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HomeMy WebLinkAbout2022-02-22 Agenda Vail Local Housing Authority Minutes February 8, 2022 3:00 PM Virtual Meeting 75 S. Frontage Road - Vail, Colorado, 81657 PRESENT ABSENT Steve Lindstrom None Mary McDougall Greg Moffet James Wilkins STAFF George Ruther, Housing Director Martha Anderson, Housing Coordinator 1. Call to Order 1.1. Zoom Meeting 1 1.2. Call to Order A quorum is present. Lindstrom called the meeting to order at 3:03 PM. 2. Citizen Participation 2.1. Citizen Participation There are no comments. 3. Approval of Minutes 3.1. VLHA December 14, 2021 Minutes MOTION: MOFFET SECOND: WILKINS VOTE: 4-0 AP 3.2. VLHA January 11, 2022 Minutes MOTION: MOFFET SECOND: MCDOUGALL VOTE: 3-0 AP (WILKINS ABSTAINED) 4. Main Agenda 4.1. Housing Policy Legislative Initiatives. Presenter: Scott Robson, Town Manager This presentation was cancelled and moved to the next VLHA meeting on February 22, 2022. 4.2. Request for a recommendation of a proposed amendment to the Gillett residence deed restriction. Presenter: Dominic Mauriello, MPG Principal The Gillett residence at Sunlight North Condominium Unit 8 has a special deed restriction that is attached to Lot 12 in Spraddle Creek Estates so it cannot be sold separately. Owners would prefer to be able to sell the unit and allow it to be occupied and owned by a local employee. The request is to swap up the special deed restriction recorded in the year 2000 for the Town’s most current deed restriction either Type III or Type IV, therefore, allowing the unit to be sold or rented by a local employee. Consensus is made that this request furthers the objectives of our housing policies today. A request for a formal recommendation from the VLHA to the Vail Town Council to proceed with the amendment of the current deed restriction was proposed and approved by all members. MOTION: MOFFET SECOND: MCDOUGALL VOTE: 4-0 AP 4.3. Request for recommendation of a proposed amendment to the Four Seasons SDD. Presenter: Kristin Williams, Applicant’s Representative Conversation ensued around the opportunity to increase the utilization of the 54 employee housing door room beds at the Four Seasons hotel. The 54 beds are currently being under utilized because their location and configuration. Kristin shared a proposal in response to initial ideas from the VLHA on the relocation of these units off-site and how that may work. The purpose of this amendment is to address the challenges with employee housing. There are currently 26 door rooms on-site which consists of 56 beds, 2 door rooms sharing one bathroom. Some of the challenges are lack of kitchen facilities, shared bathrooms and layouts are not conductive to families, lack of independent facilities, units not addressing long term housing needs to help retain employees. All these challenges have caused low occupancy with the peak being only 32 tenants in 2018 and 37 in 2019. Utilization in average is between 45% to 55%. The proposed amendment to SDD allow for replacement of 32 on-site deed restricted door room beds with deed restricted off site housing within Vail, Eagle-Vail, Avon, and Edwards at a 1:1 bedroom ratio, reconfiguration of the underutilized door rooms into hotel rooms and reclassification of certain accommodations units into dwelling units. Concerns regarding the 1:1 exchange ratio, the mitigation region, parking issues, and enforcement of deed restriction units outside of Vail were raised by Authority members. Consensus was made that the proposed amendment needed to include a value consideration to deed restrictions outside of the Town of Vailand that a deed restriction in the Town of Vail does is more valuable than a deed restriction outside of Vail. Kristin was tasked with aligning the amendment with the commercial linkage regulations to include number of employees housed based upon unit size, including potential employee deed restriction purchase opportunities, and adding a differential for deed restrictions off-site vs on-site. 5. Matters from the Chairman and Authority Members 5.1. Matters from the Chairman and Authority Members Presenter: Steve Lindstrom, Chairman An update was givenregarding housing discussion during the Town Council Retreat and how housing was common theme in reviewing the 2018-2020 Action Plan priorities. There was also conversation about housing sustainability, housing opportunities and threats within the Town of Vail. An update was given on the CDOT parcel in East Vail, final appraisal and environmental assessment should be finalized by the end of the month. The VLHA would like to meet individually with Council members on housing financial opportunities. Discussion ensued around the possibility for the VLHA to provide recommendations around a local’s homebuyer assistance program, this program will be for people that are interested in homeownership in the Town of Vail, that are financially qualified and capable to own but that are unable to compete within the current cash buyer market. The Town of Vail will then step in and be a cash buyer for this buyer. This can be a great opportunity for the Town of Vail to deed restrict more properties. There was also about conversation on the mechanics of this program and the type of revolving fund needed to operate this program. Further discussion on this topic coming on a future VLHA meeting. Eagle County just sold the Lake Creek Village apartments and there may be opportunity for the Town of Vail to bring some ideas on how to direct some of the funding received from this sale. 6. Adjournment 6.1. Adjournment 4:38 PM MOTION: MOFFET SECOND: MCDOUGALL VOTE: 4-0 AP 7. Future Agenda Items 7.1. Land Banking (sale of GRFA) Investment Banker Discussion 8. Next Meeting Date 8.1. Next Meeting Date February 22, 2022 Meeting agendas and materials can be accessed prior to meeting day on the Town of Vail website www.vailgov.com. All housing authority meetings are open to the public. Times and order of agenda are approximate, subject to change, and cannot be relied upon to determine at what time the Vail Local Housing Authority will discuss an item. Please call (970) 479-2150 for additional information. Please call 711 for sign language interpretation 48 hours prior to meeting time. Housing Department THE FUTURE OF HOUSING Jason Peasley Yampa Valley Housing Authority A HOUSING CRISIS A BUSINESS PROBLEM A SOLID FOUNDATION Stability ÏAffordability ÏMobility A PIPELINE OF WORKFORCE HOUSING A BIG OPPORTUNITY A COMMUNITY OF SOLUTION Brown Ranch Steering Committee Brown Ranch Focus Teams Housing Demand Infrastructure Urban Design Sustainability and Stewardship Project Economics Stakeholder Engagement Targeted Outreach Political Leadership Business Leadership Proposed Amendments to SDD No. 36, Series 2005, as previously amended by Ordinance No. 20, Series 2005 & Ordinance No. 21, Series of 2017 Four Seasons Resort and Residences Vail February 2022 The purpose of this report is to provide a comprehensive description of amendments proposed to the Four Seasons Resort and Residences Vail (Four Seasons) Special Development District No. 36, as previously amended by Ordinance #20, Series 2005 and as further amended by Ordinance No. 21, Series of 2017. Information provided herein and under separate cover have been prepared in accordance with Section 12-9A-4: Development Review Procedures for Special Development Districts as outlined in the Town of Vail Zoning Regulations. Amendments to SDD #36 are intended to allow for the reconfiguration of the Four Seasons that will include, among other things, replacing underutilized onsite deed-restricted employee housing units with offsite employee housing deed restrictions (as opposed to previously contemplated master leases), reconfiguring the underutilized dorm-style employee housing units into hotel accommodation units and reclassifying certain accommodation units into dwelling units. Proposed amendments will not increase the overall footprint or existing th floor plates of the building; existing covered balconies on the 4 floor will be enclosed as part of the conversion to guestrooms. In addition, there will be minor refinements such as new windows and sidewall flues for new fireplaces (none of these improvements would require amendments to the existing SDD). This application is submitted on behalf of Ex Vail LLC (Ex Vail), an affiliate of Extell Development Company. Ex Vail acquired the property in November of 2016. Property acquired and still owned by Ex Vail includes the hotel and all resort amenity areas (spa, conference facilities, restaurant/lounge, etc.). Twenty-eight sold to other parties. These sold units are not a part of this SDD amendment. Ex Vail fully recognizes the housing mitigation requirement it inherited when it acquired the property. Our proposal in no way is seeking to diminish that requirement. In fact, our proposal is driven by a desire to find real solutions to correct prior flaws and to meet the demands of our valued year-round employees - in other words, Ex Vail needs this housing - and it meets the needs of the Town of Vails housing goals and identified solutions. What was approved in 2003 would likely not be approved today; we are appreciative of the SDD amendment process allowing the ideas in our proposal to come forward to prove how we meet criteria and goals - again, in other words, we think what we are proposing today, knowing what we know now, would have been the preferred employee housing solution and approved in 2003 in lieu of the housing approach that was actually approved nearly 20 years ago. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 1 Information provided below includes: 1. Background on the Four Seasons Resort and Residences Vail 2. cape 3. Property 4. Proposed SDD amendments 5. SDD Review Criteria Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 2 Background on Four Seasons Resort and Residences Vail A Holiday Inn hotel and gas station existed on the subject site prior to the Town of Vail granting approvals for the redevelopment of the property. The Holiday Inn included 120 hotel rooms nt of meeting space and other accessory uses. The property was previously zoned Public Accommodation (PA) and with the SDD approval the underlying zoning of the property remains PA. Development approvals for the Four Seasons were originally established by Ordinance #14, Series 2001. Ordinance #14 established SDD No. 36 that allowed for the development of the following: 116 15 40 Retail, restaurant, conference and health club/spa space, and 4,971sf of employee housing Ordinance #9, Series 2003 amended SDD No. 36 and allowed for the development of the following: Retail, restaurant, conference and health club/spa space, and 34 employee housing units Ordinance #20, Series 2005 amended SDD No. 36 and allowed for the development of the following: Retail, restaurant, conference facilities and health club/spa space, and 28 employee housing units The approved plans for the original owner/developer and the 28 employee housing units were configured and approved as double-occupancy, dorm room-style rooms that are approximately 182 usable square feet each (excluding hallway, closets, cabinets and bathrooms) and share a bathroom with the adjacent dorm room; these were placed on the western side of the building with only external access into each dorm room. They are recessed into the building with a ~6 foot overhang from the above floor; accordingly, they receive little natural light, which is further restricted by the small 3 foot wide window and the solid steel entry door. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 3 Construction of the project began in 2006 and after resolution of many issues during the construction process the Four Seasons opened in December of 2010. Barclays Bank, lender on the project, assumed ownership of the property from the original developers in 2009. Ex Vail acquired the property in November of 2016. Four Seasons Hotels has an 80-year agreement with Ex Vail to manage the hotel. At the time of which nearly 70% of the FFU remained unsold after six years of the resort being open. In addition, given the decade-long development/construction process that took place from the 2001 SDD approval to the resort opening in 2010, the luxury lodging industry changed d related residential uses were obsolete the day the hotel opened. collaborative efforts with the Town of Vail to amend permitted on the property. Ordinance #21, Series 2017 amended SDD No. 36 and allowed for a maximum density of: Retail, restaurant, conference facilities and health club/spa space, and 28 employee housing units In addition, the 2017 amendment resulted in Ex Vail (i) funding an offsite deed restriction on an 874 sf two-bedroom unit and (ii) purchasing and deed restricting a 1,221 sf three-bedroom unit. t that intrigued residential 2021 and 11 of them joined a rental program that keeps the units available as hotel inventory through Four Seasons. In addition, those s comprehensive renovation was completed in two phasesphase I in 2019 and phase II in 2021. Over the course of the 20 years between the initial SDD approval and now, Vail has transformed as a destination. Vail is no longer just a ski destination; in addition to very strong Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 4 summer tourism, Vail now receives significant shoulder season tourism as well. According to DestiMetrics, July occupancy grew from 54% in 2007 to up to 71% in 2017 (albeit, with additional hotel supply during that time, including the Four Seasons). May saw growth from 19% to 25% over that time, and September grew from 43% to 51%. Meanwhile, winter occupancy actually fell from 60% in 2006/2007 to 51% in 2017/2018. This change has also resulted in a significant increase in average nightly room rate; July rates grew 65% between 2008 and 2017. With this increase in rates (particularly for a hotel provider such as Four Seasons), the customer expectations for amenities offered, level of service and consistency of product increases significantly as well. As a result of this changing landscape, Vail has become a year-round destination and the services/product provided throughout the entirety of the year lend themselves to year-round employees, including those seeking to reside in Eagle County on a long-term basis. It is no longer feasible to staff and run a luxury hotel with predominantly seasonal visa workers. In 1 2018, we employed 333 employees for some period of time; of that amount, 15% of the employees were visa employees. Of the visa employees, 25 of them worked at the property for less than 4 months before departing. Conversely, (i) we hired 112 new non-visa employees in 2018, which subsequently remained employed at the property for an average of 1.2 years, and (ii) we had 146 non-Visa employees that were hired at some point prior to 2018, worked at the resort during 2018 and ultimately had an average length of employment of 3.5 years. From 2017 through 2019, we typically had about 16 to 24 visa employees working onsite at the same time; over that time the visa employees only satisfied about 8% of our workforce assuming they worked full time. The workforce at this point is very heavily skewed towards Eagle County residents that intend to work for a preeminent multinational employer like Four Seasons for several consecutive years. Prior to 2019 and throughout the global pandemic impacts of the past two years, Extell has been closely evaluating the for strong demand in the coming years, we need to maintain a consistent and well-trained work force. As widely known at this point, the pandemic severely constrained visa work programs and the labor market has seen substantial shortages in most U.S. markets. While employer-provided housing should be a tool to attract talent to a remote resort town like Vail, and as originally and creatively conceived in 2001 that fulfilling the employee housing requirement entirely onsite would be not only an employee draw but a public benefit as well, 1 This includes all employees that received a paycheck at some point during 2019; this includes employee turnover, as the business does not simultaneously employ that many people. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 5 we have found the utilization of our onsite housing to be ƌĻƭƭ ƷŷğƓ ЍЎ ƦĻƩĭĻƓƷ most years since we acquired the Resort due to the changing trends described above. Accordingly, to better -pandemic employee housing goals, we need to prioritize a reimagined employee housing program for the Four Seasons Vail. Securing affordable and stable housing for our employees is the greatest challenge facing the Resort today. In other words, we want to secure off-site deed-restricted employee housing units that we know will be utilized. Extell and our redevelopment team have created a revised housing program that we believe aligns with community housing goals and is in compliance with Vail policy. Moreover, we believe this is a win for all three stakeholders (i) the new program will increase employee and stable housing product, and (iii) Four Seasons should see less employee turnover due to housing challenges and our business should have greater ability to attract new employees to the valley. While we could continue operating the hotel as we are today, we want to implement solutions so that not only are we meeting our 56-bed SDD requirement, but we are actually housing employees and not leaving dozens of empty and underutilized employee beds. Peak occupancy in 2019 was 37 tenants; 2018 was 32; 2017 was 38; and 2016 was 30. See attached Exhibit A showing historical utilization. The onsite housing product is very heavily skewed towards temporary accommodations for temporary visa workers notwithstanding that they are only a very small portion of our workforce. The remainder of our 200+ employees have foregone the onsite dorm rooms and instead have elected to find their own offsite market rate housing; the feedback from these employees on our dorm rooms is: - A lack of kitchen facilities requires all meals to occur via our employee cafeteria. - There are no living rooms or adequate space for lounge furniture; a twin-size bed has to serve multiple purposes throughout the day. - Shared bathrooms and layouts are not conducive to couples or families. - Living where they work causes uneasiness about a lack of separation between work and personal lives. Thus, the units do not offer long-term housing to help retain talented employees, nor do they address housing needs of Colorado residents looking to work and raise a family in the Vail does not allow for the flexibility to assist other employers by renting to non-Four Seasons employees. Meanwhile, we have heard from employees living in their own offsite housing that they have Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 6 tremendous uncertainty on future rent increases and that many landlords are only offering them leases on short- or month-to-month terms; upon a sale or a changing view of their landlord, they are forced to pack their belongings and move again. This ultimately creates friction that in many instances results in them terminating their employment and leaving the region. Proposed SDD Amendments While we explored design ideas to renovate some of the onsite units to resolve the above- mentioned challenges, the existing site conditions (the dorm rooms are sandwiched between an HOA-owned hallway and a single exterior wall) prevented us from creating bedrooms and living rooms that would comply with building code regulations for light and air in occupied spaces. Accordingly, any attempt to create living rooms or larger bedrooms would result in a substantial reduction in the quantity of dorm/bedrooms; we did not feel it was in the spirit of the quantity of employee housing beds. Moreover, several of the challenges mentioned above would have remained. We are proposing to use Off-Site Mitigation to satisfy up to and including 32 of the 56 employees by: 1. Recording with the Eagle County Clerk and Recorder a Town of Vail employee housing deed restriction on dwelling unit(s) located within the Mitigation Region (including but not limited to Vail, Eagle-Vail, Avon and Edwards). Any such deed restriction(s) shall immediately and permanently reduce the on-site dormitory requirement at a 1:1 bedroom ratio. For example, leasing an off-site three-bedroom dwelling would immediately reduce the onsite requirement by three dormitory rooms. We intend to initially approach employees that already own a home within the Mitigation Region; in exchange for the deed restriction, they would receive enhanced financial stability while ensuring the Town another desirable home reserved for employee use in perpetuity. In addition, we think that the deed restriction payment may help some employees migrate from renters to acquiring their own home. In addition to procuring deed restrictions from employees, we may need to procure some deed restrictions from third parties; during that process we expect that the property owner would offer us priority access to rent the deed restricted dwelling. We would in turn then sublet such dwelling(s) to employees; this would afford them (i) certainty with respect to the stability of their housing, (ii) significantly larger and more desirable housing, and (iii) flexibility for couples and families to have housing that aligns with their needs. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 7 2 Ultimately, this mechanism will significantly upgrade the housing from small 294 square foot deed restricted dorm rooms to deed restricted homes/condos/townhouses. The upgraded housing will have living rooms, kitchens and other aspects customary to homes, so the total deed restricted square footage per bedroom should increase from the 294 square feet we have today to ~397 square feet assuming we are able to deed restrict a combination of ~788 square foot two-bedroom dwellings and ~1,200 square foot three-bedroom dwellings. Similar to the 2017 amendment, the luxury hotel market and consumer demand has continued to migrate further towards hotel run rental programs and some of the remaining large hotel suites continue to be a drain on the overall performance of the property. In addition, much like the 2017 amendment created the economic engine to finance the cost of all the other changes, converting a few underperforming hotel rooms to four new condominium units would generate the proceeds to (i) acquire the offsite deed restrictions contemplated above and (ii) convert the vacant and underutilized dorm rooms into hotel rooms to be occupied year-round and generating additional hotel occupancy tax. See the included floor plans marked to show the specific locations and sizes of the converted hotel rooms. As we offset the onsite dorm rooms with the Off-Site Mitigation, we intend to renovate, reconfigure and repurpose the area into new hotel guestrooms. The fundamental objective of these amendments is to improve the employee housing situation at large and Four Seasons as employer. Between 2016 and 2018, on average housing for 30 people has sat vacant while meanwhile our employees instead chose to pursue more desirable housing elsewhere in the Vail Valley; this in turn is putting further upward pressure on the overall rents within the region and Four Seasons employees are taking housing away from the rest of the community. Ultimately, the employee housing product that was contemplated and approved 20 years ago has been deemed undesirable by most of our employees in recent years notwithstanding that their cost would be less than $600/month (including all utilities and meals) and that we have not increased the cost in over 5 years. Amendments proposed to SDD No. 36 will allow for Off-Site Mitigation, as detailed herein and as proposed on the redlined ordinance, as well as and that are currently permitted on the property. These changes and zoning considerations are addressed below. As the enclosed balconies were part of the original construction, relevant zoning considerations are limited to parking and employee housing. An overview of how these amendments will benefit not just Ex Vail, but also the broader community is provided below. 2 The total dorm room area is comprised of: (i) approximately 182 sf of bedroom/living area, (ii) 35 sf of hallway/circulation space, (iii) 20 sf of closets, (iv) 15 sf of cabinets, and (v) 50% of an 83 sf bathroom shared with the adjacent double occupancy dorm room. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 8 APPROACH TO PROJECT The Four Seasons has been in operation for 11 years and has offered dorm rooms to employees during that time and were Ex Vail to make no changes to the property the hotel can continue to check the box on its SDD employee housing requirement and likely continue to operate for another eleven years and beyond with 50% or more of the employee beds remaining empty month in and month out. However, to make no changes would do nothing to improve the rental market. This would continue to cause further issues for employees in the region and likely continue to cause employees and community residents to ultimately leave the region for other communities with more affordable housing. In essence, the changes below reflect what would be done differently (working within the physical limitations of the existing building) if the market: Off-site deed restrictions Allowing the employee housing obligation for up to 32 of the 56 employees to be met with off- site deed restrictions will result in an improved deed restricted housing product compared to onsite undesirable dorm rooms. Two- and three-bedroom dwellings would allow for flexibility for families or roommates; the dwellings would also contain approximately 35% more livable space per employee and offer housing amenities that are expected by most contemporary employeesincluding living rooms and kitchens. These would ultimately result in 16 new deed restricted bedrooms for the community in perpetuity. This housing would be desirable for the 92% of our employees that are not temporarily in Vail on a visa program. Reclassify seven hotel rooms Since our amendment in 2017, demand for residential for-sale product and hotel run rental programs for such units has continued to grow. For the 2019/2020 ski season, we found residential rental demand to be 39% greater than its demand for the 2017/2018 ski season, but typical hotel guestrooms were only 6% higher over that same period of time. Moreover, the pandemic has increased consumer focus on vacation product that offers an enhanced element of safety, which hotel run rental units offer. Based upon our prior sales, we expect near 100% participation in the rental program . The reclassification to for sale condominiums can provide the economic engine to fund the deed restrictions and guestroom conversions. As several competing destinations have all recently announced major new developments from luxury operators (Montage Big Sky, Four Seasons Telluride and the Mayflower development in Deer Valley), the market continues to evolve, consumer tastes continue to gravitate to residential rental product and ultimately Vail needs to adapt to the ever-changing market to remain the premiere North America destination. Re-purpose unused dorm rooms Once replaced with off-site deed restricted housing, the underutilized dorm rooms shall be converted to additional hotel guestrooms. As previously detailed in 2017, t entry level (non-suites) rooms have historically been the best performing rooms and while there is some seasonal variation these rooms perform well throughout the year. Re-purposing the empty dorm rooms into hotel rooms will offset the larger inefficient hotel rooms that were Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 9 rooms from the quantity that exists today (117) will generate additional business throughout the year, which will benefit the community as a whole with increased occupancy taxes and increased restaurant and retail business for other business owners in the community. In addition, these new rooms will be particularly appealing during the shoulder and summer seasons, which will continue to provide full time employment to employees instead of the highly seasonal and predominantly ski season focused experiences of past. PROJECT AND DESIGN PARAMETERS Given the objectives above, Ex Vail spent many months studying the existing facility to define a plan that would most efficiently and effectively implement these changes. Considerations, or parameters listed below influenced final renovation plans that are reflected by this SDD Amendment. These included: Carrying capacity of hotel amenities Maintaining the appropriate balance between the number of hotel guests and hotel amenities is critical, particularly at a high-end resort hotel. The Four Seasons common areas and amenities (lobby space, restaurants and bars, spa and health club, conference facilities, pool, etc.) all have a finite capacity. These amenities were originally sized for the current hotel and in most cases, it is not feasible to increase the size of these facilities. As such, existing common areas and amenities establish a limitation of sorts on the type and extent of changes to the overall unit mix. Layout of the existing building/code requirements As a renovation, the design of the existing building directly affects where changes can be made and the nature of changes that may be feasible. An example of this is the limitations created by existing hallways. In most cases hallways cannot be changed and they relate directly to each building code egress requirements. In many cases options for unit conversions were directly impacted by such considerations. Unit locations and views History has shown the quality of views from hotel rooms does not directly impact guest revenue (while a mountain view room rents for more than a room with a highway view, a good mountain view room does not rent for more than a great mountain view room). The opposite is true of for-sale real estate. View considerations were a factor in determining the location of new for-sale units and new hotel rooms. Parking The existing parking structure cannot be expanded. As such, parking requirements are a significant consideration in the type of changes proposed to the properties overall unit mix. Four Seasons standards Four Seasons Hotels have explicit standards for the size, quality and features of their hotel rooms. These standards directly influenced decisions on where new or renovated hotel rooms Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 10 could be created. Cost and efficiency The costs necessary to complete renovations along with projected returns were considered in making final decisions on future improvements. PROPOSED CHANGES TO UNIT MIX Ordinance #21, Series 2017 amended SDD No. 36 and allowed for the following maximum density: Retail, restaurant, conference facilities and health club/spa space, and 28 employee housing units Proposed amendments to SDD No. 36 would result in the following: 123 32 Retail, restaurant, conference facilities and health club/spa space, and 28 employee housing units (but up to 16 of these can be satisfied with Off-Site Mitigation) A floor-by-floor comparison of existing units and proposed unit changes has been provided under separate cover. Below is a summary of how the proposed unit mix will be accomplished: thth The 13 dorm rooms on the 4 floor and the three dorm rooms on the 7 floor will be -site deed restrictions will be in place before a Re-classification of two large suites to two These hotel suites range in size from 1,700sf to 3,500sf. The suites do not perform well outside of peak ski season due to their size; demand for a 4-bedroom hotel suite is limited to peak periods. These suites already have full kitchens, which is also atypical for hotel suites, so . The sale of these units will provide some of the capital necessary to purchase off-site deed restrictions and create the new hotel rooms. Re-classification of four hotel rooms to two These hotel rooms consist of (i) three suites range in size from 825sf to 1,100sf, and (ii) an adjacent connecting room. The suites are awkwardly shaped due to their location in the Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 11 building; however, if they are merged together and reconfigured as two separate DUs, they can be more appropriately shaped by incorporating some of the hallway that is currently required by their classifications as four separate hotel rooms. The sale of these units would also provide some of the capital necessary to purchase off-site deed restrictions and create the new hotel rooms. The accounting office can be consolidated with other departments/offices throughout the change does not require an SDD amendment; however, the construction work is intended to occur at the same time as the above changes. ZONING CONSIDERATIONS Proposed amendments will not materially increase the square footage of the building nor materially affect the exterior of the building. The overall footprint and existing floor plates/envelope of the building will remain as is; existing covered balconies on the 4th floor will be enclosed as part of the conversion to guestrooms. As such, the only relevant zoning considerations are parking and employee housing. Parking The 2017 amendment to SDD No. 36 establishes the parking requirement for the Four Seasons to be 230 spaces. The existing SDD also acknowledges that the hotel is managed by 24/7 concierge services which includes valet spaces. Below is a summary of the new parking demand from the proposed amendments: Four Seasons SDD Amendment Parking Analysis 2/3/2022 Current Parking Req. Net Parking 2017 SDD 2017 Parking Current Condition Proposed For Proposed Compared to 2017 Land UseAmendmentReq.ConditionParking Req.ConditionConditionAmendment AUs13091.011781.912386.1-4.9 DUs2839.22839.23244.85.6 FFUs64.264.264.20 Lockoffs1812.61510.51510.5-2.1 147.0135.8145.6 New Parking Req.-1.4 Based on the matrix above the proposed amendments will not increase the number of required parking spaces. Employee Housing The Four Seasons was developed prior to the Town codifying employee housing requirements. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 12 Notwithstanding the fact that there was no formal employee housing requirement at that time, in accordance with SDD No. 36 the project includes 28 on-site employee housing units. These units were approved as dormitory style and allowed to provide housing for two people. re- developments as follows: Inclusionary Zoning Employee housing need only be provided for the increase in the GRFA of a redevelopment; provided however, that if any existing EHUs are to be removed, an equal amount of EHUs shall be replaced in addition to other requirements of this chapter. Commercial Linkage Employee housing impacts need only be mitigated for a redevelopment that results in a greater number of employees generated from an increase in net floor area, or an increase in the number of accommodation units or in net floor area, or an increase in the number of accommodation units or limited service lodge units in the redevelopment; provided however, that if any existing EHUs are to be removed, an equal amount of EHUs shall be replaced in addition to the other requirements of this chapter. Below are the three proposed changes and how they affect employee generation: Conversion of 2 hotel suites to 2 Condominiums this change increases GRFA and it ķĻĭƩĻğƭĻƭ the number of ; given the relatively larger in question, this conversion slightly źƓĭƩĻğƭĻƭ the employee generation rate. Conversion of 5 hotel rooms to 2 Condominiums this change increases GRFA and it ķĻĭƩĻğƭĻƭ the number of conversion slightly ķĻĭƩĻğƭĻƭ the employee generation rate. AU Changes in the 2017 Amendment, Ex Vail was approved for a maximum density of additional offsite deed restrictions at the time to offset the incremental employees 3 Amendment. Ex Vail is now proposing to ƩĻķǒĭĻ this permitted density to 123 orm rooms), as such the changes ƩĻķǒĭĻƭ the employee generation rate. A summation of the changes is set forth below: 3 underutilized dorm rooms and the accounting office. Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 13 Four Seasons SDD Amendment Employee Generation Analysis 2/3/2022 Current Condition Proposed Condition Net Employee 2017 SDD 2017 Employee Current Employee Proposed Employee Generation Compared Land UseAmendmentGenerationConditionGenerationConditionGenerationto 2017 Amendment AUs13078.011770.212373.8-4.2 DUs (sf)86,37734.689,17435.799,77939.95.4 FFUs (sf)14,6595.915,7866.315,7866.30.5 Lockoffs180.0150.0150.00.0 118.4112.2120.0 New Employee Generation1.6 BENEFITS FROM PROPOSED AMENDMENTS Ex fundamental goal with this amendment is to correct and/or improve upon the assumptions from 20 years ago in which the idea of employees living onsite was ultimately much better received in theory than in practice. For 10+ years, the Resort has checked the box owever, that housing was predominately empty due to most employees having no desire to live in onsite dorm rooms and Vail as a destination growing to a point that staffing largely with visa employees is not a viable business model. Much like Vail has evolved as a community since 2001, Ex Vail aims to reinvent the antiquated employee housing with the assistance and cooperation of PEC and Town Council. Once the employee housing is addressed, converting the dorm rooms to hotel rooms will improve financial performance and in doing so create a viable resort property that is sustainable over the long-term. An underlying premise of this effort is that improvements which benefit Ex Vail and the Four Seasons will also benefit the Town of Vail through utilized employee housing units created by Ex Vail; increased occupancy at Four Seasons; increased sales tax revenue; and increased RETT revenues. STANDARDS FOR EVALUATION OF PROPOSED AMENDMENTS Nine criteria prescribed by the SDD section of the zoning code will be used to review these proposed amendments and criteria that we are showing we meet. These criteria are geared primarily towards the design of a project and they focus on topics such as compatibility with the neighborhood, building scale and massing, architecture, landscape design, density, etc. Proposed amendments are exclusive to changing the existing mix of units and increasing employee housing utilization and SDD criteria provide little guidance or direction with respect to how to determine the appropriate mix of units for a property such as this. SDD Review Criteria The SDD chapter of the Town Zoning Code prescribed nine criteria to be used to evaluate the merits of a proposed Special Development District. The SDD sections states: The following design criteria shall be used as the principal criteria in evaluating the merits of the proposed Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 14 special development district. It shall be the burden of the applicant to demonstrate that submittal material and the proposed development plan comply with each of the following standards, or demonstrate that one or more of them is not applicable, or that a practical solution consistent with the public interest has been achieved. These criteria and response to each are outlined below. 1. Compatibility: Design compatibility and sensitivity to the immediate environment, neighborhood and adjacent properties relative to architectural design, scale, bulk, building height, buffer zones, identity, character, visual integrity and orientation. wĻƭƦƚƓƭĻʹ ŷĻƩĻ ğƩĻ Ɠƚ ĭŷğƓŭĻƭ ƦƩƚƦƚƭĻķ Ʒƚ ƷŷĻ ƦƩƚƦĻƩƷǤ ƷŷğƷ Ǟƚǒƌķ ŷğǝĻ ğƓǤ ĻŅŅĻĭƷ ƚƓ ƷŷĻ ĭƚƓƭźķĻƩğƷźƚƓƭ ƚǒƷƌźƓĻķ ğĬƚǝĻ͵ 2. Relationship: Uses, activity and density which provide a compatible, efficient and workable relationship with surrounding uses and activity. wĻƭƦƚƓƭĻʹ ŷĻƩĻ ğƩĻ Ɠƚ ƓĻǞ ǒƭĻƭ ƦƩƚƦƚƭĻķ ĬǤ ƷŷĻƭĻ ğƒĻƓķƒĻƓƷƭ͵ ‘ŷźƌĻ ĭŷğƓŭĻƭ ğƩĻ ƦƩƚƦƚƭĻķ Ʒƚ ƷŷĻ ƒźǣ ƚŅ ǒƓźƷƭͲ ƷŷĻƩĻ źƭ ƓƚƷ ğ ƭźŭƓźŅźĭğƓƷ ĭŷğƓŭĻ Ʒƚ ķĻƓƭźƷǤ ƚƩ ƷŷĻ źƓƷĻƓƭźƷǤ ƚŅ ķĻǝĻƌƚƦƒĻƓƷ ƚƓ ƷŷĻ ƭźƷĻ͵ tƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ ķƚ ƓƚƷ ğŅŅĻĭƷ ƷŷĻ ĭƚƒƦğƷźĬƌĻͲ ǞƚƩƉğĬƌĻ ƩĻƌğƷźƚƓƭŷźƦ ƷŷğƷ ŷğƭ ĬĻĻƓ ĻƭƷğĬƌźƭŷĻķ ĬĻƷǞĻĻƓ ƷŷĻ CƚǒƩ {ĻğƭƚƓƭ ğƓķ ƭǒƩƩƚǒƓķźƓŭ ǒƭĻƭ ğƓķ ğĭƷźǝźƷźĻƭ͵ 3. Parking and Loading: Compliance with parking and loading requirements as outlined in chapter 10 of this title. wĻƭƦƚƓƭĻʹ tƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ ğƩĻ źƓ ĭƚƒƦƌźğƓĭĻ ǞźƷŷ ƦğƩƉźƓŭ ƩĻƨǒźƩĻƒĻƓƷƭ͵ 4. Comprehensive Plan: Conformity with applicable elements of the Vail comprehensive plan, town policies and urban design plans. wĻƭƦƚƓƭĻʹ ǒƓķĻƩǒƷźƌźǩĻķ ƓğƷǒƩĻ ƚŅ źƷƭ ĻƒƦƌƚǤĻĻ ŷƚǒƭźƓŭ ğƓķ Ʒƚ ƩĻƦƌğĭĻ ķƚƩƒ Ʃƚƚƒƭ ǞźƷŷ ƚŅŅΏƭźƷĻ ķĻĻķ ƩĻƭƷƩźĭƷĻķ ķǞĻƌƌźƓŭƭͳ ƒğƉźƓŭ Ʒŷźƭ ĭŷğƓŭĻ Ǟźƌƌ ĻƓƭǒƩĻ ƷŷğƷ ƷŷĻ ķĻĻķ ƩĻƭƷƩźĭƷĻķ ĬĻķƭ ğƩĻ ğĭƷǒğƌƌǤ ƚĭĭǒƦźĻķ ĬǤ ğźƌ ǞƚƩƉŅƚƩĭĻ źƓƭƷĻğķ ƚŅ ƭźƷƷźƓŭ ĻƒƦƷǤ ǤĻğƩ ğŅƷĻƩ ǤĻğƩ ķǒĻ Ʒƚ ğƓ źƌƌΏĭƚƓĭĻźǝĻķ ƷǤƦĻ ƚŅ ŷƚǒƭźƓŭ ƦƩƚķǒĭƷ͵ ƷƚǞƓ ƦƚƌźĭźĻƭ ğƓķ ğķķƩĻƭƭ ŷĻğķ ƚƓ ƚƓĻ ƚŅ ƷŷĻ ŭƩĻğƷĻƭƷ ĭŷğƌƌĻƓŭĻƭ ĭǒƩƩĻƓƷƌǤ ŅğĭźƓŭ ƷŷĻ ƚǞƓ ƚŅ ğźƌ͵ 5. Natural and/or Geologic Hazard: Identification and mitigation of natural and/or geologic hazards that affect the property on which the special development district is proposed. wĻƭƦƚƓƭĻʹ Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 15 ŷźƭ ĭƩźƷĻƩźƚƓ źƭ ƓƚƷ ğƦƦƌźĭğĬƌĻ Ʒƚ ƷŷĻ ƦƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ͵ 6. Design Features: Site plan, building design and location and open space provisions designed to produce a functional development responsive and sensitive to natural features, vegetation and overall aesthetic quality of the community. wĻƭƦƚƓƭĻʹ ŷźƭ ĭƩźƷĻƩźƚƓ źƭ ƓƚƷ ğƦƦƌźĭğĬƌĻ Ʒƚ ƷŷĻ ƦƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ͵ 7. Traffic: A circulation system designed for both vehicles and pedestrians addressing on and off site traffic circulation. wĻƭƦƚƓƭĻʹ ŷĻ ƦƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ Ǟźƌƌ ŷğǝĻ Ɠƚ ğƦƦƩĻĭźğĬƌĻ ĻŅŅĻĭƷ ƚƓ ƷƩğŅŅźĭ ĭƚƓƭźķĻƩğƷźƚƓƭͳ ŭźǝĻƓ ƷŷĻ ƌƚǞ ǒƷźƌźǩğƷźƚƓ ğƓķ ķĻƭźƩğĬźƌźƷǤ ƚŅ ƷŷĻ ƚƓƭźƷĻ ĻƒƦƌƚǤĻĻ ŷƚǒƭźƓŭͲ ƷŷĻ ĻƒƦƌƚǤĻĻƭ ƷŷğƷ ǞĻƩĻ ƭǒƦƦƚƭĻķ Ʒƚ ĬĻ ŷƚǒƭĻķ ƚƓƭźƷĻ ğƩĻ ğƌƩĻğķǤ ĭƚƒƒǒƷźƓŭ Ʒƚ ƷŷĻ ƩĻƭƚƩƷ ŅƩƚƒ ƚŅŅΏ ƭźƷĻ ŷƚǒƭźƓŭ ğƓķ ŷğǝĻ ĬĻĻƓ ķƚźƓŭ ƭƚ ŅƚƩ ЊЉњ ǤĻğƩƭ͵ 8. Landscaping: Functional and aesthetic landscaping and open space in order to optimize and preserve natural features, recreation, views and function. wĻƭƦƚƓƭĻʹ ŷźƭ ĭƩźƷĻƩźƚƓ źƭ ƓƚƷ ğƦƦƌźĭğĬƌĻ Ʒƚ ƷŷĻ ƦƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ͵ В͵ Workable Plan: Phasing plan or subdivision plan that will maintain a workable, functional and efficient relationship throughout the development of the special development district. wĻƭƦƚƓƭĻʹ ŷźƭ ĭƩźƷĻƩźƚƓ źƭ ƓƚƷ ğƦƦƌźĭğĬƌĻ Ʒƚ ƷŷĻ ƦƩƚƦƚƭĻķ ğƒĻƓķƒĻƓƷƭ͵ Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 16 EXHIBIT A Four Seasons Resort and Residences Vail Amendment to SDD No. 36 Page | 17 Exhibit A EXTELL DEVELOPMENT COMPANY 805 THIRD AVENUE, 7TH FLOOR NEW YORK, NY 10012 T. 212 712 6000 F. 212 712 6100 WWW.EXTELL.COM