A $35 million transformation of the former Best Western Inn & Suites along U.S. Highway 160 in west Durango will begin this spring and make 120 low-income apartment rentals available sometime next year.
Dubbed the Residences in Durango, it is the city’s biggest low-income affordable housing project and offers more diversity of units than similar developments, ranging from studios to two-bedroom apartments, said Eva Henson, housing innovation manager.
It is the result of the city of Durango’s efforts to increase the supply of affordable and workforce housing, she said. The apartments will be reserved for people who earn 30% to 60% of the area median income, equivalent to an annual income between $23,550 and $47,100 for a two-person household.
Of the 120 apartments, 72 units will be renovated from existing motel rooms and another 48 units to be built from scratch.
Of the units to be renovated, 44 will be turned into studio apartments, 27 will be converted into single-bedroom apartments and one unit will become a two-bedroom unit. Of the 48 new units, 36 will be single-bedroom units and 12 will be two-bedroom units, Kelly said in an email Friday.
Exact rent rates were not available Friday, but rent prices cannot surpass low-income housing tax credit rent limits, said Ryan Kelly with TWG Development, the developer awarded the project by the city. In 2022, the rent window for people earning 30% to 60% of the area median income would be $552 to $1,104 for a single-bedroom unit and $662 to $1,324 for a two-bedroom unit.
The Best Western conversion from motel to residential units will use tax credit financing, a statewide first for that kind of project, and is also the “largest ever tax credit project in Southwest Colorado,” according to a news release from the city of Durango. It is also the city’s first affordable housing development along the Highway 160 corridor in west Durango.
The city has eyed the former Best Western Inn & Suites since 2021 as a prime site to create more affordable housing apartments within a mile from downtown Durango. After securing various funding sources, pre-development work and partnering with TWG Development, conversion of the Best Western into apartments can finally begin.
In August 2021, City Council started the purchasing process of the Best Western with a 4-1 vote of approval, with Councilor Olivier Bosmans voting against it because he didn’t think the city needed to play the role of developer.
The city made a $70,000 payment in earnest – 1% of the motel’s $7 million price tag – which provided it another 90 days to explore the feasibility of converting the Best Western into affordable apartments, search for a developer to team up with and file for federal funding.
During its search for a developer, which ended with finding TWG Development, the city performed pre-development work to ensure the project would be ready for completion.
In October, the city was awarded $3 million to help fund the project after submitting a request for congressional direct spending the previous year.
The conversion is expected to cost about $35 million, according to the release. The city, La Plata County and the Colorado Housing Finance Authority committed $18 million in private activity bond allocations for the project. And the city identified the Division of Housing and the Housing Authority of the County of Montezuma as key partnerships.
In addition to private activity bonds, the developer will use 4% low-income housing tax credits from CHFA as well as the $3 million congressional appropriation, spearheaded by Sens. Michael Bennet and John Hickenlooper, to tackle the conversion, the release says.
“This project has site control, zoning in place, an experienced development team, a recent 3-million-dollar congressional appropriation, and significant support from the local community,” he says. “We are pleased to partner with a community that was and continues to be proactive in creating an environment that facilitates public/private partnership and innovation at scale.”
The apartments will include LED E-Star lighting, low flow features and E-Star appliances as well as EV Charging Stations for future use as needed, the release says.
“The Residences at Durango motel conversion project is part of the City’s multi-pronged strategy to address housing challenges throughout our community,” Henson said in the release. “Housing is a top priority for our City Council, and increasing the community’s inventory of below-market housing units is crucial to ensure that everyone in Durango has a secure, affordable place to call home.”
Renovations are expected to begin this spring with an estimated completion date of 15 months, Kelly said.
cburney@durangoherald.com
