Entities agree on $39.75 million purchase price for 99-acre plot
By Jack Reaney SENIOR EDITOR
Contingent upon voter approval in the upcoming May 6 election, the Big Sky Community Housing Trust and Lone Mountain Land Company have agreed on a purchase price for the land necessary for the potential Cold Smoke workforce housing development in Big Sky.
A triad of third-party appraisals—commissioned by LMLC, the housing trust and Resort Tax—valued the 99 acres of Big Sky land at $46.4 million, on average. However, after negotiations, the purchase price fell more than 14% to $39.75 million.
When David O’Connor, executive director of the housing trust, announced the sale price in the April 17 Resort Tax board meeting, the small room of a dozen-plus attendees erupted in applause as the news would potentially save more than $5 million in public Resort Tax funds.
“We’ve been in the throes of negotiating that price… We’re incredibly grateful to both the housing trust negotiating team and Lone Mountain Land, for being diligent in coming to an agreement,” O’Connor told the board. “This was a hard deal to cut, we took things as close to the wire as all parties could, and we are pleased to continue forward to the vote, and hope that we’ll proceed with the project.”
After ballots are mailed Friday, April 18, local voters will decide whether to authorize Resort Tax to fund Cold Smoke. The Resort Tax board committed in January to bond up to $45 million for land acquisition, and another up-to-$15 million for infrastructure, by issuing long-term public debt through what became known as the Cold Smoke Bond.
If voters approve, Resort Tax will bond for $39.75 million, allowing the housing trust to purchase the land.
If voters disapprove, the Cold Smoke project is expected to fail. Lone Mountain Land Company would retain the land and instead develop market rate housing, according to LMLC representatives.
Supporters of the workforce housing project have now enjoyed two recent, compounding wins ahead of the May 6 election.
First, in early April, Gov. Greg Gianforte signed a new law that increases the financial leverage of resort tax communities to fund workforce housing. Senate Bill 172 added workforce housing to the definition of “infrastructure” that can be funded using collections of the additional “1% for infrastructure” tax—separate from the regular 3% pool which funds most of Big Sky’s nonprofit grants and government services.
Second, the Cold Smoke project took on a lower-than-anticipated purchase price.
O’Connor explained that the reduced price represents both the value that the public has already invested in Big Sky’s new Water Resource Recovery Facility, as well as LMLC’s “continuous, ongoing commitment” to support its community partners and housing needs.
When Resort Tax committed in 2020 to fund $50 million for a new Water Resource Recovery Facility, the project included a housing clause. With the expanded treatment capacity, 600 single-family equivalents of water and sewer were earmarked for development of workforce housing. With the SFEs already accounted for, the cost of the land became increasingly negotiable.
Matt Kidd, LMLC president, offered a statement in a joint press release with the housing trust.
“This initiative reflects LMLC’S long-standing commitment to supporting community housing in Big Sky,” Kidd stated. “While these projects present challenges and the financial investments may seem daunting, we are proud to play a role in making this project a reality. Our focus is on benefiting the community, and our community needs this project for long-term stability.”
The release also thanked the Big Sky County Water and Sewer District for its partnership in preserving SFEs for workforce housing.
O’Connor added that Cold Smoke presents a rare opportunity to secure shovel-ready land in an “ideal” location.
“With the community’s support, we have the chance to take a bold step toward ensuring Big Sky’s local workforce can afford to live where they work,” O’Connor stated in the release.
Read more about Cold Smoke in a recent Q&A with Explore Big Sky.
