Homeowners in tussle with nonprofit over development
The brochure touted Palisade’s Wine Valley Estates as “a peach of a place,” a 10-acre subdivision where buyers could build a custom dream home within a few hours of Colorado’s glitziest ski resorts and walking distance of the town’s peach and wine festivals.
Scott and Teresa Wall bought into that hype.
They saved their money, purchased a lot near the entrance to the subdivision and moved into a 2,250-square-foot, two-story, stucco home. They envisioned it as the place where they would raise their four children and as an investment that would eventually catapult them into retirement.
Now they and another family — together they are the only residents of Wine Valley Estates — fear the reasons they moved into their homes could be scuttled, and their property value is at risk.
Housing Resources of Western Colorado, a nonprofit organization that provides affordable housing, now owns the remaining 30 lots after buying them at a bargain-rate price. The group wants to reconfigure the subdivision and add 10 more homes by shrinking the lot sizes and building smaller homes for low- and middle-income buyers as part of its self-help housing program.
“We’re doing everything we can to do a high-quality product in a high-quality subdivision,” Housing Resources Executive Director Dan Whalen said.
But the Walls and the other Wine Valley Estates homeowners, Kevin and Tanya Wold, say it’s naive to believe homes that are expected to sell for half of the value of their homes won’t have an impact on them.
“If they come in and build here, we’re finished,” Scott Wall said. “We’ll lose our investment, and we’ll never recoup it.”
The Walls were the first ones to buy in Wine Valley Estates, an upscale stucco-and-stone development that boasted strict landscaping and architectural guidelines.
All lots were sized at 9,000 to 12,000 square feet. Homes had to be a minimum of 1,500 square feet. The family moved in during November 2008.
“When you put all the money you’ve saved for the last 20 years into a home, you don’t only do that, but you buy into an entire concept of what this was all about,” Teresa Wall said.
The Wolds, seeking to relocate from East Orchard Mesa to Palisade so they and their two children could be closer to schools and the town, weren’t far behind. They closed on their house in December.
But the subdivision’s developer, Tom Geist, fell into financial trouble.
In January 2009, to avoid foreclosure, he sold the 30 remaining lots to Housing Resources for $1.49 million. The sale price of just under $50,000 per lot was $40,000 less than the advertised price of the smallest lot.
Kevin Wold, who moved his family into their 1,740-square-foot home last October, said his Realtor never told him Housing Resources intended to purchase the undeveloped lots. Whalen, however, said Wold signed paperwork indicating the subdivision was in danger of foreclosing, that it was being shopped around, and the covenants could change under a new owner.
Whalen acknowledges the subdivision as it’s designed doesn’t fit the traditional Housing Resources mold. He said the organization tries to build roughly 1,200-square-foot homes on 7,000-square-foot lots for its self-help program, which reduces down payments in exchange for buyers helping build their own homes.
But in order to make that happen with Wine Valley Estates, Housing Resources would have to apply to Palisade to replat the property so it could reduce the size of the lots and increase the total number of homes to 42.
To help the homes blend in with the two existing homes, Whalen said Housing Resources will attempt to create stucco exteriors on all the homes and offer to build 14-foot landscaping strips that would be maintained by the homeowners’ association. He estimated the homes would sell for $200,000.
But that’s about $150,000 less than the value of the Wolds’ home and more than $200,000 less than the Walls’ home. Those families say they can’t imagine a scenario in which the discrepancy in size and price of the homes, combined with the fact the homes are in the same subdivision, doesn’t drag down the value of their homes.
Plus, they say they’re afraid the Housing Resources’ homes could deteriorate over time or become rental properties.
“It’s never been about what’s best for everybody involved,” Teresa Wall said. “It’s only about what works for (Housing Resources).”
The idea of replatting also doesn’t sit well with Palisade Mayor Dave Walker, who called it “an unneeded, unwanted ambush of what was a very well-planned subdivision.”
He questioned the need to build more homes now, noting the recession, the decline in home prices and the glut of homes already on the market.
“That’s prime residential area down there. It’s absolutely beautiful,” he said. “Somebody needs to explain to me why I should be OK with signing over that area to low-income housing. It’s just absolutely the wrong thing for the town of Palisade.”
Whalen said Housing Resources prefers to build new homes rather than purchase old ones because new homes are easier to maintain and retain their value better.
He acknowledged a federal grant that helps subsidize Housing Resources requires the group to build 40 homes in two years.
“You would think the town of Palisade would welcome building and people to shop in their stores and walk downtown to eat in their restaurants,” he said.