In a partnership between three local agencies, the former site of Memorial Regional Health will be deeded to the city of Craig with early plans for a housing project catered to the local workforce. 

On Thursday, Jan. 5, the MRH board met with city officials and Moffat County commissioners to discuss transferring the deed for the hospital-owned property at 785 Russell St. to the Craig Housing Authority for a workforce housing development. 

The now-vacant property was given to MRH in 1949 as part of a larger parcel from the school district for the purpose of building a hospital. When MRH became a county hospital, the property was deeded to Moffat County in 1952, which was a requirement per state statute. 

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“When we demolished the hospital, we didn’t know what we wanted to do with the land,” MRH CEO Jennifer Riley said. “The board of trustees, last year as part of our goals, wanted to be a part of a housing project.”

MRH has been working closely with the city and the newly formed Craig Housing Authority on bringing an affordable housing project to the community. The housing authority was formed to help provide more attainable housing options for people who choose to live and work in Craig, and to leverage resources to help get projects off the ground. 

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Work on the former MRH site would be the first major development for the housing authority.

“Over the past couple of years, we have been in conversation with MRH regarding the old hospital site and its potential for housing development,” City Manager Peter Brixius said. “However, the labor and materials cost escalated to a point that every concept developed created too big of a funding gap to even be financially feasible. After many months, we may now be in a position to take advantage of funding vehicles necessary for an initial project to move forward at this site.” 

According to Riley, the city approached the MRH board to ask if they would deed the property over to the housing authority to market to developers. The MRH board voted on Thursday to release any stipulations on the property — such as that it must be used as a hospital — so the county can deed the land to the city for the proposed project. 

“The board agreed that would be something that is worthwhile, and will benefit not just our employees, but it will really benefit the entire community,” Riley said. 

Moffat County commissioners agreed on Tuesday morning, Jan. 10, to transfer the property to the city, though there still remain some legal details to work through for the property transfer.

Once the city gains control over the property, officials plan to hold a public meeting to communicate project objectives and gather feedback to help improve the development.

The city was exploring other sites to begin working on a housing project, but 785 Russell St. took priority because the site already has access to utilities. The city is requesting funding from an American Rescue Plan Act incentive grant and a transformational housing grant to support the development. 

Brixius said the project plans to produce 20 two-story, townhome-style standalone units between 1,152 and 1,360 square feet each. Units will have covered parking and small fenced-in yards. Brixius said the build cost would be between $350,000 and $400,000 per unit, for an estimated overall project cost of $7-8 million. 

Brixius said the units would potentially be constructed in the fall, with some of the units going on the market by the end of the year. The remaining units would be completed in 2024, a stipulation of the funding. 

“This really meets our goal. Housing is a big need in our community, both rental units and market units,” Riley said. “So it does move us in the direction we’re trying to go in a pretty quick timeframe.”

With incentives and gap funding leveraged by the housing authority, the goal range for properties to hit the market will be $250,000-$300,000. The properties would be deed-restricted with an income qualification around 140% area median income, an amount that depends on the number of bedrooms and number in the household.

“It’s important to distinguish between affordable housing and Section-8 housing,” Riley said. “When looking at our workforce at the hospital, (140% area median income) includes about two thirds of our employees, so it’s workforce housing. It’s not the high-end earners; it’s the average wage earners.” 

Part of the deed restriction would include an appreciation limit of approximately 2-3% per year to ensure the units remain in an affordable price range. According to Brixius, the development would have a homeowners association to oversee terms of the units, as well as property maintenance and upkeep. 

“The intent is to make this a nice, livable neighborhood,” Riley said, adding that the area surrounding the property is already a residential neighborhood, with the exception of Northwest Colorado Health. 

Brixius said that if the property transfer and funding all go through, the project aims to benefit workforce housing with some additional benefits for health care workers and larger employers such as the school district. 

One of the benefits that has been discussed is that health care workers and school district employees would have first right of refusal on a certain number of the units, but Brixius said that nothing has been decided yet. 

Brixius said the first meeting of the housing authority board will take place at the end of January.