Steamboat Springs City Council passed an ordinance to annex Brown Ranch during a marathon meeting that began Tuesday.

After more than five hours of discussion, public comments, questions to city staff and, at times, heated back and forth between council members, the ordinance passed 4-3 in the early morning hours Wednesday.

Council members Joella West, Dakotah McGinlay, Michael Buccino and Gail Garey voted to approve the annexation outright. Ed Briones, Heather Sloop and Robin Crossan voted against the annexation after stating their preference that it be sent to voters.

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At first reading of the annexation ordinance last week, a 4-3 vote approved the agreement with a stipulation that it be voted on in a referendum scheduled for next June.

The difference in the first and second readings came with West switching her vote based, in part, on updated information provided by the city’s finance director that addressed a projected $52 million funding gap facing the city over the 20-year lifespan of the project.

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“At this point, I don’t feel as compelled to send it to voters because I think we have done quite a bit by way of addressing the funding gap, and that is what caused me to say originally we need to have the community vote on this,” West said.

If completed, the development would see the construction of 2,264 affordable housing units built on 420-acres of land purchased by the Yampa Valley Housing Authority in 2021 with a $24 million anonymous donation.

During the more than 10-month Brown Ranch annexation negotiations with the housing authority, council members frequently discussed the implications of removing the anticipated costs for the construction of two community parks, but that did not necessarily impact the city’s more than $52 million projected funding gap.

On Nov. 7, voters will decide on ballot question 2I, which would direct 75% of the city’s short-term rental tax revenues to the housing authority to fund most of the Brown Ranch project. Should the ballot question fail next month, future council members would need to decide how to fund the project on an annual basis.

Based on the proposed ballot language, Steamboat Springs Finance Director Kim Weber told City Council the initial assumption was that short-term rental funds allocated to the city for Brown Ranch could not then be used for U.S. Highway 40 improvements because that work is not directly related to affordable housing.

As a result, if funding for the parks, or a park, were removed from the equation, the finance director could not just then allocate that money toward the highway work, meaning funding would need to be drawn from the city’s capital budget improvements.

“That’s no longer the case,” Weber said.

“The ballot language refers to the development of affordable housing, so providing better transportation services to existing housing in another community maybe is a bit of a stretch, but the ballot language permits STR funds for infrastructure that is associated with affordable or attainable housing,” City Attorney Dan Foote said. “I think that means that if there is a Brown Ranch project, any infrastructure that serves Brown Ranch regardless of whether or not it’s denominated as the city’s share or a YVHA share, I think any of that infrastructure is eligible for funding with the short-term rental tax funding revenues.”

With the shift in funding assumptions, Weber explained that if city’s short-term tax revenue came in at $13 million per year and the city dedicated its share of those funds to Brown Ranch while removing the construction cost of the second community park, the city’s projected gap would drop to $9.9 million by 2044, but the initial phase of the project would be fully funded through 2040.

Removing the construction costs of both community parks — anticipated to cover a combined 39.6 acres at $1.3 million per acre — would balance the city’s budget throughout the project’s 20-year lifespan.

Council member Heather Sloop questioned Parks and Recreation Director Angela Cosby on what the sacrifice of one or both community parks would mean when it comes to providing the entire Steamboat community adequate park space for recreation.

“Our fields are currently over utilized,” Cosby replied. “Any growth in our community, no matter what size, in order to provide a similar level of services that we do right now, we need to increase our capacity.”

Cosby added that removing funding for community parks would leave the area designated as open space but, “There’s not going to be this green open space that is envisioned, and the homes there primarily don’t have any outdoor personal spaces; most homes will not have yards.”

Cosby noted Bear River Park would be the closest park with amenities.

“So, we are discussing approving a large urban development without green space and then we are slowly converting what was proposed as parks into open space that won’t have amenities for the community to play on.”

West explained her reluctant decision to change her vote from sending the annexation ordinance to a referendum to supporting its approval outright by a council decision.

“I believe we are beginning to address the issues of a funding gap, not in a way I like; I don’t like it at all,” West said. “I am prepared to say, with a great sigh, that if we lose the parks that we believe the community at Brown Ranch deserves but that is the only way we can in good conscience go forward with the project, so be it. I hate it, but so be it.”

Before making her decision, West said she was contacted by Gov. Jared Polis ahead of the meeting about Brown Ranch to express the importance of moving Brown Ranch forward as a model for affordable housing in the state.

Pointing to the governor’s 2021 visit to the city after the housing authority purchased Brown Ranch, she said, “It is still very important to him, so anything we can do to facilitate that would be great.”

Council member Heather Sloop also said she received a call from Polis before Tuesday’s meeting. Unmoved by the governor’s appeal, Sloop asserted her vote to send the annexation ordinance to voters before making a last-ditch effort to downsize the scale of the project and its fiscal impact.

“My proposition is to this council to do 1,100 minimum housing (units) today,” Sloop said. “It is a win to the governor’s office; he is getting his housing.”

Foote interjected over the suggestion, which failed to gain majority support.

“That’s impractical,” he said. “That’s not something you can do in an hour at 1:15 a.m.”

Responding to a request for comment, a spokesperson with the governor’s office applauded City Council but did not confirm the phone calls.

“Gov. Polis is thrilled by Steamboat City Council’s decision to move forward with the Brown Ranch housing project and has passionately followed this process since he visited the land with Sen. Dylan Roberts and local officials where these homes will be built,” the spokesperson said via email Wednesday night.

The spokesperson added that Polis supports efforts to increase opportunities for housing construction across the state — including at Brown Ranch — and wants to thank council members, the Yampa Valley Housing Authority and the Brown Ranch advisory board “for their thoughtful work and partnership on addressing the housing challenges in Steamboat Springs and the region, and the members of the community who participated in the process.”

“Gov. Polis is working to ensure more Coloradans can find a home they can actually afford in all corners of Colorado,” the spokesperson continued. “He also looks forward to helping Brown Ranch be able to fully participate in state funding however he can.”

Despite the council’s approval of the annexation ordinance this week, the matter could still be put to a voter referendum if a successful citizens’ petition with 1,125 signatures of registered voters is filed within 30 days of the decision.

Steamboat resident David Epstein said he and a group of five are working on a campaign to collect the necessary signatures for the petition.

“We have to form a committee, which we essentially already have, and then we just have to register that,” Epstein said. “It’s not like we are against Brown Ranch and affordable housing; it’s just the size and scope of the project.”

West agreed with Sloop that downsizing the Brown Ranch project could effectively eliminate much of its opposition but said the housing authority has consistently opposed that suggestion.

Recognizing the prospect of a citizens’ petition against the housing authority’s unwillingness to scale back, West said approving the development in its current form would effectively be, “a cast of the dice.”

“If we are all wrong, this could kill (the) project, and that is my concern right now,” she said. “But if I say no, then we are left with a proposal that is not palatable to the housing authority, so we get nowhere.”

Editor’s note: A previous version of this article stated council member Heather Sloop received a call from Gov. Jared Polis ahead of the annexation vote who stated his support for the project. Sloop in fact received a call from the Colorado Department of Transportation commissioner for District 6, Rick Ridder, who was appointed by Polis in August.