Western considers downscaling or scrapping Signal Peak Ranch

Conceptual drawings of the proposed project

The construction of hundreds of apartments on the northside of Western Colorado University — a project named Signal Peak Ranch — appeared unlikely on Feb. 3, as university trustees processed the news that issues related to the land’s title would not allow for the development to proceed as planned.

Rather than a mix of workforce, student and faculty housing, administrators and trustees indicated interest in building housing that would be solely for Western students and staff, adding onto the existing Pinnacles apartments on campus or developing a parcel owned by the university foundation.

Workforce housing could still be built on the Signal Peak Ranch site, but the State Land Board, which owns the land, would likely go it alone and build a project backed by the U.S. Department of Housing and Urban Development (HUD), according to Julie Baca, Western’s vice president of administration.

These changes to Western’s housing plans stem from the discovery that the State Land Board holds title to five acres of flat, vacant land north of Western’s maintenance buildings. The area has ready access to utilities and to the city's street grid.

But the land board’s ownership comes with constraints. Much of Western’s campus is on State Land Board land, and the university has an “operational lease” with the state entity that allows it to use the land for educational purposes through an easement provision.

Through the lease, “we could do faculty, staff housing but not the community component, is kind of their (the State Land Board’s) feel,” Baca told trustees. “And really if we did do the community component, they think they could work with us, but they want a slice of that pie eventually because they have a fiduciary responsibility to support the foundation that they work for.”

The State Land Board was granted two sections of land in every township platted across the state. It exists to benefit K-12 education and does so by generating revenues from its lands.

Western has no clear path forward, Baca told trustees, and she said university staff had too little information to make a recommendation for how to proceed. The next steps, Baca said, are for the developer Servitas and Western to complete a market analysis to better understand housing supply and demand in Gunnison, for there to be a traffic study, for the land board to conduct an appraisal of the land eyed for development and for there to be clarification on a right-of-way easement for Gunnison Rising that could impact how land around campus could be developed. 

Gunnison Rising is a neighborhood under construction to the east of Western along Hwy. 50. Hundreds of units and thousands of people are expected to occupy Gunnison Rising when the area is developed, potentially increasing the city’s population by about 50%.

In response to these complexities, Baca shared a new proposal with trustees, this one outlining a $43 million “scaled back” complex of apartments with 24 units for faculty and staff and 80 units for students. There would be 368 beds in all. This would be the “most expedient” option, she said, and would replace the 24 units lost when previous staff housing buildings were torn down.

Alternatively, the university could purchase the land from the State Land Board and maintain the original scope of the project, which was to build both university and community housing, Baca said. The requisite appraisal could take months to complete, she said.

A third option would be to exchange easements with the land board. The university would gain fee title to 115 acres of the 120 owned by the land board. In exchange, Western would release its rights to use the developable five acres for education, freeing the land board to build affordable housing on its own. That housing would likely be targeted for 60% area median income and would involve HUD.

The fourth option under consideration is for Western to partner with the university foundation and Servitas to build housing on five acres between campus and Gunnison Rising. The university has identified the same parcel as the possible location for an outdoor industry product development and manufacturing site.

An additional option outlined by Baca would be for the Pinnacles apartment building on campus to be expanded. It currently houses only students, but could be expanded to accommodate staff.

Baca said in an email Monday that “while there is no question that faculty/staff and student housing projects fall within the confines of the existing easement, the Colorado Land Board ownership presents complexity in regard to the community component. However, they (the land board) have been very supportive and offered to partner with us in a number of ways.”

Noting that the housing market and traffic studies are to be completed in the coming month, Baca wrote, “we are ahead of the game, getting this due diligence completed prior to signing the predevelopment agreement in an effort to reduce Western’s overall risk.”

The land board, according to Baca, “realizes this is an excellent opportunity to fill a community need and has already begun appraisal work to assist with further negotiations if needed.”

How much risk is too much?

The question of how much financial risk Western should take in the development of housing has been a contentious point among trustees in recent weeks. Trustee Erich Ferchau, a Gunnison realtor and one of two trustees who live in the Gunnison Valley, has been skeptical of a pre-development agreement put forward by Servitas. The agreement would make Western liable for millions of dollars if the project was to fall through before construction. Servitas has insisted that the risk for Western is appropriate and necessary. Trustees are due to formally accept or reject the pre-development agreement in March.

Ferchau said on Feb. 3 that he had met with Servitas about his concerns. He said his position at the meeting was “that I didn’t want the university to move forward on a project where we were at risk beyond what we had control of.”

“I absolutely believe the community is short of housing. I’ve been talking for years about the need for faculty housing. We have not come up with a solution. So as we move forward and define what you guys believe to be the best options, get us the information sooner and let us process it,” Ferchau said to Baca.

Trustee Jim Pribyl and interim university president Nancy Chisholm offered different perspectives on the appropriate amount of risk.

“Life is not about taking no risk, it’s about taking the right risk,” Pribyl said. “I think we’ve reached the end of this discussion to some great extent. But I hope we are not creating some sort of floor criteria that we are not willing to consider some risk to achieve this rather elusive goal of replacing faculty housing on campus.”

“Erich believes that this was brought forward as ‘this is our land and you do the development and that’s it,’” Chisholm said to the trustees. “The reality is we’ve tried this many,many times over many years and this was the most viable model and with a partner that does this on universities all over the United States. And it's not without some risk, right? And I understand Trustee Ferchau does not like that. He and I have had this conversation. If it comes to that point, Erich is one vote, right? But the reality is Servitas expects us to have some skin in the game.” 

The trustees have scheduled their next meeting for March 24.

(Sam Liebl can be contacted at 970.641.1414 or editor@gunnisontimes.com.)