City agrees to sponsor low-cost loan for fitness center’s land purchase
Steamboat Springs — Steamboat Springs City Council has agreed to act as a “government sponsor” for a bank-qualified, $500,000 tax-exempt loan being sought by the Steamboat Springs Health and Recreation Association.
The city will not incur any debt, nor be responsible for any debt, in the process known as a “conduit loan,” city Finance Director Karen Feeney said.
The city’s involvement is necessary in order for the nonprofit health association to access the loan. It will be used to finance the purchase of the mobile home park at Third Street and Fish Creek Falls Road.
Health and recreation association President Jill Leary said the special financing will save her organization a significant amount of money that would have gone to interest payments. The loan is being arranged through Norwest Bank with the help of its public finance department in Denver. Leary also is an officer of the local bank.
“A requirement of the public finance department is that the Health and Rec, being a non-profit organization, must be sponsored by a public entity to secure financing,” Leary wrote in a March 29 letter to City Council. “This type of financing would be very advantageous for us, as it would save us approximately $13,000 in interest per year. Savings of this magnitude would help ensure that membership fees stay affordable for residents of our community.”
This marks the second time the city has agreed to sponsor conduit financing. The first time, in 1983, it also was to help the health and recreation association. Feeney told City Council that the city has declined similar requests from other businesses in the past.
City Councilman Bud Romberg is a longtime member of the health and recreation board. He stepped down from the discussion and vote on the financing proposal. Also stepping down was Councilman Ken Brenner, whose business is a tenant in the health and recreation center building.
Romberg said the intent behind the purchase of the mobile home park, located roughly behind the fitness center, is to allow for new parking. But that doesn’t mean the mobile home park itself will become a parking lot. One option being discussed is moving the center’s existing tennis courts to the new property, thereby creating more room in front of the existing swimming pool, hot springs and exercise facilities. The board has even discussed whether it might need to build a pedestrian underpass or overpass across Fish Creek Falls Road, to reach the new property. But any decision on those and related issues issues is “way down the road,” Romberg said.
Romberg, a former city planning commissioner, said he does not believe the city’s agreement to sponsor the financing amounts to a tacit approval of any development permit the health and recreation association might seek in the future. Nor should it seem to compromise the planning process, he said.
“I don’t think this says the city and health and rec are in bed together,” Romberg said. “If the city wants to develop anything on its own property, it has to go through the Planning Commission anyway,” Romberg said. “This simply allows health and rec to qualify for lower rate financing than it would otherwise. Health and rec, for the 30 years I’ve been on its board, has served a function, if it wasn’t there, the city would have to fill.”
None of the city’s credibility, fiscal or otherwise, is on the line because of its willingness to sponsor the financing, Romberg said.
“The city is not on the hook for the money; health and rec is,” he said.
— To reach Tom Ross call 871-4210, or e-mail email@example.com
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