Steamboat Springs Financing for Hayden's new police station has fallen through, which means the town still is looking for a partner in a lease-purchase agreement.
The town was in talks with Mountain Valley Bank, Town Manager Russ Martin said, but the bank opted not to finance the project. Bank officials would not comment on the decision.
"We'll find someone to do it," said Alan Matlosz, who is working on the deal for the town. "I'm not worried about that. There are plenty of opportunities out there."
Lease-purchase deals are complex but common, said Matlosz, senior vice president at George K. Baum & Co. in Denver. Meeker's library, Rangely's fire station and Routt County's jail were funded this way, he said.
"The town owns some land, so they lease the land to, let's say, a bank. That's the easiest way to do it," he explained. "The bank lends them money to build their building and then leases the building back to the town."
At the end of the lease period, the town would own the police station, Matlosz said.
The deal involves some risk for a bank, Martin said. For example, he told the Hayden Town Board on Tuesday, the town must approve the lease payment every year. That leaves the possibility, however unlikely, that the town will opt not to approve it.
If the town voted not to pay, the bank could rent the building to someone else for the rest of the lease period to recoup that money, Martin said.
"This is a pretty good risk, which is why we tend to get a pretty good deal," he said.
Matlosz said he did not expect national economic problems to affect Hayden's ability to get funding. The town is seeking $1.3 million for the new station on the east side of town.
"On really big deals : it's hard to get these done, because it's big, and there's a lot of money," Matlosz said. "On the small deals, we're still pretty successful in getting this done."
In addition to the $1.3 million, grant money from the state Department of Local Affairs will help fund the project, which Martin has said is expected to cost about $2 million.
The cost might increase by several thousand dollars now that the town must put together a new financing deal, Martin said. He already has cut building features to decrease the cost. The Town Board, which approved the lease-purchase ordinance last month, will have to approve a new deal.
Martin has received criticism about the building's cost. The station will meet the Hayden Police Department's needs as the town grows, he said. The department now is housed in the Town Hall.
"It's something that is an important thing," Martin said. "It's not perfect, but I think the town will look back a couple of years from now and say they're glad we did this at the time we did this."
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