What do aging Hollywood heartthrob Erik Estrada and Archuleta County’s affordable housing crisis have in common?
A lot. Or rather, “lots.” Thirty nine of them. A mile or so from City Market.
The story goes like this.
In 1973, a large-scale residential and commercial development company called Eaton International Corporation made a development agreement with Archuleta County to grade, gravel and pave the streets in subdivisions bordering Pagosa Springs, according to court documents related to a lawsuit later brought against the corporation by the Archuleta County commissioners and the Pagosa Lakes Property Owners Association .
At the time Estrada had but a couple of film roles to his name: the Christian evangelist Nicky Cruz in “The Cross and the Switchblade,” and east L.A. tough guy Sergio Duran, in “The New Centurions,” based on “a nationwide bestseller about cops—by a cop!” Estrada wouldn’t hit the big time until 1977, when he became the beloved Officer Frank Poncherello, or “Ponch,” on the smash cops-on-motorcycles series “CHiPs.”
In 1983, Eaton sold their property to another developer called Fairfield Communities, Inc., said Jim Smith, who started working for Eaton in Pagosa Springs in 1978. But in 1990, Fairfield went bankrupt and “gave a lot of their real estate developed properties to Archuleta County in lieu of taxes,” he said.
The county auctioned off the properties in 1992. “It was a big deal. People came from all over. And they bought the lots for very small amounts of money,” Smith said. They remained undeveloped — no roads or electricity — but that didn’t deter investors who Pam Flowers, Archuleta County director of development, said, “would buy land off the internet. Never saw it. Didn’t ask questions. They just wanted a piece of paradise.”
In the early 2000s, the lots also caught the eye of National Recreation Properties Inc., a real estate investment company based in Irvine, Calif., Smith said.
“Pagosa Lakes is an upscale little subdivision,” he added. “That’s why NRPI invested in it. I remember selling property out there. It was a very pretty area.”
NRPI had operations in California, Washington, Florida, Arkansas, Arizona and Pagosa Springs, according to Leanne Goebel, a writer who investigated the company in the early 2000s. Founded in 1997, NRPI promised dream fulfillment in cheap, undeveloped land waiting to house a vacation getaway, a retirement pad or a tangible investment. But more than once the promises turned into little more than “a mirage in the high desert,” as the Ocala StarBanner newspaper in Florida once put it.
“In a (California) development platted for 15,000 lots, fewer than 400 houses dot the hills or surround the glorified lake, a muddy cattle reservoir that shrivels in the heat,” the paper stated. “That hasn’t stopped Jeffrey Frieden and Robert Friedman, two Orange County entrepreneurs who once sold stereos and back rubs, from resurrecting sales in this and other left-for-dead subdivisions across the country.”
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The chief method NRPI used to market these out-of-the-way lots was through websites and infomercials that enticed potential buyers to fly in and see the raw land with their own eyes. According to Goebel’s work, that involved putting down a travel deposit to hop a flight paid for by NRPI, peruse the land with a real estate agent — modern-day gold rush-style — and buy the land (or not), with NRPI financing at an interest rate of 14.9%.
Estrada had handcuffed his last perp in 1983, when “CHiPs” was canceled. After that, he starred in films, did a telenovella, dabbled in reality TV and became the face of some infomercials — including NRPI’s. Smith said they used him as “the figurehead, the front man. He’d basically make a sales pitch that they could show people.”
Interested parties were flown to Durango and bused to Pagosa. Smith said Estrada sometimes came with them.
“In the first batch, when they were kicking everything off, he was very up, and excited. He was Mr. Nice Guy, Mr. Promoter,” he added. And it wasn’t hard to sell the undeveloped lots because Pagosa is “a resort community in the banana belt of the Rockies with the deepest hot springs in the world and Wolf Creek ski area, all surrounded by national forest and wilderness areas.”
In 2004, the housing market was hot. NRPI bought lots in the Pagosa Lakes Area through Jim Smith Realty for resale. They purchased more than 100. But in 2006, the housing market started to tremble and by 2008, was in “a bad, deep recession,” Smith said. “It hurt a lot of people. NRPI had a few lots left over, and individuals, if they put water and sewer in, had to pay between $14,000 and $15,000 in tap fees. There were many who didn’t pay.”
Derek Woodman, Archuleta County manager, confirms Smith’s story. “The owners of the property, because there was no capacity for development, quit paying taxes, HOA dues and fees for access to water and sewer,” he said. They went dormant for a decade and a half “while fees, unpaid taxes and penalties amounted to $100,000-plus per lot,” said Emily Lashbrooke, executive director of the Pagosa Springs Community Development Corporation, the economic development agency for Archuleta County.
Pairing opportunity and community
Fast forward to the 2020s and Archuleta County was in the midst of a major housing crisis. According to a prospectus created by the community development corporation, the poverty rate was 11.4%. Lashbrooke said Pagosa Springs Medical Center in 2022 had to close its entire second floor due to staffing shortages. Restaurants were (and are) shuttered two to three days a week for the same reason, she added.
Employers struggled to hire because no one could afford to live in existing housing. The prospectus calls the county “the most expensive place to live in southwest Colorado,” with a median home price of $775,000. Meanwhile the Area Median Income, calculated by the Colorado Housing and Finance Authority is $62,500.
But the county had all of these lots sitting dormant and awaiting fulfillment while “neither the Pagosa Area Water and Sewer District nor the HOA were collecting holding fees,” Lashbrooke said.
They obtained treasurer’s deeds for each parcel and put them through a “quiet title process” before bringing them to auction. Only two sold; the others couldn’t get adequate bids, Woodman said. The highest went for $20,000; with infrastructure, they’d have brought in $50,000, he added. Now the county was back to its original problem, but this time, solutions would come.
Flowers said last year, as the county was looking into applying for Proposition 123 affordable housing funding, the commissioners were dealing with tax lien properties after “deciding not to take undercut bids.” Historically, they had donated 11 similar lots to Habitat for Humanity in multiple locations. Lashbrooke said with the newly repossessed properties, Warren Brown, county commissioner for District 1, suggested donating them to the development corporation and habitat for affordable housing.
Flowers was an early adopter: “When I saw where those lots were I was like, oh my gosh, all we need is roads. I’m looking at orphan lots that will remain orphan unless we get a road built. If we can get grant money to build the roads that would be the kickoff to making those builds. And if the county guarantees them to the community development corporation we can guarantee (they’ll become) what we want them to be.”
But the subdivision had the same problems as always: no way in. So the county applied for — and won — a $1.9 million “More Housing Now” grant from the Department of Local Affairs. The length of road needed “amounts to approximately a mile with a lot of cul-de-sacs,” said Flowers, but once it’s there “more than 100 lots — currently orphaned — are going to be made accessible. That’s including 39 or so donated to the community development corporation, with the first 10 to be built by the end of this calendar year. They’ve already broken ground. They’ll build the rest over the next three years.”
The county planning department and Pagosa Lakes Property Owners Association will waive all permitting fees; the Pagosa Area Water and Sanitation District will waive all sewer and water tap fees; and all subcontractors involved in the project will provide “steep discounts,” according to Lashbrooke.
The single-family homes are designed for a one-person household with an annual income in the 80% and 120% AMI range, or between $58,240 and $87,360, up to a six-person household with an annual income between $99,780 and $124,500.
Purchase prices will range from $290,000 and $350,000, and Flowers said the new houses will be intermingled with privately owned lots, so the development “fits the social equity piece.”
“When we pitched this to the state, grant applicants had seven minutes to tell them why this is a project they should fund,” she said. “A big part of it for us was, we’re not isolating the workforce housing. These houses will be intermingled with privately owned lots. They’ll be part of a big community in an area that’s going to see a lot of growth.”
“Everybody is on the same page with the crisis we have here in Archuleta County,” Lashbrooke added. “So when we were invited to Manitou Springs to present (our case) to DOLA’s energy impact committee, we thought, there’s no better way to show our collaborative support.”
Representatives from the county, town, Pagosa Lakes Property Owners Association, Visionary Broadband, and community development corporation all went. “For the first time in a really long time, our community is rowing all in the same direction,” Lashbrooke said. The first 10 houses will go to pre-qualified applicants through a lottery open now. Construction will go through the year, with a projected move-in date of December. Ten more houses are planned for 2025, with the remaining to be built in 2026.