The Montrose City Council on Tuesday approved a letter of intent to donate city-owned land in support of an affordable housing project that could receive $750,000 in state funding.
The action allows City Manager Bill Bell to formalize the city’s support for a project led by the Mexican American Development Association (MADA) at the former Kinikin meat processing site.
The Montrose City Council on Tuesday approved a letter of intent to donate city-owned land in support of an affordable housing project that could receive $750,000 in state funding.
The land donation is contingent on MADA receiving final approval through Colorado’s Proposition 123 Affordable Housing Financing Fund.
The proposal combines two city-owned parcels at 931 and 939 North Park Avenue with adjacent private property at 1032 6450 Road, creating a single site for development.
If completed, the project could bring between 58 and 64 housing units along with a childcare component.
State funding
The project has been tentatively awarded $750,000 through the Proposition 123 program and is now moving through a final application process, due later this month.
Under the program, funds can be used to purchase land but not existing structures, and projects must meet development timelines or repay the money.
For Bethany Maher, MADA’s executive director, the potential award marks a major step forward after multiple attempts.
“We got declined the first two times and then got it the third time,” Maher said. “Now our final application is due May 26.”
Why the land matters
The city’s donation plays a key role in making the project viable — if the state funding is finalized.
Under the plan outlined in the letter of intent, the city would donate its two parcels to Kinikin Real Estate LLC, which owns the adjacent property. The parcels would then be combined into a single site and transferred to MADA for development.
Because Proposition 123 funding applies only to land value, not buildings, the existing structure on the Kinikin site — valued at more than $1 million — is not eligible for reimbursement.
By contributing its land, the city would increase the total eligible land value, helping the property owner recover a portion of the site’s value and making the project financially feasible.
“The city’s donation really helps close the deal,” Maher said.
A mixed housing concept
Plans call for a mix of rental and for-sale housing aimed at a range of incomes.
The development would include rental units for households earning roughly 60% to 100% of area median income, along with homes for purchase for those earning between 80% and 120% of AMI.
Units would range from one- to three-bedroom rentals and two- to four-bedroom homes.
Maher said the project is designed to address two persistent community challenges.
“Housing and childcare are a problem,” she said. “This is one of those themes that comes up in everything.”
The childcare component — encouraged under the state program — would be operated by a partner and could be offered at low or no cost.
Despite the name, the state’s land banking program is structured to push projects forward quickly.
Applicants must be ready to build, with requirements to complete planning and zoning within five years and fully fund and permit the project within 10 years.
“It’s a little misleading to call it land banking,” Maher said. “You’re not really sitting on the land — you have to be ready to go.”
If those milestones are not met, the funding must be repaid.
MADA’s role
Maher said MADA is not acting as the developer, but as a facilitator.
The organization is working to assemble land, secure funding and connect partners before selecting a developer to carry out the project.
“We’re not looking to get into things that we aren’t the professionals on,” she said. “We’re looking to help people who need help and solve community problems.”
MADA may retain a stake in certain elements, such as the planned childcare facility, and plans to work with lenders and local partners to help residents access housing opportunities.
What’s next
With the city’s letter of intent approved, MADA will submit its final application to the state later this month.
If selected, the project would move into the development phase, including selecting a development partner and securing additional funding..
“This is a way to make something happen for the community that we know is a need,” she said.
Justin Tubbs is the Montrose Business Times editor. He can be reached by email at justin@montrosebusinesstimes.com or by phone at 970-765-0915 or mobile at 254-246-2260.
