By Jack Reaney SENIOR EDITOR
Through a complicated reshuffling of voter-approved funds, the Big Sky Resort Area District agreed on Nov. 13 to fund an additional $2.75 million to fund the Cold Smoke workforce housing neighborhood, covering the unexpected cost of a water tank that will serve Cold Smoke and enhance overall system reliability for the Big Sky County Water and Sewer District.
In total, infrastructure including roads, electricity and water and sewer will cost roughly $10 million more than expected, but Lone Mountain Land Company—current landowner and early-stage developer of Cold Smoke—will absorb most additional costs aside from the water tank expense, as agreed upon during negotiations in early 2025.
The Big Sky Community Housing Trust will soon acquire Cold Smoke’s 99 acres of land from LMLC for $39.75 million.
David O’Connor, housing trust executive director, explained the rising infrastructure costs and why the water tank fell outside LMLC’s responsibility and justified Resort Tax support.
“This has been, I think, the most complicated endeavor this community has ever taken on,” O’Connor said during the Nov. 13 BSRAD board meeting. LMLC’s responsibility to fund infrastructure did not include the costs of annexing Cold Smoke into the Big Sky County Water and Sewer District, and in that annexation process, O’Connor learned that the district would require additional water infrastructure.
The 300,000-gallon water tank will provide storage serving Cold Smoke while preventing burden on the entire BSCWSD, also offering a resource for fire protection in the new neighborhood. Water and sewer district GM Johnny O’Connor said the water tank will be maintained by the water and sewer district, once completed.
“We certainly recognize the value of that infrastructure to the community. However, it was a cost that we just were not considering,” David O’Connor told the board.
In last year’s planning for the Cold Smoke Bond, the Resort Tax board made a dual commitment: up to $45 million for land acquisition, and up to $15 million for infrastructure.
Hearing the request for additional water tank funding, the board voted to amend its original resolution, from “up to $15 million” to the concrete amount of $17.75 million—the difference will be paid in cash from the same 1% collections, a fund restricted to infrastructure such as workforce housing. The approval was based on the $5 million surplus in voter-approved funds left over from land acquisition.
“There were still some unknowns at that time,” board member John Zirkle said on Nov. 13. “… We knew that from our standpoint, Resort Tax’s capacity was landing at that $60 million total… That was something we could comfortably bond to handle this project.”
All-in, BSRAD will bond for slightly less than $58 million, comfortably below its original resolution for up to $60 million in total.
“Now the rubber has hit the road… we understand the costs of the project moving forward to get to vertical,” Zirkle said.
Zirkle and Daniel Bierschwale, BSRAD executive director, noted that BSRAD saved roughly $1 million by delaying the Cold Smoke bonding process until 2026 to allow BSRAD to fund the $6.8 million Community Park Bond in 2025. Additionally, BSRAD has now fulfilled its multi-year, $27 million commitment to the local Water Resource Recovery Facility.
“As we work through challenging moments—that I’m sure this is not the last one in this project—I’m really happy that everybody has come to the table,” Zirkle said.
Johnny O’Connor noted that in today’s infrastructure world, project costs change by the day.
“Infrastructure, for us, is quite expensive,” he said. “… It is not uncommon for us to constantly change the numbers. So, you get good numbers today, run with it because it will change tomorrow.”
Zirkle agreed, applauding the various groups working to keep the project on schedule. Project leaders hope to begin installing roads by early January. “We do not want to delay this another minute.”
Correction: This story was updated to better reflect the water tank’s impact on the overall BSCWSD.
