Should Breckenridge exempt small businesses from its workforce housing needs? Officials are divided as homeowners share concerns.

With new updated statistics on its workforce, Breckenridge is refining its policy requiring certain companies to provide workforce housingbut officials are divided on how the small business mandate should work.

Like mountain towns throughout the Colorado High Country They are looking for ways to provide housing that their workers can afford.many have assumed similar requirements. Aspen and Telluride have similar policies, but require more from new businesses to help contribute to their affordable housing stock than Breckenridge. Other cities, like Vail, require less than Breckenridge.

The Breckenridge policy, known as 24A, requires two different types of startups to provide housing for a certain percentage of their staff. The requirements were implemented in 2020.

The first type of new businesses subject to the policy are those that add a new building or storefront to the city. The other businesses subject to the policy are those moving into existing spaces that would increase the intensity of operations. For example, it would apply to a coffee shop that moves into a store that used to be a clothing store. The Breckenridge code considers food and beverage outlets to have more “busy” operations than retail outlets.

The Breckenridge City Council has long toyed with the idea of ​​exempting small businesses from this policy, and after learning more about the implications of the requirements at a meeting on Oct. 22, the council had different opinions on what to do. should do in the future.

The city requires these companies to provide affordable housing for 35% of the staff it will add to the workforce and uses a nuanced formula to determine what a company’s contribution to the community should be.

Because the city takes numerous factors into account when quantifying how many employees a business generates, it often sticks with a number that includes a decimal. For example, a small commercial space of around 1,000 square feet is estimated to generate 2.4 employees.

The requirement to provide workforce housing can be met by constructing new units, purchasing existing units and imposing a deed restriction on them, or paying a workforce housing fee in certain cases.

Small businesses with few employees generally pay the fee instead of meeting the other requirements. An example was provided to the council at the October 22 meeting that demonstrated that a small business falling into the fast food/counter service category and introducing 0.9 employees to the workforce would be affected by a fee of approximately $31,300.

Council members previously expressed concern that this would deter small businesses from coming to Breckenridge, especially since businesses have expressed concerns to the city about what they see as high fees related to parking and water use.

Council member Todd Rankin has expressed on numerous occasions that he fears this policy could stifle small businesses and wondered if there was a different way to comply with this requirement.

“In my personal opinion, we are approaching it in the wrong way,” he said.

Regarding the fee-in-lieu strategy that a small business has to bring to the table, he said the city needs “many more dollars than this is going to generate” to provide an adequate inventory of workforce housing.

He asked staff members if it was possible to use a measure like the amount of business a given location is estimated to bring to the city instead of basing it on employee generation. He said he was thinking in particular about businesses adjacent to the tourism industry.

Council members contemplated how places like Helly Hansen USA and The North Face may not introduce many new employees to the community, but given their popularity, they arguably generate a decent amount of revenue. They discussed how stores like these are branches of larger corporations and have more means than a small business owner would have.

Small business owners agreed with Rankin’s sentiment and said that if they were subject to this policy, it would have made it more difficult to bring a new business to Breckenridge and may have discouraged them from doing so. Anna Higgins opened her Higgles Ice Cream store in 2017, three years before 24A went into effect. The store Higgins moved into was previously a retail store, so he was increasing the intensity of operations in the store by introducing food.

Higgins said the fees related to parking and water use were already enough of a burden, and having to pay this fee could have “put her out of business.”

Council members Carol Saade and Marika Page brought up ideas on how to give owners a break and make an employee “free.” That is, if the city found that a business generated 4.8 employees, the city would only require the business to provide housing for 35% of the 3.8 employees instead of 4.8. This would end up exempting small businesses with one employee from the policy.

Mayor Kelly Owens asked city staff if some type of small business loan program could be implemented.

Assistant Director of Community Development Julia Puster said that could be difficult from an administrative standpoint, but it could be done.

Councilman Dick Carleton said if the city grants certain business exemptions, it can become “really problematic” because officials have to determine where they draw the line on a case-by-case basis.

Mayor Kelly Owens said the discussion and concerns about cracking down on small businesses may be a conversation that needs to be had outside the lens of the city’s 24A policy.

City Manager Shannn Haynes agreed, saying the issue could better fit into a broader conversation about economic development in Breckenridge.

A business that recently had to comply with this policy was Breckenridge Grand Vacationswho recently received approval for a plan for a seven-parcel development which features a variety of house types and housing units and a new hotel. Breckenridge Grand Vacations provided 92 workforce housing units in this plan even though it was only responsible for providing housing for 40 employees per city policy.

No decisions were made at the Oct. 22 meeting.