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Iron Horse Inn once again a source of controversy in Steamboat Springs

Scott Franz
The city's new easement on the Iron Horse property will guarantee permanent access to the Yampa River from land between the Yampa River Core Trail and the river bank. The easement covers about 440 feet of river frontage.
Scott Franz

— The city of Steamboat Springs’ decision to give the new owners of the Iron Horse $267,000 for providing public access to the Yampa River isn’t sitting well with a former city councilwoman and some community members.

Sonja Macys, who served on the council when the city sold the Iron Horse, said the developers who purchased the property last year implied that public river access was included at no cost to the city when they pitched the council plans for a community tubing launch point, a café and public parks on the property.

The new owners paid $2.65 million for the property, plus $400,000 that was put in an escrow account for public improvements.

Macys had strong words for the developer when she heard the city agreed to spend more than half of the money in a public benefit escrow account to purchase an easement on the property for 440-linear feet of river access the city owned before the sale last year.

Macys labeled the transaction as “the latest insult in a long string of insults” at the Iron Horse property.

“To me it does sound like a bunch of garbage,” she said. “It’s definitely not appropriate what they are trying to do.”

Other council members interviewed Tuesday said the prospect of having the city pay for an access easement on the property wasn’t raised when the sale was being considered.

Some community members are starting to question why the city didn’t try to hold onto a river access easement when it sold the property to avoid the high price of having to get the access back.

Macys was the lone council member to oppose the sale of the Iron Horse.

Before she knew that the purchase of an easement for $267,000 was a done deal, she said she planned to encourage current city council members to challenge the proposal.

City Manager Gary Suiter said Tuesday afternoon the deal has been finalized and won’t be sent to the council for final approval.

“It just seems practically criminal to charge the city for an access easement,” Macys said. “I can tell you we were sold on the idea that a park and access were going to be provided as a benefit, and the (public benefit escrow money was going to do more public benefits.) This is a double dip, and it’s bogus.”

Asked to react to the plan to spend more than half of the escrow money on the easement, former City Council President Bart Kounovsky deferred and said the former council purposefully left it to a new council to make the decision.

In addition to the easement, the $400,000 in public benefit escrow money will be spent on landscaping at the property as well as such items as public park benches, picnic tables and bike racks on the property,

Council members Tony Connell and Robin Crossan helped city staff negotiate the plan for how to spend the escrow money.

Connell praised the deal on Tuesday.

He noted the drawings that the owner, SwedProperty LLC, presented to the council showing the tubing launch point and parks were only conceptual, and the city was not guaranteed the river access in the future.

“We sold the property as is to get the highest and best value,” Connell said.

Had the city tried to make an easement on the river bank part of the sale, the city would not have gotten as much money as it did for the property, Connell said.

“I like the outcome that has happened,” Connell said. “The public benefits both from the housing (being updated at the Iron Horse) and having a perpetual easement that can’t be shut down on a whim, or when the market changes.”

The escrow money became controversial earlier this year when the new Iron Horse owners proposed spending a large portion of the public benefit money on a roof repair, new appliances and lighting fixtures.

The council rejected that plan, saying the items were deferred maintenance items the developer should pay for, not public improvements that would benefit the community.

Under the terms of the contract, if the council and the developers could not come to an agreement about how the funds should be spent, an arbitrator would be called in to settle the dispute.

“The simplest way to describe it is it was a negotiated settlement,” Suiter said of the plan to spend the escrow money on the easement. “My instincts told me not everyone would be happy with this, and some would be critical. I’m not surprised to hear criticism. But the easement needed to be legalized and secured.”

Asked how the city arrived at $267,000 for the easement, Suiter said the price was negotiated.

He said the city and the owners provided comparables, and they were all over the map.

“You could make cases either way for it being worth more or less,” he said.

Reached Tuesday, Iron Horse co-owner Jon Sanders agreed to an interview at 4 p.m.

After answering the phone, Sanders asked the Steamboat Today to hold on for a moment and then the phone connection cut out.

Two calls placed to Sanders’ cell phone after the disconnect were not returned.

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


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