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Future of West Steamboat Neighborhoods annexation still unclear

Artist rendering of Brynn Grey's Gateway Neighborhood, one of three neighborhoods slated for Steamboat's west side.
Brynn Grey Partners/courtesy

STEAMBOAT SPRINGS — The status of the West Steamboat Neighborhoods annexation remains in limbo, though the developer has reportedly secured an agreement to purchase approximately 191 acres in west Steamboat Springs from Steamboat 700.

According to David O’Neil and Melissa Sherburne, with Brynn Grey Partners, a fully executed purchase and sale agreement and related promissory notes and deeds of trust are in escrow with Land Title. They alerted Steamboat Springs City Council to the arrangement in a Dec. 10, 2019, letter after missing the Nov. 12, 2019, deadline to purchase property, which was part of the annexation agreement.

By missing that deadline, the existing annexation agreement and annexation ordinance expired, and council will now have to adopt a new annexation ordinance if they wish to proceed with the West Steamboat Neighborhoods annexation.

City Council has not formally made a decision about the future of the annexation agreement.

According to the Tuesday, Jan. 7, council meeting agenda, City Attorney Dan Foote is scheduled to give an update on West Steamboat Neighborhood, but there is no specific agenda item dedicated to a report from the developers.

“I am not going to recommend council take this up again until we have written confirmation that the bank is willing to consent to the amendment and re-execution of the annexation agreement,” Foote said in an email. “If council chooses to take up the annexation again, I will be recommending that council proceed by adopting a new ordinance, which would be subject to a referendum petition.” 

‘So what happened?’

O’Neil and Sherburne said the missed property purchase deadline was due to several factors.

One reason they cited was an “internal shift” within Steamboat 700 in October 2019 that resulted in a leadership change at the same time Brynn Grey was working to finalize the purchase of the property.

“The new manager had a different vision that was focused exclusively on maximizing the value of investor real estate assets,” O’Neil and Sherburne wrote in the letter to council. “The new manager shocked us by saying S700 (Steamboat 700) was no longer interested in selling the property and instead wanted to create a ‘partnership,’ whereby S700 (Steamboat 700) would have total control over the project.”

At a glance

Steamboat Springs City Council voted Feb. 5, 2019, to annex 191 acres of land west of current city limits between West Acres and Silver Spur north of U.S. Highway 40. Brynn Grey Partners is the developer of the project that proposes 450 housing units — one-third of them deed restricted — over the next 16 to 20 years. In addition to a new school, parks and open space, the project would have commercial, mixed-use and large-format retail areas, which were anticipated to include a day care center and grocery store. Brynn Grey previously developed workforce housing projects in Breckenridge and Frisco.

O’Neil said they could have had an agreement with Steamboat 700 signed by the Nov. 12, 2019, deadline, but it would not have been the right agreement for the community. He said it would have given control of West Steamboat Neighborhoods back to Steamboat 700.

“We deliberately made the decision to let the deadline pass, so that the community didn’t wake up on Nov. 13 with Steamboat 700 as the new developer of West Steamboat Neighborhoods,” O’Neil said. “It was the right decision.”

Sherburne said it was an “intense” month-long process to negotiate a final purchase and sale agreement with Steamboat 700 that gives West Steamboat Neighborhoods full development control of the project as originally intended.

“We ended up with exactly the deal we initially agreed to — nothing has changed except the deadline,” Sherburne said. 

She also reported that Brynn Grey has been “charging on” with the project, meeting with engineers and subcontractors to gear up for construction of the phase one homes.

“Obviously, we don’t give up easily,” Sherburne said. “It’s been over four years to just get to this place. We are as committed to this project as ever.”

O’Neil said he is eager to answer council’s questions about the negotiation and next steps.

“We also want to know, is there a political will to go forward or not?” O’Neil said in an interview last month. “And if the answer is ‘yes,’ there is a straight forward, legal path to amend and ratify the annexation agreement, and if the answer is ‘no,’ then the answer is ‘no.’”

Council President Jason Lacy said council has been waiting to hear back from staff before moving forward with annexation discussions.

“Council wanted staff to have a chance to look at all the documents, ask questions and make sure there were no holes in the proposal (from Brynn Grey),” Lacy said. “As soon as staff has done that, we can put it on the agenda.”

Lacy said council will probably schedule the West Steamboat Neighborhoods discussion as a work session item or a community report at an upcoming council meeting.

“We want to hear from them about what happened, where they are now,” Lacy said. “We won’t be setting the item for first reading.”

To reach Lisa Schlichtman, call 970-871-4221, email lschlichtman@SteamboatPilot.com or follow her on Twitter @lschlichtman.


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