Steamboat Springs The City's agreement with the Steamboat Grand to complete improvements to Mount Werner Circle by the end of the year hinges on the hotel's ability to come up with its $600,000 share of the project.
The city had expected to put out bids in the next three to four weeks and to begin construction by June, but questions over how much of the estimated $682,000 project the hotel is willing to pay could halt that process.
At tonight's meeting, the city council will discuss the Mount Werner Circle improvements and most likely, what will happen if the financially-troubled American Skiing's real estate division, which owns the hotel, will not pay the fee.
Last week, Steamboat Ski Area President Chris Diamond called that $600,000 number unrealistic. Councilman Paul Strong said Monday the city does not have the funds to pick up the tab.
"We don't have the extra $600,000 in our budget to do it for this year," Strong said.
The council approved $100,000 two weeks ago for the road improvement project, but it had also counted on $582,00 from Steamboat Grand.
Strong said that if the money from the Grand is not there, the city could move for an extension that would push back the due date for the circle's improvement.
The planned improvements for this summer extend from the entrance of the parking garage across from the Gondola Transit Center up to the service entrance at Burgess Creek Road.
Plans call for the road to be narrowed to two main lanes from the current four lanes, to add walkways across the street from the Grand and to install pedestrian friendly crossways.
Strong said there are concerns that the Grand would default on its share of the project. If that happens, Strong said, the city could place a lien on the hotel.
However, the city might have to wait in line for its payment.
At the moment, American Skiing Co. sits in deep financial trouble with $300 million in net debt at the end of the second fiscal quarter.
The real estate division, which owns the Steamboat Grand, lost $10.9 million in the last quarter and the resort division lost $31 million.
Councilman Loui Antonucci said last fall the council had discussed with the former vice president of Steamboat Real Estate, Tim Greene, the estimated costs and terms of the agreement.
"We've talked to them about what the ballpark numbers were going to be," Antonucci said. "It shouldn't have been a surprise."
Last April, the Grand signed a development agreement that stated the hotel would pay the city for the cost of transit, street and pedestrian improvements that were west of the middle line of Mount Werner Circle and along the Grand's frontage.
The agreement, however, did not require the hotel to hold any money for the road improvements.