The 8th Street Redevelopment Project in Craig got another boost this month with news the city has been awarded $1.5 million through the Innovative Housing Incentive Grant Program from the Colorado Department of Local Affairs.

If the affordable housing project at the former Memorial Regional Hospital site between Tucker and Russell streets goes to plan, the city will purchase 20 homes produced from a production facility in Buena Vista. They will come in four, five-unit buildings and vary in size from 1,152 to 1,368 square feet.

The homes will come with some amenities too, such as a backyard, carports for two vehicles and walkways in front of each home. City Manager Peter Brixius said the homes will not likely be ready for sale until sometime in 2024.

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“It’s a great location,” Brixius said of the project. “It’s close to schools, the senior center, the Chamber of Commerce and the core downtown area in Craig, so it’s within walking distance to all those areas.”

The grant money comes from state legislation that directs it to local governments that are working to develop innovative affordable housing projects. Grant applications were judged on a variety of factors, including project readiness, capacity and the potential impact on local housing needs, among others.

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In a letter dated March 13 informing Craig Mayor Ryan Hess of the $1.5 million award, state officials said they also reviewed qualifying land-use strategies associated with the application, and they applauded the city’s progress in this area.

However, because the grant money is tied to state and federal stimulus funding, it must be spent before April 2024.

“That pretty much means that in 2023, the improvements have to be made to the site,” Brixius said.

The project is meant to transform the former hospital site that was razed in 2021, cleaned up and mitigated for asbestos. The county and Memorial Regional Health owned the property before transferring it to the Craig Housing Authority, which was formed last year.

On March 14, Brixius told City Council the $1.5 million would pay for infrastructure work. City officials are still awaiting news on a $5 million grant request.

The overall project is estimated to cost $7.6 million, and Brixius previously told the Craig Press the city had $1.8 million to $2 million secured and he didn’t anticipate the city taking on any debt for the project. 

The project could include 12 two-bedroom units and eight three-bedroom units that would hit the market with price tags between $280,000 and $310,000, and the units would be targeted at people making within a range of 140% of the area median income. Most basically, the project seeks to ease a sharp need for housing among the working class in Craig.

Brixius also said the city plans to replace three blocks of sidewalk from Sixth Street to Ninth Street on both sides of Yampa Avenue, and improve the bus stop at Ninth and Yampa, while also bringing it back in front of the Yampa Building.

Brixius said there will be a formal bus stop, and residents will also see the city upgrade a few other bus stops to better protect riders from the elements and heighten safety. The new bus stop project is not tied to the same grant funding as the 8th Street Redevelopment Project, but Brixius said it will be important for the affordable housing project to have a new bus stop at the North Kum & Go because many of the residents may be traveling for work.

Steamboat Springs also serves Craig, and the transit service has about 15 stops locally. According to the city manager, about 2,500 residents — either heading west, south or north, but mostly east — leave the county for work every day.