Affordable housing: ‘Big Sky’s No. 1 issue’

Organizations look to new hires as future of 18-condo demonstration project remains uncertain

By Amanda Eggert EBS Staff Writer

BIG SKY – Construction is booming in the Yellowstone Club’s American Spirit subdivision – a residential development that has been called “the most successful residential resort subdivision in the country, if not the world,” by Sam Byrne, co-owner of the YC’s majority shareholder CrossHarbor Capital Partners.

However, the workforce building its multi-million dollar properties – along with the rest of the area’s workforce – continues to struggle to find affordable housing in Big Sky.

Like other resort communities in the West, Big Sky has been grappling with housing issues for decades. More than $100,000, including $60,000 of resort tax board funds, has been spent on housing studies in the last three years, and recent data indicates that Big Sky is short as many as 1,200 units to house area workers.

Stakes are particularly high right now. Concerns range from how a lack of affordable housing weakens Big Sky’s population of rooted year-round residents, to how it limits the area’s economic growth.

“My personal belief is it’s [Big Sky’s] number one issue,” said Kevin Germain, member of the Resort Tax Area District board and vice president of planning and development for Lone Mountain Land Company, CrossHarbor’s real estate development arm. “It’s mind-boggling that 83 percent of our workforce leaves at the end of the day.”

Most of Big Sky’s workforce commutes to this unincorporated community from Bozeman and other areas in the county where housing is more affordable and available.

In lieu of a local nonprofit or government agency committed exclusively to affordable housing, the Big Sky Chamber of Commerce has worked on the issue since 2011 at the behest of local businesses frustrated that a lack of housing has compromised their ability to recruit and retain a deep talent pool.

“I do believe that the more our employers suffer, and the harder it is for us to find good teachers and firefighters and employees all over big sky, [the more motivated people will be to bring] much better ideas … to the table, ” said Kitty Clemens, the chamber’s executive director.

The chamber was instrumental in getting the ball rolling and most recently, it contributed $12,000 of its own budget to help fund a housing solutions planning effort called a Preliminary Architectural Report that was presented to community members last October. But as an organization ineligible to apply for federal housing funds, there’s only so much the chamber can do.

Clemens said the chamber, a nonprofit organization, is committed to the issue but limited in terms of what it can accomplish.

In addition to the chamber’s $12,000 contribution, a $30,000 Community Development Block Grant secured by the Bozeman-based Human Resources Development Council paid for the PAR.

To prepare the PAR, Bozeman-based architectural firm Comma Q subcontracted two engineering companies to evaluate eight sites in and around Big Sky for their affordable housing suitability, and outline development plans to tackle the issue.

The leading option that emerged from the PAR was an 18-condo development that would potentially be located on a 4.14-acre parcel known as Sweetgrass Hills behind the tennis courts in Meadow Village. But the development’s future is far from certain. Several puzzle pieces, the largest being the land itself, are still in flux.

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David C. Fowler, an architect who has been working on Big Sky’s affordable housing issue since 2013, said he believes there’s strong momentum in the community to make headway on the issue. “I think it’s getting ready to really happen. There are a lot of people here who are truly focused on it right now.”

In 2013, Fowler worked on designs for a 50-house development centrally located in Big Sky. Despite strong support for the project – several community members submitted letters to this newspaper in favor of the development – it never left the ground.

Affordable housing isn’t just a matter of professional interest for Fowler – it’s a personal concern as well. His office in a second-story unit above Christie’s PureWest Real Estate in Town Center doubles as his home. Both architects working for him commute from Bozeman.

Fowler said the single most important thing that could make affordable housing a reality in Big Sky is the involvement of a group that could accept funds to purchase land for affordable housing.

“What it boils down to is land cost,” Fowler said. “At the end of the day, what Big Sky really needs is an organization or a nonprofit organization that can accept donations to offset land cost … It’s the only way to fix it.”

Clemens echoes Fowler’s assessment. She said the creation of a designated funding stream for housing was the top recommendation to come out of the 55-page affordable housing study prepared by Denver, Colo.-based Economic & Planning Systems in 2014.

“[If you have that] you can go to foundations, charitable trusts, real estate investment trusts, developers and bond dealers [and make something happen] because you have something that is always going to be there,” Clemens said.

Fowler also said he believes it works to Big Sky’s advantage that so much of the area’s development falls under the umbrella of CrossHarbor Capital Partner‘s ownership, the largest property owner and developer in Big Sky.

“Rather than having eight different people trying to do something, you’ve got one major developer that can help push the ball more efficiently,” Fowler said. “I think that’s probably going to help.”

Approximately two months ago, LMLC, which oversees real estate developments in Moonlight Basin, Spanish Peaks Mountain Club and other parts of Big Sky, posted a hiring notice on its website for a director of housing solutions.

The new hire would be expected to “ … lead the planning and development of workforce housing to support LMLC’s near-term needs, and work with the broader community in support of Big Sky-wide initiatives,” according to the position description, and LMLC plans to interview candidates over the next few weeks.

Although the person LMLC is looking to hire would focus on the company’s housing needs, “the bottom line is any pillow we can add to the community for a construction worker or a year-round employee decreases the pressure on the overall community,” said LMLC’s Germain. “Our interests are aligned with the community.”

LMLC is in the process of developing two properties targeted for employees of Yellowstone Club, Moonlight and Spanish Peaks, Germain said. Both developments will be multi-family unit apartment complexes located in Town Center.

One of the buildings will house 16 units and is slated for completion in approximately one year. The other, a 32-unit development, is still being designed, and LMLC is aiming to break ground on it at the end of the summer, according to Germain. Both will likely be rental properties.

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On the nonprofit front, HRDC is ramping up its efforts on affordable housing in Big Sky, and emerging as the most likely organization to bring the PAR plans to fruition.

Usually, a local housing authority or a community land trust would take the lead on this issue, but those organizations are much more common in incorporated communities, according to Clemens, who said she’s in support of HRDC taking on the developer role for affordable housing projects.

“We don’t believe we need to reinvent the wheel at this point with our own housing authority,” Clemens said.

Tracy Menuez, a special projects sponsor with HRDC, said the organization has a long track record of acting as a property developer. “We certainly have the organizational capacity. We have two land trusts already in our portfolio,” she said. “The community land-trust model is really what we’d like to see in Big Sky.”

Two weeks ago, HRDC brought onboard Brian Guyer, a community development associate who will focus on affordable housing in Big Sky and West Yellowstone. Guyer comes to Montana from Park City, Utah, where he worked with community land trusts. He describes himself in his new role with HRDC as “somebody who’s going to wake up and think about [affordable housing] every morning.”

He’s joining the cause at a tricky time. There are plenty of people in Big Sky committed to the housing issue, but the likelihood of a building being erected in the next couple years that will meet the affordability standard – meaning unit occupants spend no more than 30 percent of their income on housing – remains to be seen.

The Sweetgrass Hills property, which looked so promising and well suited to affordable housing development based on the PAR recommendation, is not currently listed for sale according to the property’s owner Chad Rothacher. “HRDC has not brought forward an offer to purchase, and we are considering all offers from all parties that have come in the door,” he said.

Menuez said HRDC and Rothacher are still in talks. “It’s still a parcel we’re considering, but we are not shutting down any options,” she said.

Time could be running out to make something happen in the 2016 grant cycle. The application for what Clemens calls the “brick and mortar” Community Development Block Grant is due in April. The largest award is $450,000, but Clemens said it’s unlikely that HRDC would receive the full grant without first having a property under contract.

There are still options available to HRDC, according to Menuez, even if a piece of property has not been secured. “There are a lot of places where [a CDBG] could be plugged in and used,” she said.

Even if the condo development moves forward, detractors still say 18 condos don’t count for much when considered through the lens of Big Sky’s massive housing shortage. Depending on who you ask, Big Sky is short 900 to 1,200 housing units.

Local developer John Romney said he applauds the efforts to date but is concerned they aren’t scalable for a large number of units. “We’ve got this flood coming up and we’re throwing up some sandbags here and there, but what we need to do is build some levees.”

Menuez’ response is that HRDC’s effort is better late than never. “It would have been amazing had we fixed this 30 years ago, but we didn’t,” she said. “The best time to do it is now.”

“It’s not insignificant to the 18 families who move in,” Guyer said, adding that it’s important to move plans from the hypothetical to the material. “[But] until you have units on the ground, people kind of question viability.”

Guyer acknowledges that Big Sky’s lack of a city government presents challenges. “That’s a unique and big hurdle. It’s something that will have to be navigated,” Guyer said. “A lot of tools are not available to Big Sky … but that doesn’t mean the toolbox is empty.”

Romney said affordable housing isn’t just an immediate concern for Big Sky. He says it will shape Big Sky’s future as well.

“Initially, we’re not going to have enough people to build the community, but then long term, you need people here to run the community.”

EBS will continue its coverage of Big Sky’s affordable housing issue. Readers with comments or stories pertaining to affordable housing are encouraged to submit letters to media@theoutlawpartners.com.