Glenwood Springs City Council voted 5-2 on Sept. 4 to allocate $730,640 from the 2C Workforce Housing Fund to cover city fees for the 80-unit Canyon Vista affordable housing project, while delaying a separate $785,000 request tied to the same development.

Canyon Vista was approved in April with a major site architectural plan and a 1041 land-use review. A 1041 land-use review refers to a permit for development in areas and activities of state interest, required under Colorado law for certain projects located near state highways, water systems or other sensitive areas. Because Canyon Vista is adjacent to Highway 6, it triggered this additional layer of review to ensure the project meets state and regional planning criteria.

The developer’s request came in two parts: $730,640 for the city to use 2C funds to backfill impact and related fees (not waive them) and pay the respective departments, and a $785,000 grant from the 2C fund. The total ask was $1,515,640. Council approved only the $730,640 fee backfill and deferred the $785,000 grant.

Plans call for two residential buildings with studios through three-bedrooms, on-site amenities including a playground, dog run and fitness room, parking that exceeds code, extensive bike parking, a relocated RFTA stop and sidewalk connections to Donegan Road. The project carries a long-term affordability covenant.

“These units are geared toward folks who make below 80% of the area median income,” city Housing Development Manager Kevin Reyes told council.

Reyes said the project’s income tiers span roughly 20% to 80% of area median income, using low-income housing tax credits. He cited example rents as low as about $550 a month on the lowest tier and closer to $1,300 on the upper tier, depending on size.

The developer reported an unanticipated funding gap of about $3 million after expected federal sustainability dollars changed this year. Staff recommended paying the city fee portion now and asking the developer to pursue outside dollars before the city considers the additional $785,000 in funding.

“This is extremely difficult,” Councilor Sumner Schachter said during deliberations.

Finance Director Yvette Gustad presented a 2C forecast that assumes a 10% decline in accommodations tax later this year and 15% in 2026. Under those assumptions, projected ending balances are about $905,000 for 2025 and $1.1 million for 2026 after existing commitments.

Earlier city support was structured as a forgivable loan that is reduced each year if at least 20 of the 80 apartments are occupied by people who work in Glenwood Springs, tracked through year-end accounting to comply with state tax-credit rules. Staff said similar workforce provisions could be written into any future grant agreement if additional 2C dollars are awarded.

Cohen-Esrey Project Manager Kyle Ervin told council the team is still closing the gap with other sources and that timing matters. “If the full request were funded, the chances of closing this fall would be around 80 to 85%,” he said.

The $730,640 will be transferred from the 2C fund to the appropriate city funds when building permits are issued. If permits are not issued, the money remains in 2C. Council invited Ervin and Cohen-Esrey representatives to return with updates on other sources, including state housing dollars, potential utility-district participation and Federal Home Loan Bank funds.