Steamboat Springs — The Steamboat Springs City Council on Tuesday night agreed to take the first step toward a potential annexation of a new series of neighborhoods in west Steamboat springs.

But an extended quibble over the developer’s proposal to pay the city up to $10,000 for city staff’s work on the annexation planning was a sign that some of the bigger issues, such as water supply and other infrastructure, might not be a breeze for the council to solve in the coming months.

David O’Neil, of Brynn Grey Partners, said his real estate firm would not move forward with the potential development and annexation planning if the council would not agree to the $10,000 reimbursement proposal for staff time.

He said he wanted the council and the city to “put some skin in the game” and show excitement for the potential project by agreeing to potentially accept that city staff might have to do more work on the project than the $10,000 would cover.

A majority of the council was in favor of moving forward, but some had concerns that staff time might exceed the $10,000.

City officials on Tuesday night couldn’t answer definitively how much time it will take staff to work on the project.

After a lengthy discussion and debate over whether the $10,000 was too high or too low, the council ultimately voted, 4-3, to agree to the non-binding memorandum of understanding with Brynn Grey.

Even council members Kathi Meyer, Tony Connell and Heather Sloop. who voted against the MOU, ultimately wanted to move forward, but they wanted tweaks to the agreement.

Before the approval came, Council President Walter Magill appeared disappointed with how long it took the council to move forward with the proposal.

“We’ve got a good opportunity here, and we’ve been waiting for years for the West of Steamboat Plan,” Magill said. “Let’s get a motion. I can’t believe we spent an hour on this.”

The city estimates the $10,000 will cover 190 hours of staff time.

Councilwoman Kathi Meyer predicted the city would be a “big partner” with Brynn Grey.

The approval also came after the council heard mostly support for the proposed projects from members of the community.

Brynn Grey’s revised annexation concept would create a new neighborhood for locals on the west end of town, complete with space for a new elementary school, commercial spaces and a grocery store.

The developers have changed their proposal to a smaller phased annexation, a concept city elected officials appear to favor over a larger annexation of the entire former Steamboat 700 parcel.

In Phase 1, the proposed annexation area now includes about 400 housing units in three neighborhoods that would also encompass open space and trails.

The neighborhoods would host a mix of housing types, including duplexes and townhomes.

The developers will return to Citizens Hall in January to discuss how they plan to address the water needs of the new neighborhoods.

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