Town of Vail releases draft development agreement for deed-restricted homes

The Town of Vail on Thursday issued the following press release on a draft development agreement between the town and Triumph Development for construction of deed-restricted homes on the town-owned Middle Creek lot:

A draft development agreement between the Town of Vail and Triumph Development for construction of deed-restricted homes on the town-owned Lot 3, Middle Creek site has been released for public comment in advance of Town Council’s formal consideration at its March 2 evening meeting.

The draft is available for review at vailgov.com/HousingActionsandInitiatives with public comment accepted in advance of the meeting by email at publicinput.vailtowncouncil@vailgov.com or registering to attend the virtual March 2 meeting at vailgov.com/town-council.

Preparation of the draft development agreement follows Town Council approval of a pre-development agreement between the two parties at the Feb. 2 Town Council meeting which has since been executed with initial steps of the entitlement process already underway. According to the executed agreement, the town and Triumph Development are co-applicants in the preparation and presentation of the development review applications with the town paying the cost of the investment in the entitlement process. This has included hiring Triumph Development for project management services in an amount not to exceed $300,000 and to fund the town’s investment in the entitlement process in an amount not to exceed $390,000.

During an update to the community on Feb. 16, Town Manager Scott Robson said the town was making good progress on the draft agreement and had been able to incorporate some, but not all, of the suggestions offered earlier by members of the public. Most importantly, he noted the agreement is no longer a component of the Alternate Housing Sites Initiative to protect and preserve the Booth Heights parcel in East Vail from future development, as originally intended, since Vail Resorts has opted to step back from the discussions while continuing to maintain development rights on the property. Robson says the town has made it clear to Vail Resorts that the town is eager to partner on a variety of community initiatives in the future.

To address the changing circumstances, Robson says the draft development agreement requires Triumph Development to waive any and all rights it may have to developing the Booth Heights property. As previously stated, the town cannot legally prevent or otherwise prohibit the Booth Heights development within the framework of its draft agreement with Triumph.

Given the turn of events, Robson says the primary focus of the development agreement has shifted to make progress on the town’s housing goal by providing for the construction of quality, deed-restricted homes for as many as 175 residents on the Lot 3, Middle Creek site and initiate a process to redevelop Timber Ridge Village Apartments to create a minimum of 200 deed-restricted homes in town. The town’s adopted housing goal is to acquire a total of 1,700 deed restrictions by the year 2027. Robson says the Middle Creek site is arguably the premier undeveloped housing site in the community, owned by the town, on a lot appropriately zoned for housing, adjacent to existing multi-family homes and within a 5- to 10-minute walk of Vail Village, Vail Health, the new Children’s Garden of Learning facility and the center of employment in Vail.

Robson says he’s especially pleased by the partnership the town has forged with the CGL board of directors in working to relocate the center to a temporary location in Lionshead that will meet their needs for the next 3 to 5 years. Agreements are in place for the town to fund construction of the temporary early childhood education facility beginning this spring, with CGL vacating their current facility on the Lot 3, Middle Creek site no later than Sept. 15, 2021. The town has also pledged to work with CGL to help secure a permanent facility that can be a fixture of the Vail community for decades to come.

As envisioned, the Middle Creek development would be designed as a 100% deed-restricted residential development to include a minimum of 144 beds. Construction of the new homes would begin in September 2021 and would be completed by November 2022. The town would retain the option to master lease and sublease units, if interested. The town and Triumph Development would enter into a ground lease or a lease/purchase option for the property in which the Vail Local Housing Authority would be granted an ownership interest in the entity formed by Triumph to construct and manage the development. Any lease option executed by the town would include an assignability clause allowing the town to freely assign its rights to the lease without the consent of Triumph Development. Triumph Development would be obligated to pay all related costs of the construction on the site. Upon expiration of the ground lease, Triumph’s ownership interest in the buildings and improvements would transfer to the town.

The future redeveloped Timber Ridge property would continue to be a 100% deed-restricted residential development and would include a minimum of 200 units of varying size. Triumph would be responsible for all costs incurred to receive entitlements and develop the site.  Triumph would enter into a ground lease for the property with the town and construction would begin only after completion of the Middle Creek Project; however, no sooner than April 2023. The redevelopment of Timber Ridge is to be completed by November 2025.

Key terms of the draft development agreement between the Town of Vail and Triumph Development include:

• Partnering with Triumph Development, as a co-applicant, on the design development and entitlement process for the development of Lot 3, Middle Creek for 100% deed-restricted homes.
• Hiring Triumph Development for project management services in an amount not to exceed $300,000 and to fund the town’s investment in the design development and entitlement process in an amount not to exceed $390,000.
• In exchange for the $690,000 investment in the entitlement process, the town will receive a deed restriction value of approximately $4.42 million.
• Enter into a separate ground lease agreement for Lot 3, Middle Creek.
• Authorizing Triumph Development to proceed through the development review process for redevelopment of Timber Ridge Village Apartments upon the completion of Lot 3, Middle Creek.
• Ensuring the development of at least 144 beds on Lot 3, Middle Creek with considerations made to ensure energy conservation and the use of renewable energy sources.
• Retaining town-ownership of the two sites and executing ground leases resulting in transfer of the buildings to the town at the end of the lease terms.
• Ensuring the ground leases are freely assignable to a third party at the town’s sole discretion upon completion of the buildings and improvements.
• A waiver by Triumph Development foregoing their participation in any development on the Booth Heights Parcel.
• A change to the indemnity provisions further protecting the town from legal actions a third party may pursue based upon the terms of the agreement.

To register to provide public comment on the draft agreement at the March 2 virtual meeting, visit vailgov.com/town-council.