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Steamboat Springs — The Steamboat Springs City Council is being asked to resolve a dispute among neighbors in the Fairview subdivision about city lots sold to residents almost 15 years ago.

For the past few years, a group of neighbors in Fairview have argued that when the city annexed the neighborhood in 1989 and sold lots in the area to adjacent landowners, it agreed to not allow building on those lots.

The city and some of the current landowners say deed restrictions that accompanied the sale of the lots stated the land could not be sold separately from the lots of the adjacent landowners. However, the deed restrictions made no mention of prohibiting buildings.

Since April, the council has placed a moratorium on the lots and the city has worked with the neighbors in attempt to resolve the dispute. On Tuesday, the City Council will hear the matter again and is expected to make a decision before the moratorium expires July 25.

The city staff has proposed rezoning the lots to open space and recreational use, which would allow for accessory structures as a use by right and employee units as a conditional group. In a memo to council, staff noted that neither group of property owners supported the compromise.

Fairview resident Trudy Greig said part of the 1989 agreement prohibited building on the lots. The land was supposed to remain as open space, she said.

"A deal is a deal. Unfortunately, we feel like the city hasn't come through," Greig said.

In a memo to council, city staff noted that the city sold the land and used the money to offset the costs of improving water service to the neighborhood and to purchase parkland.

The 25-by-125-foot lots were offered for $1,000. The neighboring property owners were given the first option to purchase the 21 lots, and all took the city up on the deal. If a neighboring landowner hadn't purchased a lot, then it would have been sold to the general public at fair market value.

The lots were referred to as "back-yard lots," because in most cases, they were not adjacent to developed roads, the memo stated.

People involved in the 1989 negotiations recall that the city agreed to prevent construction on those lots.

The city has two letters that refer to the back-yard lots and restricting development on them. One stated the lots are to be used as yards. The other refers to a deed restriction that was supposed to be incorporated in the sale.

Greig acknowledged that no building restrictions were incorporated into the title papers. But at the time, Greig said, no one thought anyone would be building on the small lots.

Those who bought Fairview homes after the city sold the lots to the original property owners said they paid fair market value for the lots. They also said they purchased their property without knowledge or anyway to obtain knowledge about the 1989 negotiations, the city's memo stated.

In other business, the City Council will hear the pre-application plan for a 24-unit modular-home development in an industrial zone off of Shield Drive. On June 23, the Steamboat Springs Planning Commission told the applicant the park was not suited for such an industrial area.

The developers argue that the property, which they said is the only riverfront parcel zoned industrial, is much better suited for residential use and could provide moderate-income housing to working families. Developers anticipate the homes would sell in the low- to mid-$200,000 range.

The property is bounded by the Yampa River, the planned park on the Bear River Parcel, Shield Drive and a concrete batch plant. The owner of the batch plant spoke during the Planning Commission hearing to express his concern that homeowners would complain constantly about noise from the plant.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com