NEDERLAND - The Nederland Planning Commission met on Wednesday, May 21, 2025, to discuss three ordinances involving an affordable housing development variance, a change to the Planned Unit Development process requested by a local landowner, and a draft ordinance regarding natural medicine regulations.

“Natural medicine” regulations

 On October 23, 2024, Commissioners discussed the Town of Nederland adhering to the Natural Medicine Health Act (NMHA), which was approved by the State of Colorado in 2022 and allows for the use of natural medicine, such as psilocybin, to be administered by trained personnel at licensed health centers.  

At that time the Commission opted to institute a one-year moratorium on natural medicine operations to allow for a period of study and review before developing regulation on cultivation, manufacturing, testing facilities, and administering centers. 

On January 21, 2025, the Board of Trustees (BOT) approved Ordinance 871, placing a moratorium on the use of “natural medicine,” pertaining specifically to psilocybin, and the establishment of natural medicine services in Nederland, until December 31 of this year.

Commissioners were tasked with reviewing a draft ordinance in order to expedite the implementation of local regulations before any natural medicine businesses licensed by the state attempt to begin operating in Town. 

The draft ordinance includes term definitions for related psilocybin-administering centers and cultivation businesses, and also amends the Nederland Municipal Code (NMC) to allow for Cultivation, Product Manufacturing, and Testing facilities to be constructed in Central Business District (CBD), General Commercial (GC), and Industrial zones.

Healing Centers are labeled under the definition of "medical clinic,” are permitted in the same zones as clinics, and are allowed as use by right, therefore omitting the need for special review.

The ordinance also includes operational restrictions, requiring businesses to operate within a “permitted principal building,” prohibiting outdoor operations of any kind, and dictating that personal cultivation take place within enclosed and locked spaces that are nondescript when viewed from the outside of the property. 

Town staff requested the Commissioners’ feedback regarding the ordinance in order to make edits and present a final draft for approval at their next meeting on June 25.  

Vice Chair Steve Williams asked for more detail on the state’s compliance process for these businesses related to natural medicines. Town Attorney Jennifer Madsen explained that the state has implemented its licensing and application process, as well as its own base layer of regulations, which all natural medicine businesses must adhere to. 

Community Planner Britt DeMinck added that the Town provides an additional layer of regulations, and that all operations will have to go through the Town’s own processes for licensing and building inspections by SAFEbuilt and the Nederland Fire Protection District. 

Madsen also clarified that medical clinics are allowed in Neighborhood Commercial, CBD, GC, and Public zones by a Special Review Use (SRU) process, which Chair Jim Reis noted provided a safeguard as far as officially notifying and involving neighborhoods that are potentially impacted by the business being proposed.

With the exception of a few technical details, the Commission approved of the ordinance drafted by Madsen, which requires few changes before returning to the Commission on June 25.

Once approved for recommendation by Commissioners, the ordinance will go before the BOT for final approval and implementation. If approved, the moratorium on the use of natural medicine and of natural medicine services will immediately expire. 

PUD approvals

The Commission continued their discussion from January 24, 2024, of a request from landowner Ron Mitchell to amend Chapter 16 - Article VI of NMC to allow applicants in the Planned Unit Development (PUD) approval process to forgo the preliminary PUD process and proceed directly to final review and approval.

Mitchell, representing Nederland Central Business District Redevelopment LLC, had previously stated to the Commission that his current PUD application regarding several large developments in Nederland’s downtown area including a proposed resort and underground parking garage, covers all requirements under the final PUD approval process.

Mitchell also claimed that he has earned the proof of support of his downtown redevelopment plan since it has been “vetted in the community over the past eight to ten years.”

At that 2024 meeting, Commissioners decided to wait until the completion of the Town’s Comprehensive Plan update before taking on the project of writing new code language. It was expected then that the updating process would include a thorough audit of Chapter 16 of NMC.

Such an audit has not yet been completed, though the Comprehensive Plan has been approved and implemented. 

Amending Chapter 16 with code language to allow for the requested variance in the PUD process is being suggested by Town staff as a result of a precedent for such a variance being set within NMC 17-111. However, it was stated that adding such code language does not negate the application process, during which an applicant’s request may still be denied.

Mayor Pro Tem Nichole Sterling, the BOT liaison to the Commission, provided additional context, stating that part of Mitchell’s argument for the variance was that the requirements in both stages of the PUD processes are relatively similar, and therefore redundant.

After Commissioners tried to remember where the tiered PUD process originally came from,  which Commissioner Roger Cornell believed was adopted from 1982 state code, they discussed what is being lost by granting Mitchell’s request. The biggest concerns were of the loss of community input, and of the “unforeseen changes” that can occur on development plans over time.

Madsen suggested examining the entire PUD process and streamlining it so as not to needlessly add more work for Town staff by allowing variance applications. She noted that every developer will apply for a variance if it is permitted to do so. 

The suggestion resulted in discussion of potentially codifying a mandatory introductory meeting where the applicant presents the preliminary information on his plan to the Commission, who then offer prejudgment of the application, while remaining aware of ex parte, and provide feedback in the form of parameters and considerations. 

Town Administrator Jonathan Cain also suggested implementing a technical review committee responsible for handling all preliminary matters. 

Commissioners weighed whether it was pertinent to address this issue by either amending Chapter 16 to allow for a variance process for developers wishing to skip the preliminary PUD review, or by taking Madsen’s suggestion and rewriting the entire PUD process. 

Ultimately, the Commission decided to table the matter, as prioritizing it appeared unnecessary when considering that a full audit of NMC, including the prospect of hiring consultants to support rewriting Chapter 16, was already planned for the near future. 

Affordable housing issues

Commissioners also continued their discussion of Ordinance 856, which regulates the Yard and Bulk requirements on affordable housing. The ordinance, which was originally passed in December of 2023, has been frequently discussed by the Commission this year due to amendments being recommended by Town staff. 

Community Planner Britt DeMinck was seeking direction from Commissioners regarding adding specific criteria for developers who are seeking up to a 50% yard and bulk variance on deed-restricted affordable housing developments. 

The current criteria specifies that the variance shall “not alter the essential character of the neighborhood or district in which the property is located,” “will not substantially or permanently impair the appropriate use or development of adjacent properties,” and “is the minimum variance that will afford relief.”

Mayor Pro Tem Sterling clarified to the Commission that 10% of the total number of dwelling units being offered as affordable, or a single housing unit being offered to rent or to own as affordable, qualifies the development as “affordable housing.” However, a developer can request 100% deed restriction in order to be eligible to apply for a 50% yard and bulk variance. 

Commissioner Mike Dye, who was absent from the meeting, submitted his comments in writing, which stated his belief that a new Area Media Income (AMI) based metric is required in order to calculate what is truly considered “affordable,” as the cost of $2,500 a month for a one-bedroom unit, at 80% AMI, is not actually affordable. 

The conversation veered to the minimum required time for deed-restricted properties to remain affordable, which Ordinance 856 has set at 20 years. Cain stated his belief that the best way to land a low-AMI developer, which he labeled a “unicorn,” is to offer density bonuses and the ability to develop more permanent structures with up to 40 or even 99 year deed restrictions. 

The Commission recommended that Town staff draft an amendment to Ordinance 856 which establishes a minimum of 30 years for deed restrictions on affordable properties. 

The Nederland Planning Commission meets on the fourth Wednesday of every month. Their next meeting is scheduled for Wednesday, June 25, 2025, at 6 p.m. Meetings can be attended online via WebEx. 

For more information: https://townofnederland.colorado.gov/planning-commission.