Housing Puzzle
Wednesday, April 15, 2009
By Jake Nichols
Jackson Hole, Wyo.-At the last Town Council meeting, the Jackson Hole Community Housing Trust announced its deal with Greg Prugh Jr. to purchase 16 of his 24 free market units at Daisy Bush, a new East Jackson development.
The wonky economy had given the local developer a case of cold feet and selling off more than half of his East Jackson inventory in the name of affordable housing was looking mighty good.
“The game has changed,” Prugh said. “When have you seen vacant stores on the Town Square? Architect firms going from a staff of 14 to four? Contractors actually calling you back three times before noon?
“Look at projects like Painted Buffalo, Stagestop and Sagebrush. None of them are being built. They can’t get the money right now or the demand isn’t there anymore. What used to be 10 months of inventory in Jackson Hole is now 17 years worth. The less units I have to sell in these funny economic times, the better.”
The Trust told the electeds they would build and manage 16 units while divvying up eight to St. John’s Hospital, with whom they had entered into a 50-50 partnership on a property purchased in March 2008 at Redmond and Hansen. No one on the Council was aware of the hospital’s involvement in the Daisy Bush development. No one knew, either, that the Trust had sold the Redmond-Hansen property just days before.
“You always try to encourage the applicant to not change the proposal from the staff report to the Council hearing,” town planning director Tyler Sinclair said. “It often leads to confusion and that could lead to continuance or tabling.”
The new arrangement added too much complexity to the agenda item at hand: the Trust’s request for a revision to the affordable housing mitigation plan allowing them to trade in the already approved four affordable units spread evenly in Categories 1, 2, and 3, for 16 Category 3 units. The four-fold increase in affordable housing was enticing, but ultimately the council decided there was too much on their plate already and continued the matter to their April 20 meeting.
“It’s too bad that this application has to be so confusing,” council member Melissa Turley said at the meeting. “The question here really is: What is our goal? To house workers in our community.”
City administrator Bob McLaurin agreed. “I look at it in its totality and ask how many units are we going to get and how many WERE we going to get?”
“I applaud anybody thinking outside of the box,” Mayor Mark Barron added. “We were surprised to see the request had doubled from eight units to 16 units and there was a new partner in St. John’s Hospital but what we’re looking at is 16 deed restricted units.”
McCabe Corner
It was not the first time the Housing Trust had thought outside the box.
“I remember when the Trust bought the McCabe property with the understanding that it would be an affordable home project. Now we end up getting three guaranteed affordable units out of it,” Councilman Bob Lenz recalled. “I was disappointed when I heard [Liz] McCabe sold it and then the Trust didn’t have the capital to carry it. Why didn’t they come to the elected officials?”
Housing Trust executive director Anne Cresswell said her organization partnered with the Eden Group only after the $30 million project turned out to be more than the Trust could handle alone.
“Five years ago when we bought it, it was the hottest acquisition that had hit Jackson Hole in a coon’s age,” she said. “If we didn’t buy it, somebody else would have gobbled it up in a heartbeat.”
One-time CFO of the Teton Science Schools, Rich Bloom, thinks the Trust, a 501(c)(3) nonprofit, got in over their heads and sold out. “They bought McCabe Corner with the promise of affordable housing and flipped it in 10 months,” he said.
“Now the town will get just one affordable unit and two employee housing units out of that huge hole in the ground. The Trust made $370,000 on that deal. I’m interested to see how they explain that to the IRS. Did they also sell Redmond-Hansen for a profit? It seems to me they are putting their charity status at risk.”
“People love a good story,” Cresswell responded. “We are not making any money. Every single deal that we have is run through our IRS counsel in Omaha. We are not willing under any circumstance to jeopardize our charitable status because the second we do the IRS will close down our doors. So that’s a non-starter.”
Still, Lenz said he would like to see a little more disclosure. “The Trust manages $4.3 million of public money. They like to say, ‘We are a 501(c)(3) and it’s none of your business.’ Well, it’s still the public’s money,” he said.
Regarding the inclusion of the Eden Group for additional financial clout, Cresswell said, though construction is currently halted due to a loss of financing, “nothing about McCabe Corner has changed from the day it was approved.”
The planning director at the time of the McCabe proposal was Brian Grubb.
“I remember that they started out with very good intentions,” Grubb said. “But as the review process evolved, at one point we felt it no longer contained much benefit to the community in the form of affordable housing. In the end, I guess a lot of us have kind of a black eye or egg on our face because we weren’t diligent enough to put the appropriate restrictions on the approval to make sure it was an affordable housing project.”
Glory View
The Trust’s most recent development is the 15-home Glory View subdivision that redefined affordable housing. Free-standing two-bedroom, two-bath units sold for $325,000 each – the most the Trust had ever charged for an affordable home.
“The Trust just doesn’t want to leave any money on the table,” Bloom said. “They ask, ‘What is the most we can charge for a home?’”
The County Commissioners eventually approved the subdivision as the state’s first Gold LEED certified residential development despite, according to some observers, another Trust ‘switcharoo.’
“They pulled a fast one on Glory View,” Bloom said. “The Trust, the commissioners, the planning office; everyone understood the homes would be in Category 3, priced at $253,600 max. It wasn’t until [a county planner] caught it at the final plot approval that the commissioners realized the homes were being marketed at $325,000. The Trust said they already had the homes committed. There were people ready to move in. They had an eleventh-hour meeting with the county and the commissioners basically had to let them do it. They were given a ‘take it or leave it’ deal and they felt like they were backed into a corner.”
When asked if that’s how it went down, one commissioner who asked not to be identified said, “That’s a pretty accurate description. We weren’t too pleased.”
“Did I make a mistake and not understand that we were supposed to price homes in accordance with the Housing Authority’s pricing policies? Yes. I had no idea.” Cresswell said. “It was an honest mistake that I will learn from.”
The Housing Authority’s stance has been to play nice. “We always fully support the Housing Trust. We also really appreciate the Trust looking to creative solutions,” director Christine Walker said. “But what I have said to them and to the elected officials is our concern is their moving away from the Category 1 homes, because that’s where the greatest need is.”
Another Monday night, another 11th hour
Opposition to the Trust’s proposed revisions at the April 6 night meeting of the City Council came from expected sources. Conservation Alliance spokesperson Kristy Bruner said her organization was for transparency in the government process and would like to see public confusion minimized.
Save Historic Jackson Hole’s Armond Acri worried about the pace of the process and the possible precedents such a deal could present: “Too many developers will find they can’t sell their open market homes in today’s economy and will pull them and repackage them as Category 5 or 6 affordable homes. And why is the hospital involved?”
“The hospital may have to do a little soul-searching,” Lenz said. “I don’t know that they are even filling the Category 3s they have at Glory View.” Cresswell said that St. John’s had a few homes yet unfilled in the shared project.
Prugh was disappointed at the continuance. “I honestly thought the Council was going to say, ‘Great, we lose a Category 1 or 2 but we are going to get something similar, and a bunch of them.’ I thought they would think it was no big deal. Otherwise this is a market project, and the deal goes away.” Prugh said he has the financing to “sit on these for a couple of years” if the Council does not grant the Trust a housing mitigation exemption.
Cresswell also was not ready to admit defeat. “I find it hard to believe they will say no to this. It honestly never dawned on me. It would be a real disappointment, she said.” PJH
Town Council will review the Daisy Bush development proposal, 6 p.m., April 20 at Town Hall, 150 E. Pearl.
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