Fading West Development is building a new 110,000 square foot home construction factory in the heart of the Arkansas River Valley with the mission of providing attainable housing throughout the western United States and increasing employment in Chaffee County Colorado.
When fully operational, the production facility is expected to create over 700 homes, townhomes and apartments each year, addressing the nationwide housing shortage while creating more than 100 well-paying jobs in the Buena Vista community.
“We are excited to expand our vision throughout Colorado and the western United States by creating beautiful, high quality, affordable homes,” says Fading West Development’s CEO Charlie Chupp. “We intend to develop attainable communities throughout the west, and partner with other developers and general contractors looking for smart, cost-effective housing options.”
But what does it take to finance and create the needed equity to build such a facility in rural Colorado?
Partnerships bring project to life
Fading West started as a developer in Buena Vista, looking to build affordable modular workforce housing for year-round residents like teachers, first responders, and tourism industry employees who might not otherwise have been able to afford housing. They quickly found quality control and shipping costs to be problematic when importing modular housing constructed in other states and decided to build their own manufacturing facility to construct the homes.
The financing of the $16.8 million project shows the power of public/private partnerships, bringing together private capital and a dedicated entrepreneur with local, state and federal programs to support a private community business.
In addition to the money contributed by the business owners themselves, Fading West secured a loan from Collegiate Peak Bank. This loan was underwritten by the United States Department of Agriculture, much the way the SBA secures its loans. Collegiate Peak Bank also provided a $1 million line of credit secured by collateral provided by Colorado Housing and Finance Authority’s Cash Collateral Support and Cash Collateral Support Plus programs run on behalf of the Office of Economic Development and International Trade (OEDIT).
Fading West also received a $500,000 unsecured business loan for working capital for the factory from the Upper Arkansas Area Development Corporation supported through the Department of Local Affairs (DOLA’s) Division of Local Government Community Development Block Grant Program using funds originally provided by the federal Department of Housing and Urban Development.
“OEDIT has been able to convene the project partners -- from the federal USDA underwriting the lending institution to the state and local funding options -- that helped make this noble and needed project viable,” said Betsy Markey, Executive Director of the Colorado Office of Economic Development and International Trade. “When completed, this facility will create 100 well-paying jobs in the Arkansas River Valley and provide affordable housing for the workers who sustain these communities.”
"DOLA joins this collaborative effort from multiple aspects of our mission to strengthen Colorado communities," said Rick M. Garcia, Executive Director of the Colorado Department of Local Affairs. “We are proud to provide working capital from our Community Development Block Grant program to a business engaged with the local community that is also supplying a much needed construction alternatives for affordable housing."
Previous success paves way for Colorado’s future
Fading West Development builds their modular homes to all state and local building codes. The modular system reduces build times by approximately 40 percent and lower construction costs anywhere from 10 to 20 percent.
“Our mission and our passion is to drive down the astronomical cost of home ownership. We want to give more people the opportunity to own their own homes and put down roots in their communities. We work with municipalities, landowners and investors who want to be a part of helping address the affordable housing crisis. We have an incredible opportunity to do something special here in Colorado,” Chupp said.
Fading West Development has already proven that their system works through the success of The Farm at Buena Vista, a 21-acre, 218 home pocket-park community in Buena Vista, Colorado.
It takes a village
Fading West Development showcases how private businesses can partner with local, state and federal agencies to help develop rural parts of Colorado, creating jobs and addressing real needs. To find out how OEDIT and our partners at DOLA can help support your business idea, visit oedit.colorado.gov.