By Gabrielle Gasser EBS STAFF
BIG SKY – In a unanimous vote, the Big Sky Resort Area District board granted the Big Sky Community Housing Trust $1.4 million in funds for the Workforce Housing Project, undertaken in partnership with Lone Mountain Land Company, after five months of being held in “pending” status.
The housing trust originally applied for the funds during BSRAD’s FY21 fall allocations cycle and the board classified the request as pending, the first time the board has ever placed a project in that status, asking for more information before they voted.
The recommendation to fund the project came from a subcommittee created by the BSRAD board to gather further details about the project, which was comprised of partners including Daniel Bierschwale, executive director of BSRAD; Kim Beatty, legal counsel to BSRAD; Steve Johnson, BSRAD board member; Grace Young, BSRAD board member; Bayard Dominick, VP of Planning and Development at LMLC; Justin Bain, principal of CrossHarbor Capital Partners; and Laura Seyfang, executive director of Big Sky Community Housing Trust.
“We’re super excited about it,” said Seyfang.“To really bring affordable workforce housing to fruition takes effort by lots of people working together, especially in this town. The reason it’s so difficult to develop these things is it’s very hard to make them work financially. This contribution from resort tax was essential to making this formula be a success.”
With the allocation of BSRAD funds comes contingencies to ensure that public funds are utilized appropriately. A few of the requirements, according to Bierschwale, include a Fair Market Value property appraisal of the land, additional approval from the Big Sky County Water and Sewer District, and, in the future, reports on rental income.
The entire Workforce Housing Project is estimated to come in at $54.8 million with $9.8 million of that going to the housing trust’s building A, which is the portion of the project supported by BSRAD. The resort area district will provide 22 percent of the $9.8 million and will be supplemented by 19 percent from philanthropy and 59 percent from federal Low-Income Housing Tax Credits.
The other buildings—B, C and D—will be paid for, owned and managed by CrossHarbor.
“[The project] represents a true public-private partnership wherein multiple parties in our community have come together and are contributing to the long-term health of our local housing market,” said Matt Kidd, managing director at CrossHarbor.
In total, the housing trust will request $2.2 million from BSRAD over a three-year period, according to Bierschwale. This year the award was $1.4 million; in 2022, it will request $600,000 and in 2023 it will ask for the final $200,000 needed to finish the project.
All four buildings will yield a total of 100 deed-restricted workforce housing units. The deed restrictions will ensure that rents remain at affordable levels in perpetuity, according to Seyfang. Rental rates will be determined based on the average median income of residents in Gallatin County and units in building A will be more heavily regulated since the funds to build them will largely come from LIHTC grants.
According to Seyfang, no one will ever pay more than 30 percent of their income to rent any of the units.
Each building will contain a variety of units since, Seyfang says, the goal is to target various income levels and renters. Unit styles could include dorm style, one-bedroom, two-bedroom and three-bedroom, she said.
Building A will be owned and managed by the housing trust and developed by LMLC alongside BlueLine Development Inc. a development and consulting company based in Missoula. Building A will contain between 21 and 24 units, the final number to be determined once BSCHT can consult with the Gallatin County Planning Commission.
“The good news,” Seyfang said, “is we can put as many units on the property as are going to physically fit within the easement.”
This news comes after a review of zoning laws concluded that the project will not need to apply for density bonuses. A density bonus, according to the Montana Department of Transportation website, is “an incentive-based tool that permits developers to increase the maximum allowable development on a property in exchange for helping the community achieve public policy goals.”
In addition to the housing trust’s ownership of Building A, LMLC has also committed to reserve a minimum of 20 percent of the units in buildings B, C and D for local businesses outside of CrossHarbor control and allow the housing trust to oversee those units.
The need for workforce housing in Big Sky cannot be overstated. Data gathered in a 2018 Community Housing Action Plan shows that by 2023 there would be a deficiency of 1,144 housing units in Big Sky if no action is taken. When a total of 730 other planned affordable housing projects are taken into account, there is a projected deficiency of only 414 units in Big Sky.
“The needs are great,” Bierschwale said. “We all know that both small and large employers contribute to that overall need. We’re thrilled to see that we’re beginning to actually march toward achieving the overall deficit of workforce housing in the community.”
Now that the housing trust has secured a portion of the funding for the project, next steps include obtaining annexation into the water and sewer district and applying for LIHTC funds.
The water and sewer district is holding a special board meeting, tentatively slated for March 23 to make a decision on annexing the project. The entire development is estimated to require 100 SFEs, which, according to Bierschwale, would come out of the 500 SFEs set aside by an interlocal agreement put in place as part of the 1 percent for infrastructure tax approved by voters in May of 2020.
According to Seyfang, the initial LIHTC application is due the second week of April. A final answer on whether or not the project will receive the requested federal funds is expected in October. Each year, only a handful of competitive LIHTC applications are approved in the state of Montana, according to Seyfang. BlueLine developers are helping the housing trust with its application to the federal program and will continue to be involved in the development of the project, Seyfang said.
Assuming all goes well and the project gains the necessary SFEs and funding, the housing trust’s plan is to break ground in May of 2022 and have the first units occupied in summer of 2023.
“I’m always an eternal optimist,” Seyfang said. “I do believe that when you work hard on a problem, you can almost always solve it. I feel like we’ve got a lot of the right people working together now and figuring out how to pull together to get this issue under control, because it is doable. Not easy, but doable.”