps stumbling along and the local real estate market has stabilized, at best, after transactions and dollar volume nose-dived over the last 18 months.
Meanwhile, developers are sitting on approvals for between 440 and 500 residences that are approved but unbuilt, a report prepared by the town planning department shows. The town government in recent years has also approved a 54-unit lodge, 20,000 square feet of warehouse space, and 313,000 square feet of commercial space.
General contractor and developer Briston Peterson is a partner in a firm that acquired approvals in January for 110 residences in Basalt’s South Side neighborhood. He said in a recent interview that he doesn’t envision breaking ground on the Stott’s Mill project in the foreseeable future, possibly for years.
“There’s nothing that gives me confidence that the market has changed locally,” Peterson said.
The partners have the funds to start construction. The problem is lending is so tight that prospective buyers probably couldn’t get financing to buy the units, he said. It doesn’t make sense to build housing if there is no demand.
“We don’t need to put infrastructure in the ground and just look at it,” Peterson said. “Until it turns around, I won’t put a shovel in the ground.”
The Stott’s Mill partners anticipated the weak demand and convinced the Town Council to grant development approvals for five years for their project. The standard approval is for three years.
Peterson said he is confident the Roaring Fork Valley’s real-estate market will bounce back from the downturn because the area remains such a desirable place to live. It will just take time.
“We’re a group that has patience and a long-term vision,” he said.
The lion’s share of the unbuilt residences and commercial space are at the Willits Town Center project in Basalt. There are approvals for between 119 and 177 residences, depending on size of units and other flexibility options that will ultimately determine the number of units. The commercial core of the project – where a Whole Foods Market is proposed – also has 281,000 square feet of commercial space approved.
However, the status of the project is in limbo because of the recession.
Bank of America foreclosed on Willits Town Center in April, claiming that developer Joseph Freed and Associates defaulted on loans with about $36 million remaining on the principal. Control of the project was turned over to a court-appointed receiver while the lender and developer seek an agreement. A foreclosure sale is scheduled on Aug. 25.
In addition to the approved but unbuilt projects throughout town, there are applications in the review process for another 182 residences and 221,000 square feet of commercial space, according to the town planning department.
The Town Council nearly denied an application April 27 for 80 residences at the Jadwin project, west of the Basalt post office. The project was given a stay of execution so the developers could consider withdrawing the application.
Councilwoman Jacque Whitsitt, who opposed the Jadwin plan, said she doesn’t feel any pressure to approve projects as an economic stimulus. She cited the report that shows hundreds of units are approved and ready for construction.
The poor condition of the economy – and its effects on the housing market – are responsible for the lack of construction rather than a lack of approvals, Whitsitt said.
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