As the president of Pagosa Housing Partners, I’ve had the pleasure of participating regularly in meetings of the Pagosa Springs Housing Coalition — a friendly collection of regional housing organizations hosted by the Town of Pagosa Springs Planning Department. Most of the Coalition participants are paid staff members of their respective organizations; a couple of us are volunteers.
We share information and ideas about potential solutions to the ongoing housing crisis in Archuleta County.
Our Coalition meeting on January 27 was less pleasant. In fact, it was a bit painful.
We learned, during the meeting, that developer David Dronet, a partner in Texas-based Olympus Real Estate Group and managing principal for the Springs Resort on Hot Springs Boulevard, had delivered eviction notices to 16 families who live at 158 Eaton Drive.
The notices, dated January 20, demand that the residents move out by February 19, 2022.
The eviction notice copy I was provided (by a local activist) states:
Last fall, Olympus SRH Eaton, LLC (“Company”) entered into an agreement to purchase the property located at 158 Eaton Dr. (“Property”) in which you are a tenant. The Company closed on the purchase of the Property last week on January 14th, 2022 and is now the owner of the Property. During its inspections of the Property the Company found extensive water damage and ventilation issues in the attic and crawl space beneath the buildings that could affect the safety and habitability of the Property. Therefore, the Company will be taking immediate action to repair the affected areas.
The repairs are estimated to take two (2) months to complete, and the Property cannot be lived in while the work is being completed. By way of this notice, you are hereby notified that you must vacate the Property. Once repairs are completed, you may apply to rent a unit in the Property again through the Property manager.
Pursuant to CRS 13-40-107, you are hereby notified by the undersigned owner that your tenancy of the land and premises described below is terminated as of February 19, 2022 at 11:59pm and you are accordingly notified to vacate said premises and surrender possession thereof on or before said date and time.
Why anyone would evict 16 families in mid-February in Pagosa Springs, during a serious housing crisis, was difficult for the members of the Housing Coalition to wrap their heads around.
But the big picture might be stranger still.
Developer David Dronet, representing Olympus SRH, purchased an office building on Lewis Street in December 2020 and set to work converting it into rather tiny apartment units which he described as “affordable housing units.” Although the apartments were intended to serve the Springs Resort as private employee housing, both the Town Council and the County Commissioners threw public money at the project.
Now Olympus SRH (“Springs Resort Housing”?) has purchased two apartment buildings located behind City Market on Eaton Drive — which happen to be two of the very few apartment buildings annexed into the Town of Pagosa Springs when, during the 1990s, the Town government cleverly annexed nearly all of the commercial properties along Highway 160, between 10th Street (downtown) and North Pagosa Boulevard four miles to the west… but annexed almost none of the surrounding residential neighborhoods.
I have been told that Mr. Dronet intends to use at least some of the units to house Springs Resort employees.
Obviously, the Springs Resort will have an expanded need for employee housing if they proceed with building the 84,000 square-foot hotel/restaurant/spa they’ve proposed for a vacant meadow adjacent to the existing Springs Resort. Equally obvious is the fact that Pagosa is suffering from a serious housing crisis — lack of supply, and outrageous prices.
When I visited 158 Eaton Drive earlier this week, it appeared that perhaps one or more apartments have already been vacated by the current tenants, because I found a large (and rather sad) collection of furniture and household goods sitting in a pile next to the parking lot.
I also learned that Olympus SRH Eaton LLC had applied to the Town Planning Department to have the property ‘re-zoned’.
The 16-unit apartment complex, on a one-acre parcel, is what the Town calls ‘non-compliant’ in terms of zoning… which means, essentially, that it doesn’t fit into the bureaucratic conceptual boxes created by the Town Planning Department. It was originally built in 1983 as a 16-unit condominium by Eaton Inc. — primary developers of the Pagosa Lakes subdivisions.
It appears that, in 1998, the ‘Village Condominiums’ complex was purchased by three Pagosa businessmen, at which point I assume the condo units became ‘rental apartments’.
Last month, according to the County Assessor’s info, the 16 separate apartment units were purchased by Olympus SRH Eaton LLC, for $2 million, suggesting a price for each unit of about $125,000.
Mr. Dronet reportedly plans to make major repairs or changes to the complex.
But the building is considered ‘non-compliant’ because it was zoned by the Town Planning Department — long after it was actually built — as ‘R-12’. In the R-12 zoning district, you cannot legally build more than 12 dwelling units on a one acre parcel (unless you have special permission.)
The Town Land Use and Development Code generally requires property owners to become ‘compliant’ whenever the owner expands the building footprint or does major renovations. Of course, to make the 158 Eaton Drive apartments compliant with the Town’s ‘R-12’ zoning, Mr. Dronet would need to demolish four units… which I think we all can agree would be an incredibly stupid requirement.
The other way to make a ‘non-compliant’ building into a ‘compliant’ building is to change the zoning. The zoning for a one-acre property could be changed, for example, to ‘R-22″ which then allows 22 units per acre. That would actually allow Mr. Dronet to add several more units to the complex. Or to chop up the existing apartments into even smaller apartments.
But this re-zoning process might smell of an illegal process called ‘spot zoning’ — where a single parcel in a commercial or residential neighborhood has its zoning changed, to accommodate the desires of a single property owner.
I have been told, by someone who ought to know, that changing the zoning to accommodate Mr. Dronet’s property purchase, and plans, would not qualify as ‘spot zoning.’
But I still need to discuss an unsettling business tactic, that now seems to be creeping into the Pagosa Springs real estate market:
Wealthy business owners, buying up properties and evicting our existing working families, to create ‘company housing.’
Could this become a worse problem than vacation rentals?
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.