Front Range developer eyes parcel in west Gunnison

The Denver-based real estate investment firm and developer, Urban Villages, is looking to turn one of the City of Gunnison’s last large vacant parcels into workforce housing. It has yet to lay out detailed plans, or determine if the project is financially feasible, said Villages President Jon Buerge.

The 25-acre parcel is on the west edge of town off Thornton Way, adjacent to Gunnison Gardens. Jeff Hermanson, a Crested Butte entrepreneur and partner at Villages, has owned the parcel for nearly two decades, under the LLC Sherman Street Holdings. Villages has been gathering feedback from the valley’s major employers to determine exactly what type of housing would best serve the Gunnison Valley workforce, Buerge said.

“I was born and raised right over the mountain in Aspen, and so I have seen firsthand what happens when a community becomes more and more expensive … it threatens the entire existence of a town like Crested Butte, because if people can't afford to live there, they can't build their lives there,” he said.

Urban Villages representatives gave a presentation at a recent “Mayors and Managers” meeting in September, requesting feedback from the valley’s major employers — like Gunnison Valley Health, the Gunnison Watershed School District, Gunnison County, FedEx, the Bureau of Land Management and the Rural Transportation Authority with hopes of developing a public transit connection for the site, said LIV Sotheby’s agent Channing Boucher. Boucher, a valley resident since 1989, represents Villages and Hermanson.

The current zoning of the lot allows for hundreds of possible units on the parcel. Villages is envisioning a mixture of primarily rentals, but anticipates offering some units for sale, Boucher said. The plot was listed for many years, but Hermanson and the Villages team decided in recent months to take it off the market and instead develop it on its own, Boucher said.

“The locals’ economy hasn't improved, the hourly wages haven't gone sky high,” he said. “The only thing that's changed is the cost of housing and food, our local economy is still seasonal. It still bounces along, and people still scratch and claw to make ends meet.”

The units, developed in phases, would offer high energy efficiency. The floor plans would be designed to meet the needs of local workers, those who arrive in the high season and need a clean, reliable place to live for six months out of the year, Boucher said. The space could also include a community garden, or outdoor and indoor gathering space. The character of the new neighborhood would reflect Villages’ “preoccupation” with food and biophilic design, Hermanson said, and could involve the Mountain Roots Food Project — which he has supported for years.

“It's partly a free market solution,” Hermanson said. “It envisions a collaboration with the major employers in town and a world class community with lots of different types of housing that would satisfy many of the needs of people in the valley.”

The property is within city boundaries and subject to the 2008-era West Gunnison Plan. The document, a guide for possible neighborhood development in the area, shows a need for strong trail and transit connections, as the land is the largest undeveloped parcel left within city boundaries, outside land in Gunnison Rising. Utilities don’t extend onto the parcel, but get very close on several of its borders, said the city’s Public Works Director David Gardner.

“One challenge to developing utilities or infrastructure in West Gunnison is ensuring that new development fully covers the costs of new infrastructure,” Gardner wrote in a statement to the Times. “This can be difficult due to high upfront costs, coordination with existing systems, and ensuring that fees are set at a level that covers future maintenance while remaining fair to developers.”

Villages will continue talking to community members and employers over the next year. These partnerships could help the Front Range developer contend with the burdens of a permitting process and high cost that accompany construction in remote mountain towns, Buerge said. These issues are often compounded by a competitive market for tax credit incentives and various grants. In coming months, the team will draft possible design alternatives and start pricing the project, he said.

A luxury market for going green

Urban Villages was founded in the early 2000s by Grant and Tom McCargo, who sought to build environmentally-friendly, community-focused spaces that did not sacrifice investor's financial return, Buerge said. McCargo, a Telluride native, was responsible for a wealth of commercial and affordable housing development in the resort town.

“We've been, over time, proving the thesis that you can do wonderful projects that hit the triple bottom line of: people, planet and profit,” Buerge said.

Hermanson, now a partner at Villages, was the longtime owner of Denver’s Larimer Square and a lead partner on the renovation of Union Station. He also owns several properties in Crested Butte and Mt. Crested Butte. This includes several on Elk Avenue, like the Penelope’s Condominiums which houses restaurant Ryce and the Chopwood Mercantile.

Villages has put up projects in California, Pennsylvania and in cities across Colorado. Villages was a former developer on Wildhorse at Prospect, a collection of luxury ski homes at the base of Crested Butte Mountain Resort’s Gold Link Lift. The most recent home in that development sold for $3.3 million, Boucher said. If Villages’ develops the Gunnison lot, it will be the company's first project in the south end of the valley.

Villages' most recent project is a 265-key boutique hotel, Populus, near Civic Center Park in downtown Denver. In marketing for the project, the company claims to have planted 70,000 trees in Gunnison County in a bid to offset the building’s carbon footprint and make it the “first carbon positive hotel project in America.” The trees planted are meant to increase the number of Engelmann spruce, severely impacted by beetle kill in the last decade.

Villages planted the trees in partnership with One Tree Planted and the U.S. Forest Service, according to Sarah Soler, senior director at J. Wade Public Relations, working for Villages. The trees were planted approximately one mile northwest of the Cebolla Trailhead, near the La Garita Wilderness during the summer of 2022. The area is managed by the Gunnison Ranger District. The Forest Service did not reply to the Times’ inquiries to confirm the claim.

Once Populus opens on Oct. 15, Villages’ will launch a “One Night, One Tree” program with the National Forest Foundation, which will plant one tree for every night’s stay. In 2024, this represents up to 20,000 newly planted trees in two Colorado regions: the Grand Mesa, Uncompahgre, and Gunnison National Forests and the White River National Forest, Soler said.

(Abby Harrison can be contacted at 970.641.1414 or abby@gunnisontimes.com.)