Hugh Carey / hcarey@summitdaily.com
After months of closed-door discussions, a proposed long-term ground lease between the town of Breckenridge and the owner of Breckenridge Ski Resort looks ready for a vote.
At one time, few people thought such a deal was possible. However, the 44-page document lays out a path for the town to build its long-awaited parking garage on resort-owned land — and it’s set to come before Breckenridge Town Council on first reading Tuesday.
“If we don’t have any big hiccups … I think we should be golden,” said Mayor Eric Mamula, who helped negotiate the proposed lease with Vail Resorts and believes council will pass the measure.
The mayor is so confident the deal will go through that he said the town has already started to wade into some of the planning work with a goal of moving dirt as soon as possible.
“Now that we’re going to have a deal done with Vail Resorts, we need to move fast so that we can get this thing going,” the mayor said.
The proposed lease headlines a busy Tuesday agenda that include topic discussions and anticipated votes on a number of big-ticket items, such as a franchise agreement related to the town’s efforts to build a high-speed fiber network, an annexation of the Kenington Townhomes and the adoption of a new destination management plan, which is meant to help guide the town’s future.
“We have all kinds of stuff going on,” Mamula said of the heavy load, adding that council is also scheduled to take up a land swap with the Summit School District and weigh requested changes to the previously approved Peak 8 development agreement during Tuesday’s worksession and regular meeting.
As for the parking garage, the proposed lease contains language about each party’s responsibilities, the construction schedule, financing, pricing, revenue distribution, maintenance and more.
Breckenridge was poised to start construction on a new parking garage on town-owned property last spring. However, those designs were scuttled when a late offer from Vail Resorts renewed hopes the town might pursue the project on land better suited for such a large, utilitarian structure.
Mamula had previously said he didn’t believe Vail Resorts would be willing to negotiate such a deal, but town officials and company representatives bridged the gap in December when they agreed to a term sheet setting up the framework for the proposed long-term ground lease.
As written, the lease would allow Breckenridge to build a parking garage on the South Gondola Lot, along with surface parking. Together they would have to produce at least 950 parking spaces, or 400 more than are currently on the dirt-surfaced South Gondola Lot.
The lease would come with an initial term of 50 years, beginning as soon as the town starts construction, and the town could extend the agreement for two additional 10-year terms.
The proposed lease describes “a planning period,” that would begin once the document is signed and end July 1, 2020. During that time, both Vail Resorts and the town would have to agree on project designs, and the town would have to deliver preliminary plans no later than the end of March 2020.
While the lease sets out an anticipated timeline, it leaves some wiggle room in the event approval from the Colorado Department of Transportation, a necessary prerequisite, takes longer to materialize than expected.
Another stipulation in the lease mandates the town agrees to transfer all remaining density from the South Gondola Lot to other parcels in town owned by Vail Resorts or one of its affiliates. Mamula said this piece of the agreement largely pertains to the Peak 8 development, which had to secure extra density for that project.
The lease also details how the town and Vail Resorts will have to negotiate a permanent easements for a recreation path along the eastern edge of the South Gondola Lot and for a round-about on resort-owned property at North Park Avenue and Watson Avenue, provided the round-about is either required for CDOT approval or otherwise agreed to by both parties.
“The bike path is a huge path for me,” Mamula said of the resort’s concession, adding he believes the pathway could be a great solution to a dangerous situation in the area and bolster Breckenridge’s bigger plans to promote bicycle ridership.
Per the lease, the deadline for starting construction would be targeted for Aug. 1, 2020. If the town can begin construction by that date, Breckenridge would have until Nov. 1, 2021, to complete the project.
“The whole thought process is that (South Gondola) parking lot, as it exists right now, is only closed for one ski season,” Mamula said of the timeline, adding that neither Vail Resorts nor town officials want to take the parking lot offline any longer than necessary.
The lease contains some room for “excusable delays” along with protections for Vail Resorts in the event construction is stalled or the town defaults on the lease agreement, which could leave the town on the hook for millions of dollars in damages and late fees.
To finance the project, the town will have to adopt an ordinance offering of certificates of participation with the certificates running a maximum term of 25 years. Mamula likened this to issuing a bond.
The amount the town pays in “rent” will be decided by a formula based on the number of parking spaces currently on the lot, revenue generated by the property and other factors, while the company and town will share responsibilities for setting pricing at different times of the year.
Describing the negotiations, Mamula said they covered a lot of ground before both parties agreed to the proposed lease. He said each side compromised along the way in “a business-like” discussion and applauded the give-and-take.
“I’m pretty happy about where we are right now,” he said. “It’s a little nerve-racking, but it’s a good place to be.”