Big changes underway at Iron Horse Inn
The Iron Horse Inn will soon have a new name, new interiors, new landscaping, faster Internet and higher rents.
The newer building on the property, which the city recently sold for $2.6 million and a $400,000 escrow for public improvements, is being spruced up to serve as more appealing dormitory-style housing for seasonal workers.
Jon Sanders, of Ski Town Commercial, which purchased the property, said new kitchenettes will be added, in addition to interior and exterior renovations and landscaping work.
There will also be a community room.
“We’re going to make this more of a place where people want to live and hang out,” Sanders said.
In order to move forward with the changes, the buyers will need to have a change of use approved by the city.
There are also changes in store for the older building, which houses 26 studio apartments.
As tenants move out of these units, they will see interior renovations.
The rents are also being raised significantly from $700 per month, including utilities.
In mid-March, one of the units at the Iron Horse was advertised for $900 per month as a downtown studio.
With utilities, the cost was estimated to run $1,100 to $1,200 per month.
“We’re investing a lot of money into this, and you have to be able to recoup your money at some point,” Sanders said.
Sanders said rents have not been raised for the tenants who remain in the units, but acknowledged that won’t be the case forever.
“We’re not in a hurry to go and do all of the apartment building at once,” he said.
Sanders said he is in discussions with one tenant who was worried about potential rent increases about a possible trade for him to work on the property in exchange for a rent reduction.
Tenant Jeff O’Neill, who was critical of the city’s decision to sell the property, said Tuesday he was not surprised the new owners are raising rents.
“They’re going to make a lot of money off this place,” he said. “I don’t know why the city isn’t up in arms about this. This could have been an income-producing asset” for the city.
O’Neill said he felt the city should have found someone to manage the property while still retaining control of it.
Now, he said, the increasing rents will force out a class of workers like himself, who have been living in the studio apartments for years but cannot afford a significant rent increase.
In August, the Iron Horse housed bus drivers, housekeepers, personal trainers, DJs, hospital employees and landscapers, among others.
The property also had a long waiting list.
Before the sale, Sanders said the rent the city was charging for the property was not sustainable, and changes would need to be made.
The plans at the property eventually call for a possible bike-in cafe near the Yampa River Core Trail.
When it sold the property, City Council members suggested part of the proceeds from the sale could be used to pay down the debt on the property and take advantage of other potential affordable housing opportunities.
They saw the deal with Ski Town Commercial as the best option for the property after considering a total of eight proposals.
A city council in 2007 issued $5.3 million in debt to purchase and renovate the Iron Horse to provide workforce housing for city employees and other local workers.
The city still owes $4.785 million on the property and will pay about $475,000 annually on it through 2032, unless it chooses to refinance or pay off the debt in 2018 for $4.3 million.
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