The construction of a Burgess Creek diversion structure at this site is a top priority of the city's redevelopment authority at the base of Steamboat Ski Area - and a necessary precursor to flagship projects such as a promenade and summer daylighting of the creek. The Steamboat Springs City Council considered financing proposals for the projects Tuesday.

Photo by Matt Stensland

The construction of a Burgess Creek diversion structure at this site is a top priority of the city's redevelopment authority at the base of Steamboat Ski Area - and a necessary precursor to flagship projects such as a promenade and summer daylighting of the creek. The Steamboat Springs City Council considered financing proposals for the projects Tuesday.

Council commits to base-area projects

Teen center design, Rehder Building improvements added to plan

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— Some projects are too important to fall victim to the current economic crisis, according to the Steamboat Springs City Council, which signaled Tuesday that it is willing to consider at least $11 million in new debt for its redevelopment area at the base of Steamboat Ski Area.

In an effort to sustain the momentum of public improvement projects at the base of Steamboat Ski Area, the Urban Redevelopment Area Advisory Committee presented three financing options to City Council on Tuesday. Without the issuance of new debt this year, projections show the city's URA running out of design and construction money by June.

"We have already made a significant amount of investment up there, and to just stop would not be prudent," Councilman Steve Ivancie said. "We need to send a message that we are serious about our long-term future."

Council did not rule out a $16 million scenario that would allow the construction of a promenade around the immediate ski base and other large projects to be completed in time for the start of the 2011-12 ski season. Members expressed a strong preference, however, for a smaller $11.2 million scenario that still would allow for the construction of the promenade and a rerouting of Burgess Creek through the ski base, but would eliminate perks such as a promenade snowmelt system, a major fountain at Gondola Square and a boulder play area in the creek.

"We need to keep the momentum going. We need to show we have faith in Steamboat," City Council President Loui Antonucci said. "On the other hand, I'm really concerned about painting ourselves in a corner. : We don't really know where property values are going."

A definitive decision is expected at council's May 5 meeting, by which time the Routt County Assessor's Office will have issued a biennial reappraisal of property values to reflect values as of June 30, 2008. The reappraisal is key to consideration of a new bond because the URA is funded by incremental increases in sales and property taxes within its base-area boundaries.

Council was quick to dismiss a $5.3 million bond measure that would only provide enough money for small infrastructure projects.

URAAC Chairman David Baldinger Jr. pushed hard for the $16 million scenario endorsed by the advisory committee.

"Our recommendation was unanimous and enthusiastic," he said.

Baldinger said the $16 million scenario was not only affordable, but also based on very conservative assumptions that there would be no redevelopment at the base area - not including projects already under construction - during the life of the bond and that current properties would depreciate 5 percent three times: in 2013, 2019 and 2025. The smaller scenarios, he said, were based on an even more conservative assumption that there also would be a 20 percent reduction in valuation in 2011.

In other action

Also Tuesday, council gave preliminary approval to a "social host" ordinance that would allow authorities to fine people found guilty of knowingly providing a location for underage drinking. The ordinance passed on its first of two readings, 4-2, with Antonucci and Councilwoman Meg Bentley dissenting. Councilwoman Cari Hermacinski is on vacation and was not at Tuesday's meeting.

Council unanimously approved giving $81,500 to the town of Hayden to allow it to complete three athletic fields that will be used by Triple Crown Sports this summer.

Council unanimously denied an appeal by developer True Mountain Homes, which was protesting a Planning and Community Development Department decision to draw on a letter of credit held in surety as part of subdivision improvements agreement for Longview Park.

The city is drawing the money to complete improvements that are three years overdue. True Mountain Homes argued that the city did not provide adequate written notice as stipulated in the improvements agreement before drawing on the letter of credit. Numerous Longview Park residents attended the meeting in support of the city's decision and presented a slideshow that included photographs of the subdivision overrun by noxious weeds.

Comments

steamboatsprings 5 years, 8 months ago

Great Job! It is awesome to see a group of citizens come together to make a an intelligent study of what is possible and find a prudent way to proceed with the base area improvements. This is good for Steamboat now and sends a strong message about where we are going. I will look forward to seeing the council make a well considered choice from this group's recommendations in May.

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sickofitall 5 years, 8 months ago

Just wait and watch our property taxes double again..

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steamboatsprings 5 years, 8 months ago

URA funds are based on incremental property taxes from incremental valuations in the base area so a tax increase is not required to fund these improvements. It was mainly a question of how much of a debt load these revenues could safely handle.

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sickofitall 5 years, 8 months ago

All I know is my taxes have doubled in 5 years and the city is still broke!

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sickofitall 5 years, 8 months ago

Thank you Scott! If steamboat is soooo promising, Im sure that the city could save up for it, like the rest of us have to do. Council is in bed with Real Estate Agents (Louie) and developers. They are almost , dare I say "self-serving". Balldinger is a Real Estate agent too. He is all for this, oh, his office is up there too! Win Win!

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Scott Wedel 5 years, 8 months ago

I think it is amazing that they consider a 20% drop in real estate valuations as their worst case scenario when there are already comparable sales showing as much as a 40% decline in price.

This is the same sort of analysis that Wall Street used to say that CDOs would be good because their mathematical models said that housing prices would never decline again.

These guys in order to "show that we have faith in Steamboat" are committing the City to pay for URA projects. This is Iron Horse II - a deal promoted by the City a no risk win-win that is obviously a bad deal to anyone willing to analyze the facts.

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aichempty 5 years, 8 months ago

Wow. This is like borrowing money to put landscaping around a house that's going into foreclosure. What are they thinking?

Oh, yeah, they're using YOUR tax money to set the groundwork for real estate development profits in the future. If real estate tanks, they lose nothing, but your tax dollars are sunk into paying off bonds.

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Scott Wedel 5 years, 8 months ago

And let's try some honesty regarding the importance of the URA projects. The base area has a whole series of vacant lots. The base area is not impaired by poor amenities and a lack of a promenade, but by the vacant lots (why aren't they being used as a green community garden?).

The proposed project for some of the vacant land is asking for five years before STARTING construction. The other vacant properties do not even have project proposals.

It'll be so nice and irrelevant to walk past vacant lots via an $11 million promenade.

In a sane world, until the base area is no longer dominated by vacant land, the URA should go dormant.

And this is a case in which the issues behind the Tea Bag protest play out locally. Government adding debt on the theory that the money spent is an investment that will result in a stronger economy. Which is both controversial and popular depending on whether you think you are benefiting from the government spending or are now further in debt.

And while Obama admits that this is debt to create stimulus, the URA and City Council is claiming it is no risk free money via debt with no consequences.

Go back and look at RE sales prices to the mid 70s. Resort RE goes down more than the general market and recovers later. With the amount of local overbuilding, this is much more like the bust of the 70s than the short recent recessions. And there was a huge list of approved developments that never got built

So what happens to the City's budget if this is the new normal? That is not so crazy because it is just saying that the economy and RE valuations of 2003 was where we departed into a speculative bubble. Iron Horse, URA and so all becomes enough debt to concern the ratings agencies. So debt gets downgraded and costs that much more to service.

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Scott Wedel 5 years, 8 months ago

And waiting until May to get the assessor's dept values is pointless because their method is to use sales prior to that date (june 30, 2008) so they will be using sales data when the local market was still okay and prior to the financial crisis.

Thus, the assessor's values this year will include the final vestiges of the boom. Using that to decide if the URA can afford to pay for bonds is so wrong to be indistinguishable from fraud.

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JLM 5 years, 8 months ago

Wow, truly bad financial judgment. Spending money on the frame around an uncertain development picture at a moment of financial crisis.

Do you wonder why people of all political persuasions are now so pissed that they are beginning to rally in public? The anger is building, folks, and it is going to continue to build and multiply as long as such inadvisable financial judgments are made by elected officials.

It's not just about the tax rates, it's the expenditure of tax funds. It's TARP, the Stimulus and now it's the SBS City Council's plans to disregard financial caution at a time that screams out for prudence.

This is a substantive example of what is wrong w/ government at all levels --- the complete disregard for the most basic financial judgment while spending other peoples' money --- taxes, that is!

At least somebody should have the sense to apply for Stimulus funding at the very least.

Time to recall these clowns!

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sickofitall 5 years, 8 months ago

Thank all ! (Im strating to think Im really not crazy!!!)

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Scott Wedel 5 years, 8 months ago

And as an American citizen, I sure hope there is better use for federal stimulus funding than a promenade at a ski area.

While I think the TARP was needed because the alternative was worse, the base area improvements have no such justification. The alternative of not doing the improvements is just more of what has been there for years. And with all of the demolished buildings, there is no longer a valid argument that it is would be of great benefit to better connect the buildings there. And any benefit of seeing the creek is overwhelmed by the vacant lots.

If the question was if the developer got $11M in site improvements that they would start building this summer and have an aggressive completion date then at least then there would be potential justifications and we could compare the additional revenue created by the new construction vs the cost of inducing them to build sooner.

But this is just keeping on with plans made during the bubble as if pretending the bubble is not over will keep the bubble going.

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ybul 5 years, 8 months ago

Scott, maybe this does not fit into the utopian view of socialism, however, it sure sounds like a government plan that could bring on severe economic consequences from using government to pay for a program that a small group believes we need.

You are very correct in your analysis and the council is not preforming its fiduciary responsibilities very well if they fail to see the negative impacts that this could have on future tax burdens, service reductions, etc.. Everything you have described is very well thought out and presented. Also a good example of how misguided government policy will hurt the taxpayers even though their "studies" show how it is going to make everything great.

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Steve Lewis 5 years, 7 months ago

"A definitive decision is expected .... by which time the Routt County Assessor's Office will have issued a biennial reappraisal of property values to reflect values as of June 30, 2008."

Just how much use are property values from before the crash?

Cutting back responsibly everywhere else, the Council is making a real estate gamble based on optimistic assumptions and worthless data. At least get enough data to establish the value trend through 1st Qtr 2009.

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housepoor 5 years, 7 months ago

Some recent sales according to the Assessor's website are:

LOT 14 MOUNTAIN VIEW ESTATES F3 - 4/17/2009 $1,856,000 Assessor's Current Value $1,669,490 an increase UNIT 233 SKI-INN CONDO 4/13/2009 $349,900 Assessor's Current Value $265,650 an increase LOT 18 FOX ESTATES SUBD FILING 1 - 4/10/2009 $650,000 Assessor's Current Value $493,570 an increase

Property valus are decreasing but given the timing and conservative nature of Assessor's Office values i doubt very few properties will see a reduction in assessed value and propably an increase in some areas.

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JLM 5 years, 7 months ago

What actions would a prudent government official take in the face of an uncertain economic picture, if not to reconsider and delay capital expenditures?

What?

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