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Telluride is latest Colorado town where housing, conservation clash

The twon of Telluride and San Miguel County last year purchased three 35-acre parcels near the Telluride airport – the runway is visible in the center of this photo – and rezoned the former sheep ranch for community housing with plans to build affordable housing units. Neighbors in the communities adjacent to the proposed development sued the county and town to overturn the new zoning designation. (Morgan Smith/ Special to The Colorado Sun)
Push for rural affordable housing runs into battle to preserve wildlife, open space and agriculture

As state lawmakers and local politicians push a tsunami of affordable housing projects into rural Colorado, the battles to preserve wildlife, views, open space and agricultural acres are growing more pitched.

In Aspen, Glenwood Springs, Basalt, Vail and Rifle, opposition to plans for high-density affordable housing has met vehement opposition in recent months. The latest battleground is a rural mesa near Telluride’s airport, where the conflict between housing, history and conservation is erupting.

San Miguel County and the Town of Telluride last March trumpeted a bold answer to the local housing crisis, spending $7.2 million on three 35-acre parcels in the Diamond Ranch community on Deep Creek Mesa 6 miles from town and quickly rezoning 39 acres of the former sheep range as a Community Housing Zone District.

The newly created zoning designation fast tracks permitting for higher density, affordable projects and allows clustered development with as many as 20 housing units per acre. At the Diamond Ridge project that means as many as 780 affordable housing units on three parcels that could previously host only one home each. The Department of Local Affairs’ State Housing Board provided a $5 million grant supporting the acquisition.

“It is the position of the county that housing for people who live and work in the local communities is a high priority,” reads the county’s rezoning plan for the 39-acre Diamond Ridge project. “When rezoning land to the (community housing) zone district, the higher density that may be achieved in that zone shall not be considered incompatible with surrounding land uses, neighborhood characteristics or community character.”

A district court judge last month rejected the Diamond Ridge rezoning plan, siding with a group of homeowners on the mesa who for decades had purchased lots under the assumption that the area would remain rural with single-family homes separated by many acres.

“We’ve just been very frustrated in a process that is all upside down. They did it so quickly, buying it for a bunch of money without any development plan or sketches or even a rough idea on the cost of water and sewer upgrades up here,” said homeowner Morgan Smith, a member of the Last Dollar Collective, a group of homeowners along Last Dollar Road on Deep Creek Mesa. “They set it up like it was a done deal and we couldn’t say anything about it.”

The county this month appealed the ruling with a motion to reconsider, arguing the rezoning is consistent with the county’s comprehensive plan and a “specific decision made upon a specific application using the evidence in the records before the board” of commissioners.

“This court cannot substitute its judgment (or the plaintiffs’) for that of the board of county commissioners,” reads the motion for reconsideration. “To do so would result in a manifest error of fact or law.”

Smith and his neighbors are quick to say they support affordable housing. There’s very little disagreement that the community in the narrow canyon is in dire need of attainable housing. Home prices have more than doubled in recent years. Rents have soared as new owners buy homes for record prices. Many of the homes in Telluride are owned by out-of-towners who occasionally visit. Flat parcels are rare around Telluride, and the Deep Creek Mesa above the canyon floor offers some of the last land available for development near town.

In May last year, Smith was among more than 30 Deep Creek Mesa homeowners and their associations who hired an attorney asking the county to slow the rezoning process. They also asked that San Miguel County Commissioner Hilary Cooper recuse herself from the approval process, arguing Cooper, who was elected in 2016, was “an advocate and architect” of the rezoning plan whose support for the community housing proposal jeopardized her ability to serve as an impartial judge.

“Her yes vote is a foregone conclusion,” reads the letter sent from homeowners to the county commissioners before the board voted in May.

The three San Miguel County commissioners unanimously approved the new zoning plan for Diamond Ridge. The rezoning of the land near the airport landed a year after Gov. Jared Polis signed a law that encouraged local governments to incentivize construction of high-density affordable homes.

A month later, the collective of homeowners sued the owner who sold the three parcels and the board of commissioners in San Miguel County District Court. The lawsuit argued the new zoning violated contracts and covenants that limited the parcel to one home for every 35 acres and agreements that protected the former sheep ranch as a “Forestry, Agriculture and Open Zone District.”

‘A minor, short-term setback’

The three parcels had been listed for sale for 20 years before Jack Vickers bought out his partners’ interest in the lots in 2020. Vickers and his partners’ Diamond Ridge Telluride, LLC. in the early 2000s purchased a 420-acre sliver of a sweeping sheep ranch from Albert Aldasoro. The three lots Vickers sold to the county are not the best in the community because they abut the Telluride airport.

Vickers, the son of the late Jack Vickers who founded Castle Pines, in 2020 began trying to get the Aldasoro family to remove restrictions that allow only single-family homes on the lots and the family refused, according to the lawsuit filed by the homeowners. (The parcels are still used for sheep grazing.) In 2021 he began negotiating with the county and Town of Telluride to discuss selling the parcels for high-density development. But that would require a zoning change.

The Town of Telluride and San Miguel County want to build affordable housing units on 39 acres near the Telluride airport. The runway is visible in the left corner of this photo. A judge rejected the county’s effort to rezone the property from agricultural use to allow affordable housing. (Sarah Lavender Smith/ Special to The Colorado Sun)

The 34-page lawsuit includes dozens of emails and exchanges among Vickers, county housing officials and commissioners detailing how a new Community Housing Zone District on the property would allow increased density. The lawsuit also contended that Cooper should have recused herself from the vote to rezone because she was involved in creating the new community housing zoning designation.

District Court Judge J. Steven Patrick in December agreed with the homeowners that Cooper was “deeply involved” in the purchase of the land and “expressed a clear bias” in favor of the rezoning it for housing.

In his ruling, Patrick wrote that Cooper suggested to Telluride’s housing director that the county declare an emergency in order to speed up the land acquisition and rezoning. “This means that it can reasonably be perceived that Commissioner Cooper prejudged the matter and participated in the rezoning hearing with an actual bias,” Patrick wrote.

The ruling concluded that homeowners “were deprived of due process” by Cooper’s vote on the rezoning.

Cooper declined to comment on the lawsuit.

The homeowners also argued that the new high-density community housing designation did not fit the county’s comprehensive zoning plan and that any property zoned for agricultural use should be the lowest priority for conversion into high-density housing.

The county commissioners responded to the lawsuit arguing that the rezoning aligns with recent amendments to the county’s master plan and land use codes that allow clustered development of higher-density homes in certain areas.

Judge Patrick ruled the commissioners did not prove that the high-density rezoning on Deep Creek Mesa fit into the county’s master plan. He concluded the 39 acres was “illegally spot zoned” and granted the homeowners’ request to vacate the commissioners’ rezoning of the property.

The county and town called the ruling “a minor, short-term setback.”

“We will continue to diligently address the housing crisis and present viable development opportunities to build affordable housing for our residents and workforce,” Town of Telluride Attorney Kevin Geiger said in a statement last month, noting that the $5 million housing grant through DOLA “remains in place” while the county and town plan next steps.

The county is in the process of revising its master plan for the eastern end of the county that includes all the land around Telluride.

When asked to identify types of land use changes that could be coming in San Miguel County, a housing focus group organized to inform the master plan update in November identified “more multifamily development,” “upzoning of unincorporated areas,” “higher density,” “affordable housing” and “more housing for workers.”

The town of Telluride and San Miguel County want to rezone 39 acres near Telluride airport – circled in red in this map – to allow for affordable housing. Neighbors in the rural community sued the county to block the rezoning.
‘Seems like the opposition here is more of a NIMBY thing’

It’s not just 35-acre parcels on Deep Creek Mesa, with many homes on much smaller lots. And not all of the hundreds of homeowners across the sprawling former sheep ranch are united against the Diamond Ridge project.

The roughly 1,500-acre Aldasoro Ranch was initially settled by Basque sheepherders who supplied lamb and wool for miners in the early 1900s. As the Aldasoro family backed out of sheep ranching in the 1970s and 1980s, they carved out several different neighborhoods on their land, creating covenants and agreements with new owners that kept the land rural and open. Part of those agreements included setting aside deed-restricted, affordable homesites.

Lara Young and her family purchased one of those deed-restricted lots and built a home in the 166-homesite Aldasoro Ranch subdivision eight years ago after moving from a deed-restricted home they built in Mountain Village.

She supports the new Diamond Ridge project.

“There are very few families who live in town who are actual year-round local families,” Young said. “This is a great development that would provide a lot of housing, much-needed housing. It seems like the opposition here is more of a NIMBY thing and not really a desire to protect open space. It’s right by the airport and it’s not a desirable spot. There’s a reason why it’s never sold or been developed, you know.”

Adam Chambers also lives in the Aldasoro Ranch subdivision in a home on 3 acres. While he has concerns about water, traffic and wildlife, he’s also worried about what the valley might look like if working people can’t afford to live there.

“I’m pro-housing and I’m pro-neighbor,” said the climate scientist who moved onto the mesa in 2017. “Let’s behave as neighbors first and try to find solutions as a community rather than being so divisive.”