Is it a hotel or a home?

Steamboat Grand owners battle commercial tax designation

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— When is a hotel not a hotel? The Routt County Board of Commissioners will have a chance to ponder that question this year when, acting as the County Board of Equalization, commissioners hear a property tax appeal from the Steamboat Grand Resort Hotel Condominium Association.

County Assessor Amy Williams directed her staff to appraise the condominium units at the Steamboat Grand as commercial property rather than residential property. Along with the commercial designation comes a higher tax rate about three times higher, and Chris Diamond, president of the condominium association, says that's not right.

"This classification is bad for property owners, bad for the economy of Routt County and has no basis in current law," Diamond said. "We intend to fight this vigorously."

Williams says she wouldn't feel like she had met her statutory obligation to fairly equalize the tax burden for all property owners in Routt County if she appraised the Steamboat Grand as anything but commercial property.

The appeal is being filed by a consortium of owners that includes all owners of quarter shares at the "Steamboat Grand Resort Hotel Condominium, the Steamboat Grand Resort Hotel Condominium Association Inc. and Grand Summit Resort Properties Inc.

The Steamboat Grand is commonly referred to by its owners as a hotel. However, it differs from many hotels in that its "rooms" have floor plans that are more like condominiums than traditional hotel rooms for example they have full kitchens.

Grand Summit Resort Properties, Inc. sells interval ownership in the condominiums on a quarter-share business to individual owners. The owners have the right to visit the condominium one week in four, and also have the option of turning the available nights back to the management for short-term rentals.

Teh Steamboat Grand is 51 percent sold according to senior executives at American Skiing Company.

They said during a conference call this week they've experienced a high rate of quarter-share owners turning their available nights over to management for short-term rentals.

The units even offer the option of locking off one bedroom in the condominium so it can only be entered through a second hallway entrance. That gives management the flexibility to rent single, traditional hotel rooms.

The Steamboat Grand is platted as a condominium project.

Diamond is president of the Steamboat Ski Area as well as president of the condominium association.

The ski area and the Steamboat Grand are both under the ownership of the American Skiing Company.

Diamond says under the law, the Steamboat Grand Hotel does not meet the legal definition of a hotel.

"According to current law," he said, to be classified as a commercial property, a property must meet the definition of a hotel or motel."

That definition includes establishments which are primarily engaged in providing lodging, camping or personal care or health facilities and which are predominately used on an overnight or weekly basis, he added.

"Clearly, our properties do not meet that legal definition," Diamond said. "These are secondary residences, including time condominiums, time-share units and homes, and their owners use them as they see fit."

Williams said she is unconcerned with the ownership structure of the Steamboat Grand or how it is platted. Instead, she is focused solely on how the property is used. That's what the law requires her to do, she said.

"They take the position that I must appraise them as residential because it was platted as a condominium," Williams said. "My point is, ownership doesn't make a difference it's not about whether it's a time-share, and it's not how it's platted, it's all about how they're being used."

Williams said it seems clear to her that the Stemaboat Grand, with restaurants, concierge, conference center and room service, among other qualities, is being operated as a hotel. She referred to a position paper prepared by the Colorado Hotel and Lodging Association in 1992 to help make up her mind about whether the Steamboat Grand operates a hotel or a condominium complex.

Diamond cites Ilene Kamsler, executive director of the Colorado Hotel and Lodging Association, who said, "We represent the hotels, and Steamboat Grand simply doesn't fit the definition."

Williams said there are plenty of examples of commercial condominiums in town, and lots of examples of structures on Oak Street that were originally built as single family homes, that are now being used for commercial purposes for example chiropractic offices and law offices.

For public consumption, the Steamboat Ski Area describes the Steamboat Grand as a full-service hotel. A press release in the ski area's winter press kit notes that

"The Steamboat Grand Hotel features 328 guest room accommodations including hotel rooms, and three-bedroom suites and eight penthouses (the penthouses aren't yet completed). All guest rooms include color TV; movies/video games on demand, (etc.)"

In the same press release, Diamond is quoted as saying: "The Steamboat Grand Resort Hotel and Conference Center has introduced the grand resort hotel tradition to Steamboat, where the hotel is a destination taking care of guests' every whim and need, from arrival through departure."

Diamond said this week the resort contends that if the commercial classification imposed on the Steamboat Grand by Williams' office stands, every property in Routt County that is rented, even those rented for a single day each year, would have to be classified as commercial property.

Referring to a case heard in Eagle County District Court establishes precedence in cases of this nature. The court found in favor of Apollo Park AT Vail Condominiums in 1991.

Another similar case in Routt County involving Christie Club condominiums is pending a second level of appeal.

The county commissioners, acting as the County Board of Equalization, upheld Williams' application of a commercial classification.

The development's legal representatives have the option of appealing to district court, the state Board of Assessment appeal (two hearing officers appointed by the governor's office), or taking the case to arbitration.

Should the Board of Equalization uphold Williams classification in the case of the Steamboat Grand, the appellants would have the same three options, Williams said.

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