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The Colorado Springs Parkland Dedication Ordinance is giving a potential developer for Hotel Elegante cold feet.

A city requirement to donate almost 6 acres of parkland might stymie construction of 642 attainable housing units at Hotel Elegante, according to the project’s developers.

The builders say the city requirement of donating land or coming up with thousands in fees could sink the Hotel Elegante project.

Housing in Colorado Springs, and in every urban center along the Front Range, is a growing concern. Soaring property values and construction costs, and a limited supply of available housing, has put a spotlight on the need for both attainable and affordable housing in Colorado Springs. While developers like Darsey Nicklasson of DHN Development, the Solid Rock Community Development Corp. and Cohen-Esrey, a Kansas-based firm behind the recently approved Lofts at 1609, are moving forward with new developments in Southeast, a plan to turn Hotel Elegante into 642 attainable housing units might be complicated by Colorado Springs’ Parkland Dedication Ordinance.

The ordinance requires that developers provide 5.5 acres of dedicated parkland per 1,000 residents, or pay fees in lieu of acreage. In a July 7 review letter sent to the developers behind the proposed Hotel Elegante project, local landscape architects NES Inc. and Texas-based SHIR Capital, the city asked for 5.78 acres of land for new parks or $670,248 in fees. 

The city’s review letter noted: “The parkland dedication ordinance directs that staff first consider whether an applicant or project has capacity to dedicate parkland based upon both the city’s Level of Service, minimum park standards and the obligation due. In this case, the obligation is significant, with no neighborhood park within a walkable half mile of this site. In accord with the Parkland Dedication Ordinance and to meet our level of service needed for the added units and people using the park system, we are requesting parkland. This land can be from this proposed redevelopment property, or within an approximate half mile of the site. Please respond with how the land obligation listed above (5.78 acres) can be met.”

According to Elan Gordon, a principal with SHIR Capital, these requirements put an additional burden on developers who are juggling rising construction costs and real estate prices. 

“There have been substantial impact fees totaling nearly $1 million or the requirement to provide parkland,” he said in an email. “We did not budget for these items, nor the delays in planning for this extra cost burden. We have done hotel conversions elsewhere and this is the first time we are encountering this type of requirement. This has certainly jeopardized the viability of the project. We are trying to work through things on our end to keep the prospect of providing Colorado Springs affordable housing alive.”

In February, the Colorado Springs City Council moved to reduce the amount of parkland required of developers, from 7.5 acres per 1,000 residents to 5.5, but at the same time, they increased the amount of the fees that developers would be required to pay in lieu of parkland, based on real estate appraisal prices. Colorado Springs isn’t the only Front Range city with a park ordinance that requires green space or fees accompany a development. 

“Gateway is the only area of [Denver] where there are requirements for developers to dedicate parkland and/or pay impact fees,” said Yolanda Quesada, the director of communications and marketing for Parks and Recreation for the City and County of Denver in an email to the Indy reporter Pam Zubeck. 

Additionally, Aurora, Castle Rock, Fort Collins, Pueblo and Trinidad all have a fee structure for parks, though amounts vary. Aurora requires 3 acres per 1,000 residents, or $178,032 per acre for fees in lieu of land, for parks, while Pueblo charges between $56 to $76 per undeveloped lot or dwelling unit.

While regulations like the parkland ordinance can add costs to projects, for some developers it is just the cost of doing business. Nicklasson, who recently broke ground on Mosaica, a 223-unit housing development in Southeast, and also recently announced Kaleidos, a project slotted for land near Fountain Boulevard and Chelton Road, said providing parkland is an important aspect of responsible development. 

“I am in favor of our new ordinance,” she said. “Parks are essential to our communities for our health and well-being. We have to pay for new parks and improvements somehow.”

While the loss of Hotel Elegante’s 642 housing units might seem like a setback for a city where housing demand is outpacing supply, there is no shortage of developers looking to build. 

The El Paso County Board of Commissioners recently approved tax breaks for the Lofts at 1609, a 137-unit, $35 million affordable housing project to be located at the intersection of South Academy Boulevard and Verde Drive. Colorado Springs Urban Renewal Authority will oversee the project, to be built by the Kansas-based Cohen-Esrey Development Group. Construction is expected to begin in October or November of this year and be complete by May 2023.

Additionally, the Equity Group has proposed a development of 134 units of market-rate housing. The two-building project would be built on a six acre parcel at the southwest corner of near Airport Road and Powers Boulevard.

Construction is scheduled to begin this fall and finish in the spring of 2023. Construction on The Village at Solid Rock, a 77-unit affordable housing project for the Pikes Peak Park neighborhood, backed by the Solid Rock Community Development Corp., is scheduled to begin construction in October. 

Editor’s Note: Pam Zubeck contributed to reporting in this article.