Steamboat 700: Transfer fee 'unfair'

Advertisement

— A lawyer representing the developers of Steamboat 700 told the Steamboat Springs City Council on Tuesday that a financing mechanism being considered by the city is unfair and unconstitutional.

The city is considering the use of real estate transfer fees - a tool illegal in Colorado unless included in an annexation agreement or voluntarily offered by a developer - to help offset the expected financial impacts of the planned 700-acre development west of city limits that proposes about 2,000 homes and hopes to be annexed into city limits.

"We think that is fundamentally a flawed notion," land-use attorney Bob Weiss said. "It is not politically sustainable. We don't think we should single out one part of the community."

Steamboat 700 has proposed a 1 percent transfer fee of its own to be devoted to affordable housing. Such fees are assessed on real estate sales within the development in perpetuity, excluding initial sales. In support of his argument, Weiss noted that in a 2006 update to the West of Steamboat Springs Area Plan, officials removed a proposed operational mill levy expected to raise $720 a unit annually. Weiss argued this move was an acknowledgment that future residents of west Steamboat should not be treated like "second-class citizens" by incurring a fee or tax not levied throughout the entire community.

City Attorney Tony Lettunich disagreed. He noted other areas of the plan that clearly state the city should find ways to ensure existing residents are not financially burdened by new residential development.

"I think that's an improper conclusion," Lettunich said.

"I totally disagree with what he just said," Weiss responded. "To add it now would be a major change in the direction of this plan."

Jerry Dahl, a consultant attorney hired by the city who specializes in annexations, then entered the conversation. He said the West of Steamboat Springs Area Plan should not be considered gospel.

"The plan is not project review and approval," Dahl said. "If that were true, we wouldn't have anything to do, would we? : Inevitably there are things in that project that aren't dealt with in that plan or are not dealt with properly in that plan."

Dahl also noted Steamboat 700 has proposed many elements that are not mentioned or even contradict elements of the plan.

"That would cut both ways," he said.

Weiss, who later apologized for his aggressive response to Lettunich, said he agrees with Dahl.

"We agree," Weiss said. "What we're saying is this fee is bad policy, regardless of the plan."

In other action

The City Council approved a Yampa Valley Housing Authority project at U.S. Highway 40 and Elk River Road on the condition that pedestrian improvements be addressed proportionally by property owners in the area.

Council members and the public raised concerns about the project's location at an already congested intersection. The project includes 54 multi-family units and 13 single-family lots in an area that includes mostly light-industrial uses.

"I think building this development without putting somewhere in there for kids to play would be a big mistake," said Councilman Jon Quinn, who suggested removing some units to make room for a playground on the site. "I'm a huge proponent of affordable housing, but that doesn't mean the families that live there shouldn't have options for their kids to play."

Curtis Church, project manager for the Housing Authority, said the authority designed the project to maximize affordability.

"We determined that we're trying to keep the HOA fees as low as possible," Church said. "At the time they find it necessary to build that stuff, they can put it into their capital reserves."

A representative of nearby industrial contractor TIC, who also spoke on behalf of SmartWool, said the Housing Authority project, coupled with another recently approved development would generate more than 500 vehicle trips a day.

"I hope you don't take this traffic issue lightly," the woman said. "It's thwarting all of our efforts to get our employees to come to work any way other than car. But that's the only way to get there safely."

Council approved the project, 5-1, with councilman Walter Magill opposing.

Comments

another_local 6 years, 7 months ago

The 1% transfer fee is good idea, but it should go to basic services NOT to affordable housing. It should cover the basic infrastructure buildout like water, and sewer, and toward ongoing expense like road maintainance and the further solutions for downtown traffic and other growth impacts.

Affordable housing should be addressed with zoning, lot size and supply, not deed restrictions and certainly not by subsidy.

0

sickofitall 6 years, 7 months ago

86 this deal of the 700. It will cost us more than it is worth.

0

powderday 6 years, 7 months ago

Hey 700... dont you think that it is unfair to current Steamboat residents that just because you have money, and want more , that you double the size of our town? Do you think it is fair that your development is going to add population, traffic, congestion, pollution, pressures on existing facilities that you would have to pay a little bit? You are going to erode the realestate values and have a negative impact every home owner in this town for years to come, Consider that you are going to forever change the complexion of Steamboat. It will be unrecognizable west of town, like sprawling Aurora... should you not have to pay? Council... put this annexation to a vote!

0

freerider 6 years, 7 months ago

Stop the 700 club...who in there right mind is going to trust developers from Las Vegas....Walter Magill is the only council member with any brains....I guess the Vaseline is free for the other council members

0

id04sp 6 years, 7 months ago

These guys behind the 700 are in it to make money. They are blowing the "affordable housing" horn to cover up the fact that, in the long run, they'll be getting rich while creating an overcrowded neighborhood, traffic problems, etc., at the eventual expense of the taxpyers.

If they can't make an acceptable profit through their own work and risk, then let them stop now. That's what would happen anyplace else.

The Willow Creek Pass Village (aka Steamboat Lakes Subdivision) north of Clark was a speculative deal that went bad and bankrupt many years ago. It's just now starting to catch up, and it's being done at the expense of people who live there. 700 will end up the same way, even if the City does annex it and put in the infrastructure necessary for roads, water and sewers. These guys just need enough momentum to collect a lot of money, get deeply into debt, and then declare bankruptcy and move along, leaving us to clean up the mess.

0

mfishon1 6 years, 7 months ago

If you have been following the city council meetings where SB700 was discussed then you know that this pre-annexation process still has more unknown/unanswered questions compared to what is known. It is also commonly agreed by all parties that the studies that they are wating on (i.e. financial impact study, housing study, etc.) will be EXTREMELY subjective and simply put will be WAGS (i.e Wild A** Guesses.) You can bet that SB700 will fight to make sure they are taking on the least amount of costs as possible because that is there justification to making sure the affordable part of this deal will indeed be affordable.

What you need to do is make sure you are telling your city council rep that they should approach this SB700 using the worst case scenario when they are viewing these studies and how they relate to the costs that will be incurred by the city and existing community. Personnaly, if they get rid of the special levy and the transfer fee and don't come up with any other way to raise money to cover infrastructure/ongoing maintainence cost then I see no way the city can proceed with this unless the city starts collecting property tax. We cannot proceed with SB700 assuming that sales tax (which is generated mainly by tourists) will cover the cost of SB700....that would be a very foolish assumption.

Your mission, if you choose to accept it, is to email/write/call you city council rep and make sure you voice your concerns about the cost ( to the city budget ) and where is this new revenue going to come from to pay for this increase.

0

Dukebets 6 years, 7 months ago

id04sp - "These guys behind the 700 are in it to make money"..........Are you kidding? I can't believe it! I actually thought they were proposing this development to lose their butts!

0

elkeye 6 years, 7 months ago

If the city tries to pass a property tax within the current city boundary as a means to offset any financial burdened to be created by Steamboat 700 it will simply go down in flames!

To annex SB700 (or any portion thereof) without a means to ensure that existing residents are not financially burdened will be defeated through the referendum process!

If the City Council will not protect the current residents from the financial burden of SB700, the residents of Steamboat Springs will have no choice but to utilize their right of referendum.

0

Matthew Stoddard 6 years, 7 months ago

So, instead of a property tax...voted in by current city boundry residents...which then the annexed properties will also have to pay as a steady revenue source not dependent on sales tax income (for those who want to get rid of Triple Crown)

would be worse than...

all those homes going in anyway, placing the financial burden on the whole county, and lose an opportunity to get families buying those houses that may increase the local workforce, meaning you may not have to worry about importing workers due to a lack of workforce.

Plus, those families may start newer businesses to fill up all the new business spaces that will go up in new ventures in Wildhorse (both locales), Ski Time Square, and downtown.

Yep. Much better, I guess.

0

mfishon1 6 years, 7 months ago

I agree with your assessment elkeye....especially with the current state of economy and such...it will be difficult to get community approval for any substantial costs to be passed along to the community as a whole.

To set the record straight...I am not saying that we should ask the city to propose a property tax....I'm just saying that we need to make sure the city leaders in charge of this pre-annexation agreement are brutually honest when assessing costs. They need to mitigate risks as much as possible and then error on the side of caution when it comes to "guessing" how much more money the city will need to build/support/maintain this massive undertaking. They then need to send a clear message to the community on WHERE this money is going to come from.

0

SilverSpoon 6 years, 7 months ago

I don't understand the whole "tax burden" issue. The 1% tax on realestate transactions? Why not impose that burden on all realestate sales in steamboat? Whistler road had infrastructure work done, who is paying for it? Lets see, with $8,530,300 in sales last week and at 1% that would give the city, $85,303.00 per week of disposable income.

I feel that the city is not entitled to any real estate revenue. We pay our registration, taxes, sales tax, and countless other fees to our city. If they can't make the addition of 2000 new property tax payers, sales tax payers, car registerers work; then the city should be fired! Get steamboat to become a "republican" government, and get our of our business. RIght now they give democrats a real bad reputation.

0

snowysteamboat 6 years, 7 months ago

SS-

It is illegal to install a real estate transfer tax over all sales in Steamboat under Tabor. The only way a transfer tax can be created is through annexation or consent of the property owner. Some of the new developments in downtown have self created transfer taxes to benefit certain projects including the arts and the Winter Sports Club.

The City has no property tax. The addition of new homes with the services they require, snowplowing, fire, police etc. is a money loser, regardless to increases in revenue due to sales tax increases.

It has nothing to do with the effectiveness or efficiencies of the City operations.

0

elkeye 6 years, 7 months ago

kielbasa...

just how do you think those homes are going in (if SB700 is not annexed)?

Who is going to provide water and sewer services for those homes?

Without water and sewer services just how may homes do you think would be permitted on the SB700 parcel?

The City better "find ways to ensure existing residents are not financially burdened by new residential development" or the annexation of SB700 is going nowhere (except to the referendum process)!

In addition to on-site infrastructure, looks like SB700 will be expected to pay for the improvements required to US40 to produce the capacity need for its project (those cost should not to be borne by the City at large).

The adequacy of the "raw" water supply as well as water/sewer treatment and service issues could be another major issue (i.e. cost) to be borne by SB700.

Anything but "revenue neutrality" is unfair to the current residents of the City of Steamboat Springs!

0

Ilike2dv8 6 years, 7 months ago

All though some of the comments above may be true, folks need to remember these costs are not all to be borne by the developer. Many of these costs including a transfer tax will be born by the homeowners, meaning anyone living in the WSSAP. The cost to existing residents for a new home built downtown or anywhere else in the city limits are nearly identical to those that may be built in the WSSAP. Given that, EVERYONE who is building a new home should contribute if the system is to be fair. I would think most of us would reject the idea that if you lived in riverside you were singled out to pay more taxes than anyone else in the community. You gotta love those people who want it all and want everyone else to pay for thirty plus years of the city's mistakes...

0

Matthew Stoddard 6 years, 7 months ago

Elkeye- Just like in Silver Spur, 700 will most likely have water and sewer thru Steamboat II Metro District, while being attached to City sources anyway. Homes will go in one way or the other. Annexation prevents it from being million dollar, Marabou style parcels.

"Steamboat 700 Project Manager Danny Mulcahy said he and his partners have several contingency plans in place, should the city demand so much that the project is no longer profitable. Mulcahy would not expound on those plans except to say that he might walk away from the project "in a heartbeat" if that happens or sit on the land for 10 years until prices reach "Aspen levels."

And-

"We're going to get everything we possibly can out of the 700 development," Quinn said. "But if the city pushes them too far, their contingency plan is to parcel that lot out into 35-acre lots and at least walk away intact. That would be a disaster. : We need to see through the development of a community there. We don't need another Marabou."

Both from http://steamboatspringsrealestatenews.blogspot.com/2007_11_01_archive.html

0

424now 6 years, 7 months ago

If the Vocal local home owners get their way they will succeeded in protecting their investments.

They will also succeed in deterring development. They will also keep any new residents from moving into the Boat for a few more years. They will succeed in keep rents at astronomical levels. They will stagnate growth in the boat and feel justified in doing so.

If in fact this issue goes to referendum rest assured I will be making the rounds to all of neighbors who pay these rents and insure they vote. That referendum could be as beneficial to the working man as it could be for the current homeowner.

0

danny 6 years, 7 months ago

I am always available to provide the correct information. Please feel free to stop by my office at 345 Lincoln Ave suite 206. Email dmulcahy@steamboat700.com cell: 970-846-2192 office: 970-870-0244

Powderday: the community created the West Steamboat Springs Area Plan(WSSAP). It has been in the public realm for 10yrs and was readopted in joint public hearing before the county commissioners and the previous City Council in June 2006. if you read both plans (WSSAP and SB700) you will recognize we haven't proposed anything materially different from what the community has requested.

0

spukomy 6 years, 7 months ago

Hope these guys can figure out a way to bring in the 700. The need is great, for the stabilization of home prices and our workforce. Throwing up some apartment buildings wouldn't hurt either. Not everyone who wants to live here wants to be a homeowner.

0

424now 6 years, 7 months ago

OK, perhaps not everyone who wants to live here wants to be a home owner.

BUT I DO!!!!!!

0

Requires free registration

Posting comments requires a free account and verification.