STEAMBOAT SPRINGS — A $100,000 contribution toward a lighting project along the Yampa River Core Trail and a voluntary 0.5% assessment on gross room revenues to benefit Steamboat Creates are two public benefits local business owner Scott Marr promises to deliver as part of his proposal to build a new boutique hotel in downtown Steamboat Springs.

In addition, Marr plans to add enhanced lighting in the alleyway behind the hotel and has agreed to make the hotel’s lobby and small restaurant and beverage area open to the public. He also plans to work with local creatives to display art in the hotel’s public areas.

The proposal was enough to earn the unanimous support of Steamboat Springs City Council members, who approved the hotel as a planned unit development, or PUD, on first reading Oct. 8 with a condition that Marr, who owns and operates the Steamboat Springs Holiday Inn, return to council at Tuesday night’s meeting and detail more community benefits from his new project.

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“It’s our job to evaluate if the project meets what our code allows, which is the PUD,” said council member Lisel Petis before voting in favor of the proposal. “I really appreciate the developer and the applicant taking the time to actually take our comments and look at what else they could do, and I’m at a point where I think this provides a superior community enhancement.”

“Downtown is vibrant, it’s fluid and it’s exciting, and we need to continue the growth of our downtown area,” said council member Robin Crossan. “This property is going to be a challenge for any developer, and I think the PUD allows us to allow this to continue to move on.”

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During public comment, a dozen people spoke in favor of the hotel project, and four people spoke against it.

“In some ways, this is kind of a perfect scenario,” said realtor Chris Sias. “You have a well-regarded local operator who’s willing to bring a great project to a site where the city has spent ample money redeveloping Yampa. I do think the hotel is an inherent benefit in itself based on the number of people it will bring to downtown.”

Tod Johnson, director of beverage services for Rex’s Family of Restaurants, pointed out that downtown Steamboat was once home to six hotels and, currently, there are only four.

“There is definitely room for one more,” Johnson said.

Matt Eidt, president of the Steamboat Creates board, also spoke in support of the hotel. In particular, he noted that guests of a boutique hotel are the kind of “cultural tourists” the Creative District hopes to attract to Steamboat.

“The folks that would be staying at an art-centric, luxury boutique hotel stay longer in communities, and they spend more money than other types of guests,” Eidt said. “It’s our belief that the development of this hotel will have a positive impact on our constituents. These guys are going to populate a portion of their hotel with the products of our constituents and also engage other artists in the production of murals. We believe their community benefit has been satisfied.”

Those who spoke against the hotel said they believed the project should not be approved as a PUD with 13 variances.

“Yes, there’s a community need for a higher-end hotel downtown but at what cost?” asked Izabela Banas-Golaszewski, who manages the Nordic Lodge on Lincoln Avenue. “I think we all know there is a problem with the zoning rules being too strict for new developments. It is a problem, but is this the right way to go around all of the rules?

“It’s an opportunity to look at our zoning code and change some of the rules and then approve new projects. I don’t think we should do it the other way around.”

Diane Brower urged the council, in approving the project, to consider where employees of the new hotel would live.

“Apparently, there is no consideration in this approval process given to the impacts of these developments on the increase in low-income living units that will be needed in Steamboat Springs,” Brower said. “One way or another the city will end up having to spend taxpayers money on more low-income housing to subsidize the low-wage jobs such businesses generate or subsidize more public transportation throughout the valley.”

After hearing from the public and discussing the project, council voted unanimously to approve the PUD, which will allow Marr to build a 55-room, three-story hotel on his property on the northwestern corner of 10th and Yampa streets.

Planned unit developments create a new zoning district that is customized to the project being built, and PUDs can be used if a project meets specific criteria outlined in the city’s Community Development Code and if the project is “superior in terms of community enhancement,” which was the focus of Marr’s presentation Tuesday.

The hotel will be served by an underground parking lot, and five public parking spots along Yampa Street in front of the hotel will be converted to exclusive use for the property. This loss of five parking spots raised concerns among council members, but city planners explained the hotel needed the spots for check-in and check-out and to provide access to the parking garage.

“I am very concerned about overall parking, but I want to remind the audience and the City Council that almost half of the downtown parking is privately held, although we publicly use it,” said Council President Pro-Tem Kathi Meyer. “So, we have to come up with greater, bigger discussion of parking downtown.”

Conflicts of interest

Questions about new council member Michael Buccino’s ability to vote on the project were raised before the agenda item came before council.

Buccino served on the Steamboat Springs Planning Commission when it approved the hotel project by a 4-3 vote in September. Buccino voted in favor of the project, and some questioned whether that vote created a conflict of interest.

City Attorney Dan Foote determined Buccino’s previous role on the Planning Commission and initial vote on the project did not constitute a conflict of interest. Buccino said he did not believe his job as an interior designer or his role in developing a tiny home project in Milner presented a conflict either.

“Part of my job (as a city council member) is to be impartial,” Buccino said. “I have no conflict of interest in this case.”

Council President Jason Lacy did recuse himself from the vote, citing the fact that Marr was a donor to his reelection campaign as the reason.

Council member Heather Sloop was absent from the meeting.

In voting to approve the PUD, council asked that the public benefits outlined at Tuesday’s meeting be detailed in the developer’s agreement.

It was also noted that the voluntary assessment to benefit Steamboat Creates would be in place for a three-year period with the option for three-year renewals after that.

“As a business, you can’t promise something into perpetuity,” Marr said. “If it’s a good relationship, it will go on forever.”

The lighting project that Marr will contribute to will focus on illuminating the Core Trail from the Ninth Street Bridge to Howelsen Hill. Parks and Recreation Director Angela Cosby said the lighting would be a joint project between public safety, parks and recreation and public works.

To reach Lisa Schlichtman, call 970-871-4221, email lschlichtman@SteamboatPilot.com or follow her on Twitter @lschlichtman.