Montrose, CO — City Councilors met for a work session Monday morning, February 5, to review a 2023 development report, a number of grant applications, and a land development code update.
Mayor Barbara Bynum and councilors Dave Frank, Doug Glaspell, David Reed, and Ed Ulibarri met in the City Council Chambers at the Elks Civic Building along with city staff.
The following is a summary of the primary topics discussed during the meeting.
Watch the meeting here.
COMMERCIAL KITCHEN GRANT APPLICATION
City Councilors were presented with an application for a commercial kitchen upgrade to a restaurant planned for 346 East Main Street in downtown.
If approved as requested, the applicant will receive $200,972 to support the purchase of a kitchen to be used by El Dorado Holdings, LLC - Stockmen’s and Ruby June Restaurants. The kitchen will be the property of Alexander Main & Chutes and will remain with the building.
There is currently no grease trap in the building. The cost of the grease trap is higher than usual as the installation is obstructed by a coal chute that runs down the building. This chute will be removed/stabilized during the installation which will help to ensure that the building’s historic features are preserved. Some of the work is also being performed by Alexander & Chutes as they are acting as the general contractor for portions of the project. This was done to reduce costs.
The council will formally vote to approve or deny the application at a future City Council meeting.
LAND DEVELOPMENT CODE UPDATE STATUS
City Councilors were presented with a proposal to expand the boundary of the Redevelopment Overlay District (REDO) in an effort to increase housing density and incentivize more accessory dwelling units or ADUs.
Community Development Director Jace Hochwalt said this effort comes on the heels of the city’s Comprehensive Plan process and multiple updates to the city Municipal Code with the goal of increasing the housing supply to offset rising housing costs in Montrose.
The “REDO" Overlay Zoning District is intended to alleviate certain hardships associated with redevelopment. The district is designed to encourage residential development and redevelopment of existing properties in the core downtown area, with allowances for increased densities compatible with the character of the area. This overlay district allows reduced dimensional standards and a larger variety of housing types than the underlying zoning. It also incentivizes ADU development by offering reduced water and sewer tap fees.
As was discussed at the City Council retreat on October 11, 2023, city staff is proposing an expansion to the boundary of the REDO district. The original boundary, approved in 2008 via Ordinance 2200, primarily encompassed the original town plat of Montrose. Much of the development within this initial REDO boundary took place prior to the 1950s. The REDO boundary was expanded slightly in 2017 via Ordinance 2428 to include more area to the southwest and east of the original town plat, which includes properties built out in the 1960s and 1970s.
The newly proposed area includes 1,422 new parcels totaling approximately 244 acres. The new area includes developments that primarily took place prior to 1990.
Additional proposed revisions to the REDO Overlay Zoning District code section (Section 11-7-9) include the following:
- Minimum lot sizes allowed in the REDO District would remain unchanged at 2,075 square feet, but ADUs would be allowed on lots of 3,125 square feet or greater. ADUs are currently only allowed on lots greater than 6,250 square feet. While 6,250 square feet is the standard lot size of the original town plat, there are many exceptions to this where there are narrowed block lengths and depths. As such, a reduction would allow for more ADUs on parcels that don’t currently meet the size threshold.
- While five-foot setbacks are required in the REDO District for primary structures, ADUs are allowed to have zero-foot side and rear yard setbacks. This has created problems for encroachments into alleys and can create building code compliance issues. As such, city staff is proposing five-foot side and rear yard setbacks for ADUs, which is similar to the requirements for primary structures.
- Removal of lot configuration exhibits within the code which is not compliant with accessibility standards and also adds confusion regarding lot dimension requirements.
- Allowance of the subdivision of ADUs if they meet minimum lot size and setback standards and are connected to their own water and sewer taps. Increasing the allowance of ADUs was a strategy recommended in both the Envision 2040 Montrose Comprehensive Plan as well as the Housing Needs Assessment. As such, it is recommended that ADUs be considered a use-by-right in all zone districts that allow for single-family residences. Specific standards that could apply to ADUs are proposed below:
- An ADU may be attached to a primary dwelling unit, located in a detached unit, or located in an attached or detached garage.
- Only one ADU is permitted on each lot or parcel.
- ADUs must be between 200 and 1,000 square feet, and be subordinate to the primary dwelling unit. ADUs within the REDO District are exempt from these size standards.
- ADUs shall conform with all setback, height, and other dimensional limitations applicable to accessory structures in the underlying zoning district. ADUs within the REDO District would have five-foot setbacks.
- ADUs are required to contain, at a minimum, a kitchen, a bathroom, and a separate and independent entry.
- One off-street parking space shall be required for ADUs, except for those located within an underlying B-1 (Central Business) zoning district, which do not require additional parking.
- Mobile homes, manufactured homes, park models, and travel homes are not allowed as ADUs
The code updates also address several other areas of zoning and planning aimed at subdivisions and the platting of those subdivisions. Other areas include modular housing and housing density. The council will formally vote to update the code at a future council meeting.
2023 DEVELOPMENT REPORT
City Councilors were presented with a 2023 development report detailing Montrose’s building and planning activity and trends over the last several years.
Community Development Director Jace Hochwalt said the report also provides information about demographic and economic changes seen over the same period. While development slowed slightly in 2023 compared to 2022, it still remains strong. Major subdivision developments are working their way through the pipeline, multi-family projects are under construction with significant interest in new multi-family proposals, and commercial interest is still plentiful with businesses large and small relocating to Montrose. As such, it appears that Montrose is positioned for another successful year of development in 2024.
Development in 2021 and 2022 was characterized by rapid growth, largely fueled by the unique circumstances of the pandemic, which included shifts in work and lifestyle preferences, as well as a very low-interest rate environment. With that said, 2023 has been marked by development growth that is shifting back towards pre-pandemic norms. Higher interest rates have led to increased borrowing costs for developers and individuals alike, affecting the affordability and feasibility of new projects. The low-interest rates during the pandemic stimulated development and homebuying, but rates have moved to their highest levels in two decades, hindering financing for new development compared to the past few years.
Even with this shift, 2023 was an above-average year for growth in both residential and commercial development. Major residential projects approved in 2023 include the Residences at Dry Cedar Creek, which is a 60-unit low-income apartment development, and the Village on San Juan, a 45-unit supportive housing development for at-risk youth and the elderly. Both projects are under construction and are expected to move to completion in 2024. Another noteworthy residential project that started prior to 2023 is the Basecamp Apartment complex located within the Colorado Outdoors development. Three of the four buildings in this four-building complex, totaling 96 units, are complete and occupied, with the fourth and final building expected to be occupied in February 2024.
CDBG GRANT APPLICATION FOR VOA RENDEZVOUS APARTMENTS
City Councilors were updated about a proposal to apply for a grant to support the construction of additional senior housing in Montrose
Christopher Ottinger, the City of Montrose's Community Development Specialist said the city staff are seeking the council’s approval to apply for a Community Development Block Grant (CDBG) on behalf of Volunteers of America (VOA). The purpose of this grant application is to secure funding to acquire the Rendezvous Apartments, formerly Pavilion Gardens, located at 2366 Robins Way which is being redeveloped to provide essential low-to-middle-income senior housing in the City of Montrose.
VOA currently owns the Pavilion Gardens Apartments and its adjacent undeveloped land. The existing building is due for rehabilitation due to age, so VOA is taking the opportunity to redesign it for senior housing. With that, VOA secured 4% State Tax Credit funding to rehabilitate the existing building and construct a new 22-unit building adjacent to the existing property. The City of Montrose aims to secure a Community Development Block Grant (CDBG) to provide sub-grant funding to VOA for this acquisition. The CDBG program, administered by the State of Colorado for the U.S. Department of Housing and Urban Development (HUD), provides funding to local governments to address a wide range of community development needs, including affordable housing initiatives. By leveraging this grant opportunity, the City of Montrose can support Volunteers of America’s efforts to preserve and expand affordable senior housing options in our community.
The total funding required for the rehabilitation and development of the Rendezvous Apartments is estimated to be $22,797,480. The Montrose County Housing Authority plans to request a CDBG grant in the amount of $2,860,000, which is specific to the acquisition. They have secured additional funding commitments from other sources, including state tax credits and private activity bonds to cover the remaining portion of the cost. No matching funds are required for this grant.
VEHICLE AND EQUIPMENT DISPOSAL AUTHORIZATION
City Councilors were presented with a proposal to approve the disposal of city vehicles and other equipment that are set for replacement in 2024.
Public Works Director Jim Scheid said city departments replace equipment and vehicles that are scheduled for replacement in the 2024 budget. Most items are auctioned through Govdeals.com and some items are sold at the local Jim’s Auction, or donated or sold to surrounding communities.
As items are sold the amounts collected from resale are included in the Fleet Fund and are used for the next replacement of that vehicle. All items are disposed of in accordance with Section 1-16-5 of the Municipal Code.
Some of the vehicles include a dump truck, a loader, public works equipment, five police interceptor cars, and two police motorcycles along with various other vehicles from the City of Montrose.
VEHICLE PURCHASE RECOMMENDATION
City Councilors were presented with a proposal to purchase two new trucks for Public Works from Montrose Ford for $108,060.
Public Works Director Jim Scheid said the City of Montrose Fleet Division has budgeted for the replacement of 2 F-150s in the 2024 budget. These trucks are utilized by the Police Department and are scheduled for replacement in 2024. The city issued an Invitation for Bids in December 2023 and received one bid from Montrose Ford on January 11. The bid matches the required specifications and the price aligns with what was expected and is considered competitive.
AMENDMENT TO THE CONTRACT FOR THE SALE OF HISTORIC CITY HALL
City Councilors were given an opportunity to review a proposal to amend the sales contract for Historic City Hall between the city and Rathbone PropCo LLC and give authority to the City Attorney to sign all associated documents. City Attorney Chris Dowsey said the city purchased a new City Hall building on Main Street and moved administrative operations from Historic City Hall in March 2023.
During this transition, the owners of the Knights of Pythias building, soon to be the Rathbone Hotel, approached the city regarding purchasing the Historic City Hall building. In March 2023, the city entered into an agreement with Rathbone PropCo LLC for the sale of the Historic City Hall building located at 433 S. 1st Street, with a closing date in August 2023. The costs of the renovations for the Rathbone Hotel began to exceed the expectations of the owners and they approached the city to extend the contract.
In January 2024, the costs of renovations for the Rathbone Hotel have continued to exceed expectations and the owners have requested a portion of the earnest money to pay for such unforeseen costs. The amendment to the contract would return a portion of the earnest money to Rathbone PropCo LLC in exchange for the city having the option to market Historic City Hall. If there is a secondary buyer, Rathbone PropCo LLC, will have the right to execute the sale under the terms of the current agreement.
NEW CITIZEN INTERACTIVE SESSION FORMAT
City Councilors were presented with a proposal to revamp the Citizen Interactive Sessions held before the second work session of each month.
Deputy City Manager Ann Morgenthaler said the Citizen Interactive Session process is being modified to gain more participation from citizens and formalize the process for following up with citizens after each session. A proposed outline of the Citizen Interactive Session describes the purpose, goals, and process of the Interactive Sessions.
Staff will actively advertise the Interactive Sessions to the community in February and begin the new format in March. Citizens will be encouraged to fill out an electronic or paper form (please see the Citizen Submittal Form that is included with this memo) answering two questions:
- What topic do you feel City Councilors should know more about, and what perspective would you like to offer on the topic?
- What can the city do to enhance your experience living in Montrose?
Staff will identify 10 responses from citizens that are well-suited to the conversation format of the Interactive Session and will schedule one citizen for each month’s Interactive Session. During the Interactive Session, the council will make notes on a form, which will help inform the email that the Mayor Pro Tem will send to each citizen following the Interactive Session.
CHILD CARE DISCUSSION
City staff raised the issue of childcare services for city employees.
City Manager Bill Bell suggested a back-and-forth discussion with the council about what options the city could pursue to create a childcare program for its employees. Recent surveys from city employees hinted that childcare demand is high in Montrose and the city should look at the possibility of creating a childcare center for city employees.
GENERAL CITY COUNCIL DISCUSSION
City Councilors discussed the upcoming State of the City presentation this month and the city’s employee banquet this Thursday, February 8.
All City Council meetings are recorded and made available online via the city’s website and cable channels 191 for Charter subscribers and 970 for Elevate subscribers. Replays of council meetings are also broadcast at 6 p.m. on the same channels on days that the council is not in session.
In addition, each regular meeting is archived on the City of Montrose’s YouTube channel.
Residents can watch all regular City Council meetings and work sessions live and on-demand through the city’s Public Meetings Portal.