The city of Steamboat Springs will exercise a right of first refusal for an 8-acre U.S. Forest Service property located on Hilltop Parkway with the goal of developing between 80 and 100 workforce housing units on the land.

The Forest Service sent a letter to the city last summer proposing the Hilltop site for the purposes of constructing workforce housing to include between 20 and 25 units dedicated to the agency’s employees.

U.S. Senator Michael Bennet and U.S. Rep. Joe Neguese visited the site last summer to express their support for the project and others like it.

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“We are facing a housing crisis in Colorado — and that is not too strong of a word,” Bennet said during the August visit. “And it is particularly problematic in resort communities.”

The housing project proposed for the Steamboat property is permitted under sections of the 2018 Farm Bill that give the Forest Service authorization to lease underutilized administrative sites for purposes of addressing local housing needs. The bill was set to expire last year before it was extended until this year.

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Council members voted unanimously Tuesday to direct City Manager Gary Suiter to respond to the U.S. Forest Service to assert the city’s first right of refusal.

“The only thing we have to lose right now is staff time, and my only concern and I think it has been addressed, is there is an understanding of what needs to be built there and how that can happen,” said council member Joella West. “I think we have a good idea of that, so let’s go for it.”

The next step will be for the city to work with the Yampa Valley Housing Authority and the federal agency to negotiate a lease agreement that includes a development partner.

The agreement will need to be worked out in a relatively short time to take advantage of funding provided under the Farm Bill before the legislation expires Sept. 30.

The city’s principal planner, Brad Calvert, noted there are other proposed bills that would fund the type-of housing project proposed for the U.S. Forest Service land, “but congressional action in a presidential election year is maybe not something to bank on.”

He said the lease agreement with the federal agency for the land would likely be for 50 years and would be “in-kind,” meaning there would be no cash associated with it.

“There is just a lot of work to do to get to the point where we can develop that lease proposal,” said Calvert, who said any budget appropriations that might be needed this year would become clearer as the project progresses, but would likely not exceed $150,000.

Calvert also said the city is hoping to designate roughly 10 units for its own employees, with the rest designated to meet the demand from the broader community.

Emily Katzman, a development team member for the housing authority, said the Forest Service site represents a unique opportunity to deliver as many as 100 workforce rental units “in a relatively quick time.”

Katzman explained the project would create rental units, but the exact mix of unit sizes and income targets for potential tenants would need to be worked out.

She said private development partners would ultimately propose how to fund the project, but “YVHA has consistently contributed to funding with projects often with the support of the city of Steamboat Springs.”

The city’s decision to claim the first rights of refusal offered by the Forest Service comes a week after officials in Dillon formalized a deal to construct a joint housing project with the federal agency — making it the first housing project of its kind in the country.

Dillon Town Council approved an intergovernmental agreement whereby the town agreed to provide water service and in-town water rates to the housing development, slated to be constructed on an 11-acre Forest Service property.

Under the agreement, the county would provide between $4-5 million to fund the construction of a small roundabout near the site. The county would also contribute $2 million to the town to help build a second, larger roundabout in the area.

The current plans in Dillon call for up to 177 rental units to be constructed at the site and replace aging facilities — with 10 of those units reserved for full-time Forest Service staff and up to 30 beds for seasonal employees. 

The remaining units — which will include one —, two — and three-bedroom apartments — will be rented to county residents making between 80-120% of the area median income. 

Site work for the Dillon project is likely to begin this year, with unit construction beginning in 2025.

“We’re pretty excited about it and happy to partner with Summit County and the Forest Service,” said Dillon Town Manager Nathan Johnson. “We’re hoping this project is not only a great benefit to the town of Dillon, but also Summit County and a model for the whole country as well.”

Summit Daily reporter Robert Tann contributed to this report.