The U.S. Forest Service and Summit County first partnered on a housing project outside Dillon in 2023. Earlier this year, the project stalled as the county parted ways with its developer.

The county leased land at the Dillon Work Center administrative site from the federal agency through a provision in the 2018 Farm Bill, marking one of the first such agreements in the country. The county entered a predevelopment agreement with Servitas, a housing development company, but county manager Dave Rossi said the county was not comfortable with the financing plan Servitas developed.

“Our inside legal team, we worked with outside bond counsel — we reached the conclusion that it didn’t comply with TABOR,” assistant county attorney Andrew Armstrong said, referencing Colorado’s Taxpayer’s Bill of Rights.

Armstrong said the split with Servitas was “mutual.” He said the form of bond financing Servitas proposed is “novel,” and while the developer was confident in it, the county had legal concerns. In parting ways with Servitas, the county paid over $3 million to acquire materials like design plans so it could use the work the developer had done going forward.

Commissioner Tamara Pogue said county staff has continued to work with the Forest Service on the project since the Servitas agreement ended. Rossi said it is not unusual for housing projects to hit roadblocks on the way to completion.

“They die and come back to life several times before Earth is even turned,” Rossi said.

Now, Rossi said, the county may have found “another path.” He said the county is “very close” to signing an agreement with a new developer. That new agreement would feature key differences from the Servitas one to ensure the county is comfortable with the financial details. 

Rossi said the potential agreement would see the project built in phases.

“It would allow us to not only be a little bit more judicious with our funds, but it would also allow us to contemplate the (area median income) mix, contemplate what the market actually needs,” Rossi said.

The Servitas agreement planned for the project to have units between 80% and 120% AMI, according to previous Summit Daily reporting. Rossi said the county may consider having parts of the project take advantage of federal Low-Income Housing Tax Credits, which Pogue said limit AMI to 60% and below, and have other parts be a higher AMI than originally planned.

Rossi said the county and the potential new developer are also looking into using tools like the Colorado Middle-Income Housing Authority, which helps finance housing with 80% to 120% AMI limits, to create housing for people in the project’s original AMI range.

Another potential change to the project comes with the plan for the administration center, which the county’s 50-year lease for the Forest Service land requires the county to build. The center will feature more than just offices, Rossi said, with storage space for fire trucks and other Forest Service equipment.

The estimated cost to build the admin center started around $2 million, Rossi said, but now sits between $10 million and $12 million.

“When you’re looking at a county that’s constrained and a Forest Service that isn’t exactly wealthy either, it creates a number of challenges for us,” Rossi said.

Rossi said the county is talking to Summit Fire & EMS about combining the Forest Service admin site with a fire department work site. He said it would be cheaper for taxpayers and help the county lower the cost of the housing project. The facility would not be on the housing project site, Rossi said.

“It also opens up the opportunity for actually putting more housing on there,” Rossi said. “Which would bring the cost of the project down even further.”

In an email, Summit Fire & EMS public information officer Steve Lipsher provided a statement from the fire department. It stated Summit Fire’s growing Wildland Division needs expanded capital facilities and that the department has been working with the Forest Service on the development of the federal agency’s admin center.

“Summit Fire & EMS would welcome the opportunity to explore the possibility of any collaboration on this shared-use facility that aligns with our efforts to better serve the community and advance our mission,” the statement read.

Servitas designed its plans for the project to be stick-built, which is a traditional construction method. Rossi said the county is looking to convert the plans to a panelized build and has contacted a Denver company that specializes in converting stick-build plans to panelized ones.

“We sent the designs to them and said, ‘Hey, could you make this work?'” Rossi said. “Their answer was, ‘Yeah.'”

Panelized housing involves building parts of a structure, like walls and floors, in a factory and assembling them on a worksite. Interim housing co-director Lina Lesmes said the construction method could make the construction faster and cheaper than if the project were stick-built.

Increasing costs of construction have complicated the project as the county has worked on a financial strategy, Pogue said. In December 2024, Servitas estimated the total cost of the project to be around $56 million, she said, and when the county put out a new request for proposals in March, a bid came back at $84 million.

“You expect the two bids with two (developers) are going to come back with a different number,” Pogue said. “You do not expect that two bids with two (developers) three months apart are going to come back with a $30 million delta.”

Rossi said the county is having conversations with other potential partners for the project, although he could not comment on the discussions in more detail.

“There’s some opportunities for the project to be even more feasible with more partners involved,” Rossi said.

Pogue said the Dillon Work Center used to house some Forest Service employees, and they have been displaced since the site was cleared for the new project. As part of the lease agreement, the housing project will have space for those employees.

“We’re not giving up on them,” Pogue said.

The commissioners heard a presentation from the county housing department during a Nov. 18 work session about the department’s 2026 draft budget. The department looks to allocate $1.7 million for the Forest Service housing project in 2026 and earmark $1.3 million for the project in 2027.