Steamboat base area group optimistic about summer work
Committee supports partial construction plan as city prepares financial options
May 14, 2010
Steamboat Springs — Construction plans and financing options are taking shape for this summer's redevelopment work at the base of Steamboat Ski Area.
But that shape has some fuzzy edges.
The committee guiding redevelopment at the base of Steamboat Ski Area supported a partial plan Thursday for this summer's work. The Urban Redevelopment Area Advisory Committee voted unanimously to recommend about $2.2 million in spending on earthwork, utilities, a temporary gravel trail, snowmelt mains and other items that would provide few public amenities but would set the stage for future, more aesthetically appealing work when funding is available.
That availability could occur later this summer, or sooner, or not at all, depending on Steamboat Springs City Council action scheduled for Tuesday night. The City Council acts as the Steamboat Springs Redevelopment Authority, which administers the base area redevelopment.
City Council voted last week to release $2.5 million in funding for base area work this summer. That vote followed lengthy city negotiations with U.S. Bank, which issued the city a default notice in April on its $17.5 million redevelopment loan. Last week, the bank removed the default conditions and agreed to the immediate use of $2.5 million, provided that the remainder of this year's funds, also about $2.5 million, be held in a construction account.
In the wake of that agreement, the city is continuing negotiations with U.S. Bank and exploring other financial options that could allow completion of the full $4.5 million base area project planned for this year.
That project includes partial construction of a public promenade, the daylighting of Burgess Creek and installation of numerous amenities such as seating areas, stone walls and fire features.
Few of those amenities are in the plan URAAC approved Thursday. The committee considered, but declined to support, a nearly $2.5 million plan that includes more public features and visual appeal. That plan would create a more finished product that could suffice for a few years if funding stalls, but it also would require the removal of some of the work — and additional costs — to go back and complete the project in future years.
The committee supported the $2.2 million plan because it would have no such additional costs and would set the stage for continued work when funding allows.
"There's not much, if we stop at this point, of what you see on the surface," redevelopment coordinator Joe Kracum said. "But all the hard work is done."
URAAC co-chairman David Baldinger Jr. said supporting the $2.2 million plan would "send a strong message" to City Council that URAAC is confident in base area revenue streams and ready to move forward with the full $4.5 million project this year.
City Finance Director Debra Hinsvark showed the committee revenue and debt projections through 2029, in various financing scenarios. All scenarios assumed a 30 percent drop in base area property values in 2012, three additional 5 percent drops, no new construction, no sales tax revenues and no economic recovery.
In two of the four scenarios presented, base area revenues were greater than debt payments in every year through 2029. In a projection that assumes new construction, including the completion of Ski Time Square and Thunderhead Lodge in 2019, revenues are about $1 million greater than debt payments every year from 2020 to 2029, varying somewhat in each financing scenario.
"The numbers really do prove out that financing is capable in the current market," Hinsvark said. "The market is the market, and you can't predict it … (but) if we were in the market today with one of these transactions, we would be fine."
Hinsvark plans to present the numbers to City Council on Tuesday.
City Manager Jon Roberts said City Council's options include everything from postponing any base area work beyond the $2.5 million allocated for this year, to allowing Duckels Construction to immediately proceed with the full $4.5 million project this summer. Hinsvark said the city could transfer funds from reserves to fulfill that contract, then repay the funds when a new financing plan is in place.
"Whatever (council members) choose to do, we're happy to do it and move forward as quickly as possible," she said.
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