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Steamboat Springs — A downtown Steamboat Springs motel that sold for $2.2 million just 14 months ago went back on the market late this winter for $3.5 million and already is under contract.

The 33-room Alpiner Lodge at 424 Lincoln Ave. is owned by VPG Partners II LLC. The principals are members of a Branson, Mo., family that is active in developing vacation real estate projects.

Tony Walton, the listing real estate broker with High Mountain Sotheby's International Realty, said the Alpiner was on the market for less than two months. He did not disclose the buyer or the contract price.

"There were several parties interested in it, and while all of them felt it was nice to have a motel on the site, they were all looking at it for its redevelopment potential," Walton said.

The property includes surface parking on the east and west sides of the building that could be converted to vertical development. Walton said the property is just less than a half-acre in size and represents half of the north side of the 400 block of Lincoln Avenue.

The redevelopment of other downtown lodging properties such as the Nite's Rest and the Harbor Hotel may be contributing to a trend in commercial real estate.

Routt County Assessor Mike Kerrigan said last week that when downtown commercial properties are sold and the buildings demolished, the transaction becomes a land sale in terms of appraising the property's value for tax purposes. The bottom line is the land beneath downtown buildings becomes that much more valuable.

Kerrigan said the independent downtown lodging properties would likely pay higher property taxes as the value of their land increases. That could put them at a competitive disadvantage with the nationally branded motels on the city's southern edge, where land isn't quite so valuable, he said.

The Alpiner's sales history illustrates how rapidly property values in downtown Steamboat are growing.

The Alpiner was sold by Mike and Jan Lomas in October 2002 for $1.54 million. The buyers were John and Maria Latek.

The Lateks subsequently sold the property to VPG Partners last year.

The county Assessor's Office currently values the property at $2.3 million for tax purposes based on an appraisal done in June 2006. Of the total valuation, $1.9 million is attributable to the land and $391,000 to the improvements, or building.

Walton said determining an asking price for a property like the Alpiner is an inexact science. A good deal of it depends on the seller, how long they've had the property and what they paid for it.

In 20 years, Walton said, he's never seen such intense interest in the local real estate market.

"From a community perspective, it's really, really interesting to see what's going on in this town," Walton said. "It's going to be interesting to see what the product mix is. There are five big projects in downtown and they're all pretty similar."

Walton said his only concern about downtown is the depth of the market for the kinds of mixed residential/commercial inventory currently being built. He said he is not aware of what the potential buyer for the Alpiner Lodge has in mind, but he'd like to see an alternative to what is already going forward elsewhere along Lincoln Avenue.