Festivaria proposal brings wastewater questions before Lyons board

Lyons is scheduled to discuss a proposed Festivaria Arts Campus on Aug. 5, including an annexation request, planned-unit-development zoning and guest accommodations for two properties on N. St. Vrain Drive. Staff materials raise questions about wastewater capacity and unresolved environmental records; the proposal has not been approved.

The Utilities and Engineering Board agenda lists the referral for 19617 and 19661 N. St. Vrain Drive as a discussion item. The record available Aug. 4 does not show a board vote or recommendation.

Festivaria proposal

Festivaria LLC, associated with Planet Bluegrass, is seeking annexation of 19617 and PUD zoning for both properties. The properties are under county zoning identified in the referral as Light Industrial and Rural Residential; the requested town zoning is PUD.

The PUD narrative proposes 30 to 45 guest-accommodation units, subject to later town review and approval through a development plan. It does not set a final number of hotel rooms or assign every proposed use or unit to a specific property.

The narrative says a renovated “Lab” building could include a restaurant, dining and patio areas, a bar, commercial kitchen, fitness facilities, banquet and workshop space, offices and lodging-support uses. Outdoor gathering areas and other improvements would be developed in phases and remain subject to later review. Existing residential and garage structures could be retained or adapted for residential, guest, storage or service uses.

Wastewater capacity

The properties have different utility arrangements. Staff materials say 19617 uses a well and septic system and receives no town utility services, while 19661 uses Lyons water and sewer.

Town utility comments say the nearby wastewater lift station and force main were designed for Eagle Canyon. Staff warned the system may need expansion or an upgrade before development beyond a single-family residence could proceed. The referral says the work could be more than a minimal improvement and should be considered in the project’s financing statement.

The packet does not establish the project’s permanent water and wastewater service arrangement, available capacity, upgrade timing or cost. The concern is a staff warning, not a completed capacity study or final engineering determination.

The issue comes as Lyons evaluates growth and infrastructure capacity. During a July 27 discussion, staff said the town’s documented water supply could support about 300 to 400 additional single-family-equivalent housing units or commercial equivalents. That estimate exceeds the 87-household need identified in the DRCOG regional housing-needs assessment, though the figures measure different things: infrastructure capacity versus households not served by the local housing market. Commissioners asked staff to distinguish actual capacity from desired or theoretical capacity.

Environmental records

Staff materials raise questions about 11 monitoring wells documented by the Colorado Division of Water Resources on the 19661 property. The packet does not say why the wells were installed, whether they remain active, or whether they were properly abandoned or otherwise resolved.

Meeting materials also record a question about whether 19661 was previously the site of a hazardous-material cleanup. A town representative recalled that something may appear in title paperwork but could not answer during the discussion; staff said it would follow up with Planet Bluegrass and state records.

The packet contains no confirmed cleanup case, contamination finding, description of hazardous material, remediation plan, agency closure letter or no-action determination. The well and cleanup questions remain follow-up items, not findings that the site is contaminated.

Growth-overlay context

The Festivaria request comes as Lyons considers a draft strategic-growth overlay. The overlay would not approve development; it would identify areas where redevelopment or infill could be appropriate as the town updates its comprehensive plan.

Based on staff’s presentation and commissioner discussion, the draft focuses on the eastern corridor and Highway 36/downtown commercial areas, including potential areas around the old CDOT site, Blue Cross site, riverbend/automotive area and downtown commercial blocks. Staff said the eastern-corridor boundary would remain relatively tight along the highway and initially stop at the southern town boundary.

The draft generally excludes Apple Valley and South St. Vrain, county-owned or open-space land, conservation easements and other constrained properties. Staff said the north side is limited by the blue-line water-service boundary, topography and infrastructure challenges. Commissioners also discussed possible revisions around the gateway, post office area, underused parcels and looping/stone-yard area. The July 27 presentation shows commissioners discussing revisions, not adopting a final map.

Next steps

Colorado’s SB 24-174 requires covered local governments to publish a housing-needs assessment and add water-supply and strategic-growth elements to comprehensive plans by Dec. 31, 2026. The state’s current DOLA housing-plans guidance says housing action plans must be posted locally and submitted to DOLA by Jan. 1, 2028, with updates at least every six years. During the July 27 meeting, however, Lyons staff described the deadline as the end of 2028 and said consultant support could begin Jan. 1. The town should clarify the discrepancy before treating its schedule as final.

For the Festivaria referral, the packet lists conflicting deadlines: The referral form says comments were due July 6, while July 15 draft minutes identify Aug. 14 as the board’s deadline. The record does not say whether Aug. 14 superseded or extended the earlier date, applied only to the board or reflects a clerical error.

Staff said the overlay would be revised using commission comments, then circulated to other boards and commissions. The sequence discussed July 27 was review in August and September, a return to the Board of Trustees in late September or early October, additional public engagement and a return to the board and commission before submission in December.

No final overlay or comprehensive-plan amendment was approved July 27. The Festivaria request remains at the referral stage, with utility and environmental questions unresolved before any future development approval.