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Developer proposes small homes on Dillon Motel site 

Manitou thinks tiny

click to enlarge Tiny houses could require changes to Manitou’s code. - COURTESY WILLIAM GUMAN AND ASSOCIATES
  • Courtesy William Guman and Associates
  • Tiny houses could require changes to Manitou’s code.

Tiny house aficionados say the miniature dwellings offer an opportunity for homeowners to downsize, save money, and perhaps even travel with their home in tow.

But so far — despite having one of the largest tiny home manufacturers in the country, hosting the annual People’s Tiny House Festival, and passing a resolution that allows owners to park them on unincorporated land — El Paso County has few residents who actually live in tiny houses.

Hotel investor Roger Guzman and land planning firm William Guman and Associates hope to change that in Manitou Springs — where a growing shortage of workforce housing prevents most people who work in the city from living there. They’ve proposed a new 38-unit tiny house development on the site of the old Dillon Motel (the motel units would also remain as rentals), just inside city boundaries on Manitou Avenue.

“We see this as something that creates attainable housing for folks that are otherwise priced out of the market,” says planner and landscape architect Bill Guman.

The homes would range in size from about 250 to 450 square feet, and cost from $70,000 to $85,000, Guman explains. They would be secured on foundations and hooked up to city utilities.

While the homeowners wouldn’t own the land itself, they wouldn’t be paying an exorbitant lot rental fee — Guman anticipates residents would only be charged a maintenance fee of $40 to $50 a month.

“We’re looking at folks that might be minimum wage earners,” he says, adding that he’s spoken with the Colorado Springs Housing Authority about potentially adding income restrictions to the lot to make federal financing available for low-income homebuyers.

click to enlarge Guzman, who’s remodeling the Dillon Motel, wants to build tiny houses behind it. - COURTESY WILLIAM GUMAN AND ASSOCIATES
  • Courtesy William Guman and Associates
  • Guzman, who’s remodeling the Dillon Motel, wants to build tiny houses behind it.

Potential homebuyers might include people employed at Guzman’s properties. He bought the Dillon Motel site earlier this year and is in the process of renovating its 12 cottage-style units, which he plans to rent out. He also owns the El Colorado Lodge and the Pikes Peak RV Park & Campground, Guman adds.

The largest employment sectors in Manitou Springs are retail, accommodation, food service, and arts and recreation, according to a recently published housing study commissioned by the city. More than 85 percent of people who work in Manitou earn less than $3,333 a month — and most can’t afford rising housing costs. Only 17 percent of people who work in the city actually live there, the study notes.

Coreen Toll, who chairs the Housing Advisory Board in Manitou Springs, says the tiny house proposal could also benefit the city’s aging population, especially those on fixed incomes who may want to downsize.

“Of course,” she adds, “it being on the bus route there, that’s one of the important factors for any development that is servicing attainable housing or low-income individuals ... and that would be good for senior citizens as well.”

Victor Grimm, the Dillon Motel’s previous owner, says he’s discussed the tiny house concept with Guzman and loves the idea of adding owner-occupied units. As a real estate attorney who also has rental properties in Manitou, Grimm says he sees a real need for affordable housing.

“I just don’t have enough inventory to help out these folks who need an affordable place to stay,” Grimm says.

Before Grimm sold the Dillon Motel site to Guzman, Grimm had purchased it from the former longtime owner in 2017.

“My original vision was to rehab the motel units and basically fix them up and get them up to modern standards,” Grimm explains. “Once I got in there, I sort of bit off more than I could chew I think.”

Grimm had decided the only option that would work with his budget was to demolish the 90-year-old property, when Guzman offered to buy it and save the existing units.

“I really appreciate that, because I really love that architecture,” Grimm says. The sale was finalized in February.

But while fixing up the motel itself might be doable, there’s a long road ahead for Guzman and Guman. For one, says city planner Kimberly Johnson, the city doesn’t even have zoning standards in its code for the type of development they’re proposing.

“We’d probably have to use some kind of a planned [unit] development [zoning designation] or something like that, because we don’t have provisions for that small of [a] lot size,” Johnson says. “But unfortunately, we don’t have planned unit development standards in our code, so we’re currently researching other communities’ standards to determine kind of how to proceed with that.”

Adding this flexibility to the Manitou Springs city code could also address the project’s housing density, which would exceed current limits for the zone district, Johnson says. The new code provisions would have to be approved by City Council.

Another challenge ahead: About one-third of the property, situated along Fountain Creek, is in the floodplain — meaning the developers would have to add measures to shore up the land before building.

“If you were to try to develop it right now, it would be an impossibility if you’re putting traditional housing or anything else there, as long as it remained in the floodplain,” Guman says. But the lot is also in Manitou’s urban renewal area, which means it could be eligible for funding to help with those costs.

“Retaining walls are an eligible expense for tax increment financing (TIF) dollars,” Jim Rees, executive director of the Manitou Springs Urban Renewal Authority, writes in an email. “The project has to generate sufficient property tax or sales tax revenue over what it is currently generating in order to create the tax increment.” A TIF recipient is allowed to keep all, or a portion of, tax money collected post-development that exceeds the amount of tax collected pre-development to pay for certain qualified improvements.

The Urban Renewal Authority board would need to approve any such financing, Rees adds, which is also contingent on whether the developer could also prove a “financial gap” between the available funding and the cost of fixing the floodplain issues.

So far, despite the obstacles involved, the concept has received a mostly positive reception from city officials. Manitou Springs Mayor Ken Jaray says he believes such a project could “fit in great,” especially if it helps create a more walkable environment in the urban renewal area at the eastern end of Manitou Springs.

“I haven’t seen the specific proposal, but the idea of creating a walkable area where visitors and residents can enjoy dining and entertainment and other experiences — I think that would be great,” Jaray says. “So to the extent that this is compatible with that and adds to that vision, I think it would be a good addition.”

Construction along the Colorado Avenue/Manitou Avenue corridor through the unincorporated “No Man’s Land” to Manitou, part of the multi-jurisdictional Westside Avenue Action Plan to revitalize the area’s public infrastructure, is also nearing completion.

While the city hasn’t had any other proposals for residential developments in the Manitou Springs’ urban renewal area, Rees, Jaray and others hope that with construction wrapping up, the city will see more developers approach it with plans.

“Our goal here is to try to develop that corridor, whether it be fixing up the existing properties that are there, working with the property owners to do something like that, or ... total redevelopment of certain sites, we’d look at that too,” Rees says.

The next step for Guman and Guzman is to present their housing concept to the Manitou Springs Planning Commission. But they’re already looking at opportunities to add tiny houses in other places with a shortage of workforce housing, Guman says.

“We’re looking at [a tiny house development] in Idaho Springs to address the lack of attainable housing for casino workers in Blackhawk and Central City, and we’re also looking at a couple of other communities,” Guman says. “We think it’s an idea that’s been used successfully elsewhere in the country, and we’re hoping to jumpstart the idea here in Colorado as well.”

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