A Developing Optimism
Could Mammoth see a new wave of construction this year?
While the election of President Donald Trump has been polarizing on many levels, the Trump presidency has certainly fostered economic optimism as reflected by the “Trump bump” in the stock market and the optimism expressed by property developers locally.
The terrific snow year has only added to that sense of optimism.
As Chuck Lande, CEO of the Chadmar Group, the developer of Snowcreek, told The Sheet recently, “Mammoth Lakes is the best [development] opportunity in the country. There’s so much potential.”
Lande said his group is going full-speed ahead. He is permitted to build 104 more units at Creekhouse, and said, “We will go as fast as the market dictates.” He said as many as 30 to 40 units could be built this year. And the demand is there. “We pre-sold two buildings, or five of seven units, in about two weeks,” said Lande.
He describes them as “3-to 4-bedroom units with spectacular views from the knoll … It’s not about the last nickel,” he added. “It’s about quality at a fair price.”
He said he is also working on the hotel component, citing increased opportunity in the high-end hotel market. “We feel a 4-star, 5-star property will do extremely well [here],” he said.
On this point, Jim Demetriades, owner of the Sierra Nevada Resort, concurred. “The Village at Mammoth has been rocking,” said Demetriades. “It shows us there’s a higher-end market out there, at least relative to a lot of the ‘70s and ‘80s product [in the Mammoth market].”
Demetriades said he is “absolutely full-speed ahead” in pursuing a development agreement with the Town of Mammoth Lakes (which he envisions coming forward to Mammoth’s Planning Commission in the next few months) and shopping for financing.
Demetriades, who also owns the very successful Landing Resort and Spa in South Lake Tahoe, plans to put $50 million of his own money into what he anticipates being a $250 million project with 650 rooms, 15,000-square feet of convention space, a 7,000-square foot spa and underground parking.
Demetriades said the Town’s more welcoming attitude towards development, the promise of downtown revitalization and the proposed airport terminal expansion are also reason for his optimism.
“We want to be the cornerstone of a new downtown,” he said.
Another potential cornerstone of a new “downtown” could be the Shady Rest tract.
The 25-acre parcel located behind Center Street is currently zoned for affordable housing and has been championed by a succession of ownership groups for some type of mixed-use development.
Opponents have always said that the land is zoned affordable housing, owners/buyers of the property have always known exactly what they can do with it, and are generally not open to any type of deal-making.
And this is exactly why the Master Plan has failed for the past 25 years, says Mark Carney, attorney for the Shady Rest ownership group.
As Carney says, every affordable unit built requires a developer subsidy, generally of $50,000 to $100,000 per unit. Why would anyone develop 172 units at a $17 million loss?
The only entity that could really do that is Mammoth Lakes Housing, via state/federal grants.
On behalf of his client, Carney is again trying to work out a win-win deal with the Town to get affordable housing as well as salvage opportunity for his client(s) to extract something out of the property other than annual tax bills.
The latest proposal is for the Shady Rest ownership group to essentially gift half the 25 acres to the Town with the idea that ~8 acres are used for affordable housing and 3-4 acres for a community amenity.
Carney later clarified his comments to say that no “gift” of land is under consideration. The developer would ideally split the property into a few different parcels, sell part to the Town and the rest to the developer.
The Town could then use its propery however it wished. It could contemplate population densities as high as 24 units/acre, as it did at its first-ever affordable housing project at Meridian Court, yielding 192 units, or it could opt for a more “livable” configuration (say 18 units/acre), yielding 144 total units.
The remainder of the site, says Carney, would also be dedicated to locals’ housing. The vision: market-rate, but with some kind of restriction on eligibility. “If you limit the market, you necessarily limit the price,” said Carney.
The Shady Rest group is apparently working on a development agreement with the Town at this time. In terms of where the market is now, local real estate broker and appraiser Matthew Lehman says the median prices for Mammoth condos and single-family homes was down slightly in 2016 and that slight downward trend has continued into 2017. This, however, follows a 23% price spike in the single-family home market in 2015.
But overall, the market does seem to have room to run. After all, the median home price in 2017 is approximately $200,000 below what the median price was in 2007.
