Durango City Council hopes to make a decision Tuesday evening about a contract to purchase the Best Western Inn and Suites at 21382 U.S. Highway 160 for the purpose of creating affordable and transitional housing.

“There’s a need in our community for affordable housing as housing prices keep going up,” said Nicol Killian, assistant director of community development for the city of Durango. “This is just a piece of the puzzle. There are so many things that the city can do through different codes and things to allow for different types of housing.”

City Council met in executive session at its Aug. 3 meeting to discuss the purchase of the Best Western. According to notes from the meeting, the council voted unanimously after the closed-door meeting in favor of moving forward with approving a contract to purchase the hotel for affordable housing.

“As part of our affordable housing crisis, the city has been looking at ways to participate in finding housing, whether it’s transitional housing or affordable,” Killian said. “Hotel conversion is an easy way to take an existing building and convert it without having to build a whole new structure.”

Mayor Kim Baxter said what sets Durango apart from other cities dealing with the affordable housing is that Durango is working to preserve its character.

“The community has coalesced around the concept that if we want to maintain the character that Durango has, that we all love so much, we need to have a community where people can afford to live,” Baxter said. “One of the things that makes Durango unique when we talk about housing challenges, is that when you compare us to Telluride, Aspen, Vail or any of those resort communities, they no longer need housing to keep their character. Those towns need housing to have employees to work in their businesses. Durango still has a chance to use housing to keep our character.”

Killian said the city will be working with its partners in the county and with local nonprofits to determine the optimal way to use the potential space.

“We’re sort of the conduit,” Killian said. “We’re the ones who can secure the property, and we’re the ones who can apply for federal funding. So we're really the conduit to bring in more affordable housing, but it doesn’t necessarily mean we’re going to own it in the future. ... At some point, the building would be transferred over to a nonprofit or a developer. Somebody who could run affordable or transitional housing for the community.”

In total, the Best Western Inn and Suites is a 62-acre piece of property along Highway 160 in west Durango, and is on the market for $7 million. The proposed contract contains a 1% earnest money payment of $70,000, which would come out of the city’s general fund.

If the council moves forward with the purchase contract, the city will have 90 days from the time of purchase to request a quote from a development partner, work with a development partner to determine appropriate use of the property, secure funding and perform any other due diligence that the city deems appropriate.

After the 90-day evaluation of the property, if the building is determined not to be suitable for the city’s intended purposes or funding can’t be secured, then the contract can be terminated and the city will receive all its earnest money back. The seller hopes to close the sale of the building by Jan. 4.

“The city isn’t a developer, so we’re going to be doing a request for qualification to find a development partner that can take us to the next level in terms of what’s needed in our housing market, and what the hotel can become for the community,” Killian said.

There are 71 units in the hotel that could be used for housing, with a 62,000-square-foot adjacent restaurant building. The property is zoned for 5.3 acres of “commercial general,” with an additional 56.6 acres of “rural agricultural” land. There are some constraints to the rural agricultural acres, because of hillsides and slopes.

City staff members submitted a request in June to the offices of both U.S Sens. Micheal Bennet and John Hickenlooper to apply for congressional directed funding for a hotel conversion project. The request was for $9,607,500 to be used for an affordable and transitional housing project.

Both senators support the project and have moved the request to the Senate Appropriation Subcommittee. The Senate Transportation, Housing and Urban Development, and Related Agencies Appropriation Subcommittee will review the request this fall while working on its annual spending bill.

“We did apply for some congressional funding that we hope to hear back on in September, '' Killian said.

njohnson@durangoherald.com