Council to consider Iron Horse sale on Tuesday
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The Steamboat Springs City Council meeting starts at 5 p.m. in Citizens Hall.
Steamboat Springs — The Steamboat Springs City Council on Tuesday will consider selling the Iron Horse Inn for $3.05 million to a pair of real estate buyers who want to renovate the property and maintain it as workforce housing.
“I think it will be good to dispose of this asset and turn it over to somebody who appears will move forward with the original intent of the property in terms of workforce housing,” Council President Bart Kounovsky said. “I think it’s good for the city to get out of that business. I don’t think the city should be in the business of running its own stock of workforce housing.”
Jon Sanders and Brandon Dardanis, of Ski Town Commercial, said Monday they see an opportunity to turn the aging property into a “gem,” while allowing existing tenants to stay if they want.
“We don’t want anyone to leave,” Dardanis said.
Sanders and Dardanis are part of a team of investors who want to buy, renovate and manage the property.
The buyers would pay a $400,000 escrow as part of the purchase that would be dedicated to public benefit projects on and around the property.
In their proposal, the buyers included such possibilities as an extension to the Yampa River Core Trail and public seating areas along the river.
Overall, the buyers said their investment plan calls for at least $1.3 million worth of improvements on and around the property after the purchase.
The proposal also includes a community tube launching area on the river and an outdoor cafe in a later phase of the project.
Dardanis said the property is in need of a face lift and it would benefit from the new investments and management.
Rooms could be renovated when tenants move out and turn over.
Both buildings on the property would continue to be used as workforce housing, with one offering studio apartments and the other accommodating workers in a dormitory-style building.
The buyers say they already have been in contact with three of the largest employers in town about leasing rooms for their employees.
The city also would reserve rooms for the winter season for its employees.
The now-defunct hotel building on the property recently was leased out by the Sheraton Steamboat Resort for its seasonal workers.
“It is currently and it will remain workforce housing,” Dardanis said. “We can’t stress that enough.”
He said rents would be raised after improvements are made.
In the long run, he said, the rates the city has been charging will not be sustainable for the property.
The council will consider a first reading of the sale Tuesday.
The proposed closing date on the sale is in December.
The city took on $5.3 million in debt to purchase and renovate the property in 2007.
In 2012, the city closed the overnight hotel portion of the property because it was losing money.
The city still owes $4.9 million on the property and will pay about $475,000 annually on it through 2032, unless it chooses to refinance or pay off all the debt in 2018 for $4.3 million.
Other proposals not public
The city council earlier this year decided to accept bids and proposals for the property, which has become a financial liability for the city.
After reviewing eight real estate proposals for the Iron Horse in multiple closed-door sessions, City Council last month voted to have Kounovsky and councilman Kenny Reisman meet with Ski Town Commercial and another finalist to discuss their best and final offers.
The council has held all its discussions about the real estate proposals for the Iron Horse in the executive sessions.
Citing its public records policy for purchase proposals, the city administration again on Monday denied a request from Steamboat Today to review all the Iron Horse proposals, which have not yet been made public.
Kounovsky said Monday he and Reisman, along with city staff, selected the Ski Town Commercial proposal to bring back to the entire council for consideration.
“I liked the price, and I liked the $400,000 in public benefit, and I liked that they are going to work with the workforce housing component of it,” Kounovsky said. “It will hopefully fulfill the intent of when the city bought the property for workforce type housing.”
The sale, does not bind the buyers to workforce housing, but Sanders and Dardanis said they were dedicated to that plan.
Kounovsky acknowledged he thought the public would be interested in learning what other proposals the council considered for the property, but added he did not think he could legally discuss the other proposals.
Anne Small, the city’s director of general services, said the purchase proposal from Ski Town Commercial was the highest bid the city received for the property.
She said the city’s policy is not to make a real estate proposal or bid public before a sale contract has been awarded.
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