Steamboat Springs, CO -- People are rapidly migrating to western “gateway towns,” or small towns adjacent to public lands, ski areas, and outdoor recreation. This trend has been occurring for years, but has accelerated even more with the pandemic and is pricing out current and future residents. In a recent study of gateway communities across the West, more than 80% say that housing affordability is moderately to extremely problematic for their town.
With a focus on building workforce housing in gateway communities across Colorado, Four Points Funding was successful in raising $21.5M of equity required to develop their first five projects, which equates to over $60M of investment for these towns. Pleased with the reception from communities in which they are developing and interest from investors, Four Points is launching their third Opportunity Zone Fund, targeting a $50M equity fundraise that would place a total of about $150M of investment across Colorado’s gateway communities.
“Most investors and developers continue to focus on the urban centers in Colorado. While there are plenty of people moving to Colorado’s metro-areas, Colorado’s gateway towns have even larger population growth, unrivaled outdoor recreation, urban amenities, and a combination of local startups, companies relocating, and remote work,” says Stephanie Copeland, Partner at Four Points Funding and former Executive Director of Colorado’s Office of Economic Development and International Trade.
Four Points’ two largest projects to date are multi-family housing developments in Grand Junction and Glenwood Springs targeting the middle income residents of the area. The developments provide for an immediate need of modern and accessible housing in areas experiencing rapid economic and population growth. Alongside the need for housing, smaller communities benefit greatly from outdoor-focused hospitality projects that attract an increasing number of visitors. Four Points has made several investments in these types of properties including a glamping site in Naturita, a campsite in Buena Vista and a campsite and hot spring near the Royal Gorge.
“Growth is scary for locals. We understand because our team lives in and cherishes the same types of communities in which we are investing. Once you realize how inevitable the growth is, the mindset shifts to how we can ensure these communities benefit from the growth while retaining their residents and culture,” says Chris Montgomery, another Partner at Four Points.
Four Points has been investing across rural Colorado since 2013 and launched their first Opportunity Zone (OZ) Fund last year, which utilizes a bipartisan federal piece of legislation created to stimulate capital flows to underinvested communities. In exchange for investing in an Opportunity Zone and holding the investment for at least a decade, investors do not pay any capital gains tax and receive additional tax benefits.
“While the Opportunity Zone legislation offers great tax benefits and incentives for investors, the projects must also make sense for the communities. That is why Arctaris is so pleased to invest with Four Points – because they know Colorado so well and what these towns actually need,” says Jonathan Tower, a General Partner at Arctaris Impact Investors.
Fortune Magazine recently recognized both firms for their prudent investing, “Experienced practitioners like Arctaris and Four Points prove that OZs can generate both impact and return.”