City Council bucks developers’ Iron Horse spending proposal |

City Council bucks developers’ Iron Horse spending proposal

The $3 million purchase price for the Iron Horse included a $400,000 escrow to be used for public improvements, such as public seating areas and a Yampa River Core Trail extension.
Courtesy Photo

— The Steamboat Springs City Council on Tuesday unanimously rejected a request from the developers of the Iron Horse Inn to spend funds from a public improvement escrow account on such things as a roof repair, lighting fixtures and energy-efficient appliances at the city’s former property.

The council felt many of the items in the developers’ proposal were deferred maintenance items the developer should pay for, not public improvements that would benefit the community.

“I would have to be paying rent to get in there and enjoy some of these (public) improvements,” Council President Walter Magill said. “Public improvement funds to be used on interiors and roof repairs was not envisioned in the original agreement.”

Jon Sanders and Brandon Dardanis, of Ski Town Commercial, pitched the spending plan as a way to improve the property and keep it as workforce housing.

But the council pushed back on the notion that interior and exterior renovations stood to benefit the entire community. They also noted there was no guarantee that the property would remain an affordable home for seasonal and other workers in the community.

Council members said they were open to spending the funds in the $400,000 escrow account on such things as bike racks, Yampa River Core Trail improvements and other items the general public could use.

The council’s decision to reject the spending plan came after some community members warned the council they would tarnish their reputation if they agreed to spend public improvement funds on items many didn’t view as public improvements.

“To give $200,000 for deferred maintenance expenses … on the roof, the parking lot and the interior of the buildings, that’s not a public benefit,” Bill Jameson told the council.

Former City Councilwoman Sonja Macys, who sat on the council when the city sold the Iron Horse in December, also said the council should dismiss the developers’ request for money to cover routine maintenance items.

“In short, it seems that the clear and simple public benefit items are benches, bike racks and outside fireplace, assuming that is open to the public,” she wrote. “The riverbank access and Core Trail could also be of good value for the public and these were the types of benefits that were pitched to the Council who decided to sell the Iron Horse.”

She also noted she has heard the Iron Horse is no longer the affordable living environment it had been for some community members prior to the sale.

She said she had heard in recent months from three people that the prices at the Iron Horse had gone up significantly.

“If this is going to be proposed as a public benefit, the public needs to know how the cost savings will be passed on to renters, particularly those seeking affordable housing,” she wrote.

Some units at the Iron Horse, which were once deemed affordable, have had higher rents in recent months after renovations.

In mid-March, a studio unit at the Iron Horse was being advertised as a “downtown studio” for $900 per month, not including utilities. Before the sale and renovation of the building, the city had been renting studio units for $650 per month, with all utilities, cable and internet included.

Macys warned the council that taxpayers have paid the price three times for the Iron Horse already.

“Let’s not have them do it again,” she wrote.

The city sold the Iron Horse to Ski Town Commercial last year for $2.6 million plus the $400,000 public improvement escrow.

City Manager Gary Suiter had recommended approval of the developers’ public improvement spending proposal. Saying seasonal housing is challenging to develop and support in mountain resort communities, he felt the spending plan could have benefited the city.

He also said he had the power to release the escrow funds without council authorization per the terms of the real estate contract, but he believed it would be best to let the elected officials decide.

“I would have gotten in some trouble” if I didn’t, he said after the council made it clear they weren’t supportive of many of the items on the developers’ list.

The council told the developers to come back with a more detailed spending proposal that did not include the maintenance items.

The developers suggested they might instead pitch using the escrow funds on an outdoor café.

To reach Scott Franz, call 970-871-4210, email or follow him on Twitter @ScottFranz10

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