Approval Includes 19 Conditions MOUNTAIN VILLAGE – A major hotel project that proposes adding 40 short-term rental units or “hotbeds” to the town’s lodging mix, over 20,000 square feet of commercial space, and other public benefits gained an important approval on Thursday when the Mountain Village Design Review Board voted 5-0 to approve the sketch Planned Unit Development plan for the project.

DRB members Michelle Sherry and David Eckman were absent from the meeting.

“I just want to say what a fantastic job you guys did with those changes,” said DRB member Bill Hoins, lauding the applicant, Mountain Village Development Partners, LLC, for incorporating multiple design changes into the project recommended by the board during its first of two hearings on the sketch plan held on June 10.

“It’s just a huge difference, it’s really nice,” Hoins continued.

The approval of the proposed hotel, which is sited on four separate lots on what is now a parking lot between the Westermere and Shirana buildings and would also encroach, as is permitted in Mountain Village, on town-owned open space, came laden with 19 separate conditions.

Among them is a requirement that 40 of the 66 one-room “efficiency lodge units” being proposed be deed-restricted as hotel rooms. As such they may not be sold into private ownership (where they are likely to remain unoccupied for much of the year), instead remaining available for short-term rentals.

As the town completes its Comprehensive Plan it has become clear that it lacks the critical mass of short-term rentals necessary to generate sustainable economic activity there, so securing more hotbeds has become a stated goal.

The applicant has also proposed 38 larger “lodge units” that can be made up of a two-room space plus a mezzanine, up to two separate bathrooms, and separate kitchen facilities.

Rather than having so-called “lock-off” units contained within the larger lodge units in which one of the bedrooms would be under a separate lock, as is provided for in the town’s Land Use Code, the Mountain Village Hotel plan envisions combinations of lodge units with efficiency units that could be combined to form a suite of rooms.

The concern is that one owner may purchase multiple units with the intent of combining them, and, should that owner choose to not make them available for short-term rental the town would lose potential hotbeds.

As a way of urging the maximum number of those privately owned units into the rental pool as hotbeds when their owners are not using them, the approval requires that the units must retain separate, lockable doors between them.

Each lock-off entry must have a separately keyed entry from the others to which it is attached and have its own unit number. Additionally, each lock-off unit must be shown as a separate condominium unit on the project’s condominium map, and a single owner is allowed to own a maximum of three units in a lock-off configuration.

“We think this will help ensure some number of lodge and efficiency lodge units that are unrestricted will be placed into the rental pool,” Hawkins said.

While the mix and number of the unrestricted units could still change during the development review process, the 40 hotel units cannot.

Another condition requires assurance that the hotel will be operated by a full service hotel brand “with significant experience in full service operations with broad marketing distribution capabilities.”

The applicant will also be required to replace all current town surface parking spaces that will be eliminated by the project, provide and maintain plaza-level public restrooms, make improvements to the plaza between the existing Westermere and Shirana buildings including a town-approved snow-melt system, provide for two conference rooms offered for rent to the public at rates comparable to the Telluride Conference Center, and pay $1.085 million for affordable housing mitigation prior to the issuance of any building or other permits for the project.

The approval marks the third step in a five-step PUD approval process that in Mountain Village (and elsewhere) provides for tradeoffs of public benefits in exchange for zoning variances.

The applicant must now submit a final PUD plan that will go before both the DRB and council for their separate and final approvals.

“I think they’re planning on submitting at the end of August/early September to go before the DRB in late September/early October,” said Hawkins.

“I know they’d like to move forward as soon as possible.”