Cari Hermacinski and Jon Quinn: Decision made in secret
“The next council came along and had other ideas,” Ivancie said Friday. “They took the money we had intended for rehabilitation of the property and put it elsewhere, and, therefore, they just didn’t take care of it. They didn’t take care of the investment, and you have what you have right now.” — former Steamboat Springs City Councilman Steve Ivancie, regarding the Iron Horse Inn, Steamboat Today, October 23, 2015.
In August 2007, Mr. Ivancie’s Steamboat Springs City Council borrowed $5,300,000 to purchase the Iron Horse Inn. The $5,300,000 was comprised of the $4,050,000 purchase price, $1,000,000 for future improvements and $250,000 for fees to underwriters.
The City Council voted to borrow $5,300,000 to purchase the Iron Horse after conducting all meetings on the topic in secret session.
The loan included a provision that required a minimum $1,500,000 prepayment penalty if the loan was paid off before 2018.
Borrowing money without a vote for residents is a violation of the Taxpayer Bill of Rights (TABOR). Mr. Ivancie’s city council avoided a vote by creating a shell entity called the Steamboat Springs Building Corporation.
In November 2007, a landslide election replaced five of the seven city council members. The only two members of the Iron Horse city council that remained were either not up for re-election or
The newly elected council acted quickly to limit losses to the residents of Steamboat Springs. We used approximately $100,000 of the $1,000,000 borrowed for renovations to make improvements to the building, such as fixing dangerous electrical wiring and repairing leaking roofs, which would preserve the asset and address life and safety issues. The remainder of the $1,000,000 was put into escrow for debt servicing.
Since Mr. Ivancie’s Iron Horse city council voted, after a series of secret meetings, to borrow $5,300,000 in violation of the spirit of TABOR, the residents of Steamboat Springs have been on the hook for more than $2,000,000 in interest alone. By the time the debt is retired in 2032 — it will not be fully extinguished with a sale of the Iron Horse because the collateralization was moved to other city assets — it will have cost city taxpayers more than $10,000,000.
The decision made by Mr. Ivancie’s Iron Horse city council has stymied every city council since 2007 and will continue to do so until the debt is retired in 2032. The investment has been financially disastrous and has diminished the ability of the city to address many issues including affordable housing.
former city council president
former city council president pro-term
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STEAMBOAT SPRINGS — When it comes to people complying with COVID-19 quarantines, Routt County Director of Public Health Roberta Smith said the response has been variable.