Steamboat 700 campaigns taking shape

Local groups on opposing sides of annexation debate

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Referendum A

Referendum A, the ballot question asking voters to approve or deny the Steamboat 700 annexation, reads:

“Should ordinance number 2276 adopted by the Steamboat Springs City Council on Oct. 13, 2009, annexing to the city and approving an annexation agreement for a parcel of 484.80 acres more or less, generally known as Steamboat 700, be upheld?”

Ballots for the mail-only election will be sent to registered city voters between Feb. 15 and 19. The election ends March 9.

Good for Steamboat committee

(Supporting Steamboat 700)

Amy Davis, Anne Pagano, Bruce Carta, Bud Romberg, Chris Puckett, Christine Hands, Dave Nagel, David Baldinger Jr., Geneva Taylor, Jim Gill, Kathy Stokes, Kevin Kaminski, Kyle Pietras, Marion Ayer, Nancy Westphale, Ray Martinez, Sara Ross, Scott Lewer, Tessa Devault

Online: href="http://www.... ">www.good4steamboat.com

Let’s Vote committee

(Opposing Steamboat 700)

Omar Campbell, Greg Rawlings, Terry Armstrong, Tim Rowse and Cindy Constantine

— Campaign groups are formalizing on both sides of the Steamboat 700 annexation debate.

On Monday, a group calling itself “Good for Steamboat” announced its intention to file with Steamboat Springs City Clerk Julie Franklin as a campaign committee in support of Steamboat 700 and Referendum A, the ballot issue that will decide the fate of the proposed development. Steamboat 700 proposes about 2,000 homes and 380,000 square feet of commercial space just west of the current city limits. Also Monday, Let’s Vote spokesman Tim Rowse said that group, which successfully gathered petition signatures this fall in favor of a public vote on the annexation, is filing as an official campaign committee to oppose the annexation.

“Yes, that’s accurate,” Rowse said. “Really we oppose the annexation agreement, is the bottom line.”

On Dec. 15, when the Steamboat Springs City Council voted unanimously to put Steamboat 700 to a public vote, Rowse spoke publicly against what he called the annexation’s “hidden and unknown costs.” Councilman Jon Quinn called Rowse’s comments “ironic,” given the Let’s Vote group’s position during the petition drive that it was lobbying only for a public vote.

Rowse confirmed Monday that the group now stands in opposition to the annexation. He reiterated his concerns with Steamboat 700’s potential costs and impacts related to water use and traffic, and the attainability of housing. Rowse said Let’s Vote will work in coming weeks “to continue informing the public about what we’ve discovered about the annexation agreement.”

Good for Steamboat also cited a goal of public information. Local consultant Chad James and Curtis Church, a former interim executive director of the Yampa Valley Housing Authority, are leading the Good for Steamboat effort. The committee has a Web site at www.good4steamboat.com.

Church said the Steamboat 700 development team is paying him and James as outside contractors for the campaign effort. Good for Steamboat has a committee of 19 members, including former City Council members Bud Romberg and Kevin Kaminski.

“We essentially went out and talked to people who we knew were supportive of the annexation and asked them to get involved,” Church said. “It was as simple as that.”

Kaminski said committee members are meeting weekly to discuss campaign plans and the group’s message.

“It’s just going to be trying to get that education out there as much as possible,” Kaminski said about the upcoming campaign. “The growth is going to come. Now is our opportunity to grow correctly.”

Last week, City Council members directed City Manager Jon Roberts to work with city staff to initiate a public information process about Steamboat 700 in coming weeks. Council President Cari Hermacinski said she would like that process to include public meetings and question-and-answer sessions about Steamboat 700.

Ballots for the mail-only election will be sent to registered city voters between Feb. 15 and 19. The mail-only election concludes March 9.

Comments

greenwash 4 years, 12 months ago

Nice job Curtis and Chad....At least you found a job.Im assuming you guys are hoping this pans out to long term employment.Good Luck.

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AGM 4 years, 12 months ago

Mr. Rowse, I think Mr. Quinn was being kind when he called your recent comments "ironic." I think many others in the community would label them much more on the side of "deceitful" and "disingenuous."

It is disheartening to see that you and your group publicly held itself out as a neutral party as you gathered signatures to put this to a vote when all along your intentions were not neutral in the least. As written in the Pilot on October 20, 2009, "Constantine, the group's chairwoman, said the committee simply wants to ask residents, "Would you like the opportunity to vote on the recent decision made by City Council to annex Steamboat 700?""

Integrity and morals still matter and the Let's Vote group seems to be lacking such qualities given recent facts. It is a shame they couldn't be transparent.

Don't fear the vote, the educated citizens of our community understand that growth will happen in our community, we have available land adjacent to our city and that annexing that land into the city is not only intelligent it will provide for intelligent growth going forward.

I will continue to ask the question, if we don't annex the land into the city.....then what will we have in 20 years? Please explain how we will be different than Aspen and similar communities that have failed to annex land in a community that continues to grow.

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Solo 4 years, 12 months ago

It is my understanding that there is a difference between the “Let’s Vote” committee who wanted the Steamboat 700 Annexation Agreement placed on the ballot and the “Let’s Vote Issue Committee” that is not correctly identified in the article. It is correct that Mr. Rowse was/is active in both groups, I am uncertain about the others involvement. Obviously, a confusing choice of names as the Steamboat Today got this wrong. It appears from Mr. Rowse’s quote, the “Let’s Vote Issue Committee” is concerned with the Annexation Agreement itself. He said nothing in the article about “no growth”. I share this concern over the Annexation Agreement. The West Steamboat Springs Area Plan mentions affordable housing over and over as a goal connected to the growth west of our existing town. There is nothing in the Agreement that requires anyone to build affordable housing. I also have concerns about the $50,000,000 plus for water and wastewater treatment improvements mentioned in last week’s paper that will need to be spent in order to service development west of town. Hopefully, as these and other issues come out, there will be an opportunity to rewrite the Steamboat 700 Annexation Agreement in a manner that will meet not only the developer’s goals, but also the goals of the community, without unfairly burdening those who have no stake in annexation

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Chad James 4 years, 12 months ago

A couple of things:

Greenwash - to clarify Curtis' comments, we are consultants on the annexation project and were long time supporters of the annexation before it was ever suggested that we become a part of the team. Be clear that being paid to do this work came AFTER we supported the project, not before.

Obviously the Steamboat 700 team does support the Good4Steamboat Citizen's Committee, but that group of 19 citizens is in fact a volunteer group of supporters. You're welcome to ask them, you can find all of their names and faces at http://www.good4steamboat.com/committee-members.

Freerider - There are in fact 30-40 people in this community who have worked on this project in some form or another. It is expected (and not some conspiracy) that they would support this project. There is also a list of hundreds of UNPAID supporters willing to allow their names to be stated in public that they support this annexation. It is not a "scam", or "bribe". I can't speak for Curtis, but my involvement in this project stems from my many, many years of unpaid support for the project and my continued, extreme belief that this project is very, VERY good for our town.

AGM - While I'm disappointed that the "Let's Vote"

Ken (Solo)mon - I'd encourage you to spend some more time with any number of City Staffers, City Council Members, City-paid consultants, etc., including Gerry Dahl, the most experienced annexation attorney in the state of Colorado who stated that this was the most comprehensive Annexation Agreement that he had seen in his entire career, to clarify some of your issues. I know that it can be complicated and hard to understand, but there have been over 5000 hours of City Staff time and 300+ hours of public meetings where these very issues were discussed before this annexation was passed. There are also some simple FAQs available for you here: http://bit.ly/4vECB9

Obviously, Danny, myself and others would welcome dialogue upon this subject at any time. You can contact the Steamboat 700 office at 970-870-0244.

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Scott Wedel 4 years, 12 months ago

It should also be noted that people have different reasons for opposing the project.

I am opposed because I am deeply concerned that they will be granted development rights that a majority of which is not going to be used for 10 years. So many things change over time and many developments end up differently than expected. And thus, in 10 years, it is quite likely if it was asked would we now annex the unbuilt part of SB 700 under the same agreement as 2009 that the answer would be overwhelmingly no.

I would approve annexing the part of SB 700 that will be built in the next 7 years, but the current annexation has to be stopped before that can become an option.

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Chad James 4 years, 12 months ago

Sorry AGM, that was a fragment that I meant to leave out. Please disregard.

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amygirl 4 years, 12 months ago

If voters reject the annexation, then there will be no “rewriting of the Annexation Agreement.” Realistically, what would Solo ask the City to ramp up in that “rewrite”—20 acres for affordable housing? 25 acres? 40 acres? $50 million in water rights? $30 million to fix the US40 problems that plague us now? There will be no second bite of the apple. There will be no re-do’s, especially of the kind where the City asks for even MORE from the developer and cripples the financial viability of the development.

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greenwash 4 years, 12 months ago

Hire me as a consultant....I promise to support it.

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dave pieknik 4 years, 12 months ago

First- most of you should use your own names- but that is the fault of the pilot. Stand behind your words. Freerider- why do the illegals have to be mexican? And are you sure they will be illegal? Get all the facts before you spray at the lips. Merry Christmas!!! and remember- Canadiens can build houses too...even without a green card.

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bcpow 4 years, 12 months ago

All those Canadians have moved down here to take our jobs and ski our backcountry. They got tired of 3000 foot lines of deep pow and wanted our 400 foot pitches of champagne. What can Chad and Curtis do about that?

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Scott Wedel 4 years, 12 months ago

"There will be no rewriting of the Annexation Agreement"

Why not? Will the land disappear? Of course not.

Will it be broken into 35 acre lots? Possibly, but those lots would be far more valuable as future developments annexed into the City than as 35 acre ranches. As a boutique ranch, that land is not worth $1.5M per ranch which is my guess of the developer's break even point. It would actually be better for the community in 35 acre parcels because then there would be many competing owners trying to be annexed each trying to cut a better deal than the other instead of the current single developer saying my way or forget it.

Because the land is designated as future urban boundary of SS then the County should reject any attempt to convert it into a LPS.

And I personally would not mind if a future annexation placed costs onto the City if there was greater public benefit.

I am deeply concerned that in 10+ years a future developer will be able to take vested development rights and satisfy the letter of the agreement while building something that just about everyone will say is bad for the community. All the care dealing with AMI and so on to be reasonable today, can quite easily be completely toothless in a decade or so.

Just the the SB Grand was built on vested development rights that seemed like a good idea at the time, but was not what the City would have approved if it had to go through planning again, the same will happen for SB 700.

Just about never are vested development rights match what would be approved if the project had to go through planning again 10+ years later. So why is it expected that today's SB 700 annexation agreement going to be so good in 10+ years when the bulk of the construction takes place?

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Kathy Stokes 4 years, 12 months ago

Hello Ken, In regards to your concern about a lack of affordable housing in Steamboat 700. I believe the annexation agreement calls for Steamboat 700 to donate15 acres of land to the City for the purpose of building permanently affordable housing. City staff determined that this15 acres of land can accommodate 400+ housing units-which means that 20% of the total housing units at Steamboat 700 will be permanently affordable. This land dedication was negotiated by the developer and City staff, recommended by City staff, adopted by City Council and endorsed by affordable housing advocates including the Yampa Valley Housing Authority. Affordable housing has always been one of the main goals of the West of Steamboat Area Plan and as such has been carefully considered by all involved from the beginning of the process.

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space 4 years, 12 months ago

"Permanently affordable"? What does that really mean? I know folks at Fox Creek that can't afford their tiny 2 bedroom place, they are just holding on for as long as they can. they save absolutely zero for retirement because everything goes to their mortgage and expenses to live here. Affordable housing is not working here, in it's current set up. If those "permanently affordable" units are built at Steamboat 700, they will sit vacant, for years to come. Wow, that will look so good, I wonder if the assessor will create a new mill levy for vacant structures...... Let's Vote....... NOOOOOOOOOOOO!!!!

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housepoor 4 years, 12 months ago

We have 5+ years of inventory(and growing) and prices continue to drop, they are at 06 prices and still falling, everyday there are more and more affordable options out there. Single Fam under 500K is no problem, 2brm condo under 200k sure. Granted without 20% down you have no chance of getting a loan. I still can't see why everyone assumes growth is going to continue, yes we grew at a healthy rate for the last 10 years, but now we are entering a period of stagnation or contraction, why can't that last for 10 years?? The wave of baby boomers taking their equity out of their area and pumping it in to steamboat is over, they lost their equity.

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pitpoodle 4 years, 12 months ago

I heard people were being paid to blog on this web site. So it's true, it was you, Chad and Curtis this whole time. I wondered how you could espouse the SB 700 "party line" so perfectly. You led readers to believe that you are just concerned (though misguided) citizens, then we find that you work for the developer. If this is not fraud, what is? If this passes, will you get a piece of the pie or just a high paying job? Your involvement should raise questions like: who else could be paid to vouch for SB 700? Hopefully not city staff or our highly esteemed council?

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Kathy Stokes 4 years, 12 months ago

I don't understand all the venom. This annexation is our opportunity to vote on whether we choose to plan for growth or not plan for growth. If we don't see growth for the next 10 years then this development will wait until the growth comes. When the growth comes, we will be ready. Why is it so bad to plan for it? Also, just because it gets annexed does not mean that the rules of the development are set for the next 20+ years. This is just the first step in the process. Every phase has to go through a thorough planning process before it can start. I also don't understand why you are so insistent that everyone has ulterior motives. If this developer was just looking for the easy buck he would have given up on this project a long time ago. This sure hasn't been easy... If you do not feel that planning for our future growth is important and that this annexation is a good option then what is the right option? We either make a decision to plan for growth or to not plan for growth. If we do not plan for growth then we are making a choice that could threaten our communities character by forever threatening our ability to provide our workforce and our children an opportunity to live here.

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aichempty 4 years, 12 months ago

KathyStokes,

You need to understand one thing about the affordable housing provisions. Providing land without money to build housing units does not provide housing.

Building costs around here are a function of structural, soil and financial conditions (labor and materials) that cannot be brushed away with an assumption or an agreement. Those 400 housing units are going to cost somebody $150 to $200 per square foot to construct, and the building costs actually increase in a square-foot basis as the size decreases. Why? Because a bathroom and a kitchen and heating systems and all that stuff cost as much in a 1000 sq. ft. unit as they do in any other, and if you do it right (a square footprint) you can double the square footage at less than double the cost.

Those 15 acres are an empty promise which pulls at the heartstrings of people who don't understand that the housing units are still going to be very expensive to build. Assuming the minimum cost for 400 units of 1000 square feet, that would cost the City $80,000,000.00. That's 400 times 1000 square feet times at least $200 per square foot (considering total costs, including city overhead for administration,etc.).

Even at half the cost, that's still $40,000,000.00. I don't think anybody who has looked at the numbers would expect the City of Steamboat Springs to be able to swing that kind of budget for a basically "non-profit" housing development which, with price controls and deed restrictions in place, don't provide enough income to repay the interest on municipal bonds that would be required to finance them.

SB700 and its supporters did a good job of spinning the "plus" side of donating land to the city, but ignored the realities of actually building the housing. It's not a practical thing for the City or for private investors to do from a financial standpoint. Nothing short of an outright grant of enough money to fund the whole thing would make it practical for a community this size, with only sales tax revenues coming in, to contemplate.

I won't say that the whole thing is a cruel joke when it comes to affordable housing hopes, but it might as well be.

SB700 could have a great future as a market rate development, but it needs to pay the water and sewer costs up front to support the project instead of shifting it to the city. SB700 has tried to push the "partnership" idea, and that's great, but "partners" have to contribute in proportion to their expected return.

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bigfatdog 4 years, 12 months ago

What the anti annexation/Let's Vote do not understand is that for well planned, long term effective & efficient infrastrure there should to be a large annexation. Why do communities have master plans? This annexation (not perfect but well planned in comparrison to many other towns) is the plan for long term infrastructure. Trying to develop 35+ acre parcels at a time in this location will never happen and Steamboat will turn into less affordable housing. Hayden, Stagecoach and the bedroom communities will grow faster and there will less affordable housing in Steamboat. Simply put, look at other cities that did not allow for large planned annexations; Aspen, Boulder??? We now need to put our energies towards well planned/capitalized developments within the annexation. The annexation is done whether you like it or not. The majority in favour are just now speaking out.

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Kathy Stokes 4 years, 12 months ago

Hello aichempty, Doesn't the donation of the property give us a place to build affordable housing with funds from fee in lieu and transfer fees? I don't think the city is expected to fund the building of the homes. One of the big issues with affordable units has always been, where do we find the land... Now we will have the land. I was never fond of the way that affordable housing was handled when we insisted that these units be built in the actual development. It seemed like a waste of funds to pull market units out of the mix and make them be deed restricted. Can't we build more deed restricted units on free land west of town than at the base of the mountain? If the developer of condos at the base area can sell all units at full value can't he afford to pay more in fee in lieu so that more affordable units can be built on the free land? And wouldn't local families much rather live in a community of locals with parks and trails than in a condo with rich visitors at the base of the mountain? I know I would.

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jk 4 years, 12 months ago

I think we need to get over this glorious vision of affordable houses! There will be affordable appartments at best and that is still questionable. A nice 15 acre parcel of small appartments tucked back behind the shopping center overlooking the trash compactors, so the people who can afford to buy the $600,000 homes don't have to see the local workforce!!

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AGM 4 years, 12 months ago

Kathy,

Good luck with Aich. He/She has self-appointed himself/herself as the expert in affordable housing (and now water issues). On both fronts the numbers that Aich spews as fact are nothing short of completely subjective. Aich has become convinced that even with free land, affordable housing is impossible. Reality is that some people will complain about anything and have such blinders on that facts become ignored and they are correct - something close to god-like.

On the water issue, I wish the folks from SB700 would speak out loud and clear that this "issue" is nonsense and there are doing nothing but screaming FEAR.

Any growth that takes place in the city will eventually require increased infrastructure. Any growth that takes place in any community will be the same. To say that this bill is completely attributable to SB700 is nuts. A community must plan for growth and the water infrastructure is one part of that equation. Simply having the right fee structure for ANY NEW LOT within the city limits is what is important.

Speak up SB700 - lay out the facts for those attempting to spread the word of fear - address this issue directly and lay it to rest.

Why is it that no one addresses the FACT of the funds that SB700 is contributing to the city? I mean it is only about $67M - hardly immaterial, yet no one talks about it. Give us a list of all of the line items that SB700 is contributing toward. We can then decide if we'd like to dig our heals in the sand and not accept the annexation and thus, not accept the $67 that our city will need regardless of whether SB700 is developed or not.

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Kathy Stokes 4 years, 12 months ago

JK, You are right that the housing will be of a variety of sizes and styles. The affordable housing is not going to be all houses... We need the variety anyway. I think if you look at the plans you will find that the 15 acre parcel donated to the city is no where near the dumpsters. I think it is farther back near the trails and playgrounds.

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Solo 4 years, 12 months ago

In the Annexation Agreement you will see that most of the costs for infrastructure, roads, parks, Highway 40 improvements, Fire Station, debt and operation expenses are fully reimbursed to the developer through a property tax and a 2% Public Improvement Fee on retail sales. With this in mind, it is difficult to see that the developer is “gifting” much to the community. The title to the land for affordable housing will be transferred to the City in two and three acre increments. I believe those locations will be determined upon platting of each pod. 400 units on 15 acres are 26.66 units per acre. It would seem difficult to have a mix of housing types with this constraint. As stated before, there is nothing in the Annexation Agreement that will require that affordable housing will be built.

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JLM 4 years, 12 months ago

I have developed, renovated, owned and financed over 15,000 apartments in my former business careeer. Apartment development is a risky business but it is a pretty formulaic business and with a bit of experience it is an easy business. Some folks can ski the moguls and some can't.

First --- Please, please, please keep the City of SBS out of any apartment development of any kind whatsoever. Goodness, didn't we learn anything from the Iron Horse debacle? Let them waive all fees and lend their powers of credit enhancement but don't even let them wander over to the site until the groundbreaking.

Second, doublecheck that land to apartment density. 400 units on 15 acres? Garden apartments are typically 15-25 units per acre. Mid-rise 25-35 units per acre. Well, you see where this is going, right? If you are putting 400 units on 15 acres you are talking 4-5 story buildings. Doublecheck to see if this is what you really want.

As density increases the necessity for providing equally dense parking rears its ugly head. At high densities where are you going to park the cars? Where are you going to put the snow? Where is the greenspace going?

Economic efficiencies are best at about 3 stories where you can spread the roofing costs over three stories and the parking can still be surface parking. This does not get you anywhere near 400 units.

Third --- Aich is just about right about the economic equation.

Total apartment development costs are an aggregation of development management/overhead, land, design, construction, marketing, finance and contingency costs. Any competent developer has this reduced to a 3-page proforma on an Excel spreadsheet and can plug in the numbers and predict the costs to two decimal points. Takes about an hour to put such a deal together.

The developer's job is to take each uncertain or variable cost and to quickly reduce it to an absolute certainty. Buy the land, get a fixed price construction contract, sign a fixed price design contract, get a loan, etc. Slowly beat the uncertainties to death and arrive at a series of fixed prices.

Fourth --- You got the land cost down to zero. That's a good start.

Now the fun really starts.

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JLM 4 years, 12 months ago

(continued from above)

Fifth --- Ahh, the money!

The financing is the key to making this deal work.

Even at $40MM, this deal is doable if an experienced financier can put the strategy together.

Get as much local stuff free as possible --- land, waiver of fees by the City, local landscape design, local plan review, local contributions, challenge grants, etc. Set the target at $10MM. You are halfway there w/ the land.

Get busy writing grants. For general grants, for challenge grants, for STIMULUS money. Work your elected Congressmen like Tiger works a Perkins Pancake waitress and get some of that dopey give away free Obama money from DC. Get your Google on and see how many housing grants have been given away. Call a meeting with your Congressional delegation and make them sweat. Do the same thing with the State of Colorado.

Obtain a Federal tax credit for affordable housing. This is a technical program which will enable you to sell the "tax credits" to an investor. The money guys will know what this means.

Get $20MM from grants and tax credits. This will be hard work but you can do it.

Get the City of SBS to lend your their credit rating by providing credit enhancement to up to $10MM of certificates of participation (10 year fully amortizing at muni rates) and get the local bank branches to fund (buy) them. Twist the arms of all local banks who are part of nationwide bank chains to make this loan (buy these instruments). They have CRA responsibilities to meet and they can be encouraged to make this loan because it is so well secured.

Get the City of SBS to dedicate some small discreet cash flow (e.g. transfer fees, etc) for a definitive time period to assist in financing the project but only as a last resort. Collect the money and use it but repay it as the project flows cash.

If done correctly, at the end of 10 years the local AH owns the project free and clear.

Sixth --- develop an aggressive campaign of pre-leasing. Offer a very reduced rate for signing a 2-year lease. The final rents should provide a 5-6% return on the total development cost (v a 9-11% market rate of return).

Last point --- resist the temptation however well meaning to allow anybody to lose their virginity on this project. Use an architect from Dallas who has drawn 5,000 such plans, use a national wood butcher contractor who has built 10,000 such projects, use discriminating tasteful but affordable materials which provide for low cost long term maintenance (e.g. slate not granite or marble, metal roof, concrete parking lots, Hardie cementitious siding and quality appliances).

Appoint one person for whom this is not their first rodeo and let him do his job. Back him to the hilt.

If you had the community will and the cojones to make this happen you could be holding a grand opening 3 years from today or you could still be peeing on each others' legs and complaining about the rain 10 years from now. Your choice.

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CedarBeauregard 4 years, 12 months ago

"Second, doublecheck that land to apartment density. 400 units on 15 acres? Garden apartments are typically 15-25 units per acre. Mid-rise 25-35 units per acre. Well, you see where this is going, right? If you are putting 400 units on 15 acres you are talking 4-5 story buildings. Doublecheck to see if this is what you really want."

Thanks JLM. I wish this depth of analysis had been done in the review proses. I don't think we ever looked at parking density implications on such a high units per acre. In fact I was expecting some of the units to be single family??

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AGM 4 years, 12 months ago

Solo,

You write, "In the Annexation Agreement you will see that most of the costs for infrastructure, roads, parks, Highway 40 improvements, Fire Station, debt and operation expenses are fully reimbursed to the developer through a property tax and a 2% Public Improvement Fee on retail sales. With this in mind, it is difficult to see that the developer is “gifting” much to the community."

Ken, you are either intentionally misleading the public or you are ignorant. Shame on you in either case and I'm relieved the public saw through you when you attempted to run on your "No Welcome Mat" platform, as someone with this view should not be serving on Council.

Go read Exhibit F of the Annexation Agreement. Please state the facts and not your misleading biased view. Yes, some capital improvements may be offset but to make such a ridiculous statement that the developer isn't providing actual cash to the city is nothing short of irresponsible.

In that I'm thinking you haven't even read Exhibit F (as your comments seem to indicate), I'll make it easy for you and provide the link....

http://steamboatsprings.net/departments/planning_department/steamboat_700_july_2009/steamboat_700_draft_annexation_2009

Simply frustrated by fear mongering statements.....................

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JLM 4 years, 12 months ago

Cedar ---

In evaluating the density, you have to first take out the entrance, circulation, parking area, clubhouse, pool area and greenspace BEFORE you really get a handle on the density to determine building heights. Even at 400:15 you are already pushing 30 units per acre without the required reductions.

I am hesitant to make any recommendations because I do not know all the details of how 15 ac was arrived at but it looks to me more like 250-300 apartments. 400 units is a "sweet spot" for apartments because the on site management and maintenance staff is about the same in the 200-400 range and you require more staff when you break above 400.

There is nothing wrong with low rise structured parking but it is expensive --- at least twice as expensive as surface parking but you only have so much land.

Damn nice deer!!

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CedarBeauregard 4 years, 12 months ago

JLM

I'm having flashbacks to Eastmans spreadsheet. I will try to find the link and post it. Because the City is not giving away the housing but selling it at an affordable rate they are supposed to make a "profit" on this housing because the original land is free. The idea is to then use that "profit" to then buy more land. The shaky part is that all the sale prices are hinged on the person buying the housings AMI and the allowable payment relative there income. Therefore hinging on the current interest rate at the time.

This is all on memory so I should post the actual document as allot of time and effort went into that calculation.

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CedarBeauregard 4 years, 12 months ago

This is all I could find. See 2- (l). It talks about the City buying more land to be used for affordable housing. The first section also speaks to the housing types and most are supposed to be townhouses duplexes etc. The actual calculation of the land is available from staff I'm sure.

http://steamboatsprings.net/sites/default/files/page/3121/2276_SB700Annexation_Agmt_G_CHP.pdf

The problem I had with the 400 affordable housing units was that when you create 2000 new units they in themselves generate the need for 400 affordable housing units to house the people that will work on and for the 2000 units. Therefore SB 700 will carry its own weight with regard to affordable fixed rate housing but it will unlikely "generate" any new affordable fixed rate housing for the existing City.

I have no idea why I'm talking affordable housing here.. I always feel like we are wrestling in quicksand when affordable housing discussions come up.

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Karen_Dixon 4 years, 12 months ago

JLM, Nice analysis. It would be nice to see your name in the hat when the time comes for performance. Hopefully your retirement from the field is merely theoretical and a symbiotic relationship with the city and/or YVHA can be formed, outside of the veil of anonymity.

Cedar - I haven't checked the link, but if it's the spreadsheet, thanks for posting it.

It's important to note that when reviewing whether or not this acreage was enough to meet the 20% requirement, it was never assumed that all 400 units would be put on this initial 15 acres. More acreage is bought over time with the perpetual RETF and the "profit" from the sale of the units, as Cedar points out. The assumption was a range of density rates with a range of product types, averaging around 15 units per acre. This is a very reasonable & comfortable density rate in my opinion. At that rate, however, you may get a few single family detached homes, but not likely on their own lots with their own large yards. Shared parking will be the most efficient as well as the shared yard concept - aka the Neighborhood or Community Park. The agreement stipulates that the city gets its choice of lots within the allowable amount per pod until it reaches the max of 15 acres. This is front loaded as development progresses. Additionally, these are developed lots - net acreage, not gross. Parking, as JLM points out, is the nemesis, particularly with 2+ mobiles per family. We cannot force Americans to give up their cars. However, we can make it more convenient and pleasurable to use alternate forms of transportation and less convenient & pleasurable to own & operate an automobile. Plan & design for the smarter choice.

That brings me to density as it relates to traffic. The annexation agreement limits the # of units in the buildout, which ultimately is a limit on gross density. The higher the density, the better the transit system works. The better the transit system works, the more convenient & pleasurable it will be to use it. The higher the density, the less convenient & pleasurable it will be for individual car users. By making one more convenient & the other a pain in the a$$, you encourage - by design - the smarter choice. JLM... another counter-intuitive principle: Higher density, paired with other smart growth principles, produces less traffic congestion.

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Solo 4 years, 12 months ago

AGM- In Exhibit C, of the Annexation Agreement, Tables 1, 2 and 3 list projects funded by the District or by the District/Developer. Comparing those projects with the projects on Exhibit F, you will see the reason for my statements. Also, listed below is the verbatim from the Annexation Agreement.

V.B-“Public Improvement Fee. The Parties agree that the Developer may impose by private covenant a public improvement fee (PIF) not exceeding 2%on retail sales within all or any portion of the Development, the revenue from which may be used for the infrastructure and maintenance of facilities and amenities permitted under or required by this Agreement”

Projected District Capital Costs Attachment # 2 City Capital Projects (Table 2)”…………..In addition to showing direct funding from District bond issues, The Financial Plan assumes the Districts will reimburse the Developer for Developer advances to fund a portion of these costs.”

Financial Plan and Description of Significant Assumptions 5. Capital Projects-“.... allocated for District funding (either directly of or through Developer advances subject to reimbursement). 6. District Operations and Maintenance-“…….Developer cash advances are anticipated to be reimbursed by the Districts.” 7. Debt Structure-“Certain amounts required for capital improvements and operating costs are projected to be funded through Developer advances or direct Developer payments, and such amounts are planned to be reimbursed as revenues permit.”

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Scott Wedel 4 years, 12 months ago

It is my understanding that while technically that SB 700 will go through planning as different phases are built, that if SB 700 sticks to the annexation agreement and the zoning definition (no variances) then all that planning can review is whether or not SB 700 is conforming, not whether what is being built is good.

I ask my previous question again - So why is it expected that today's SB 700 annexation agreement going to be so good in 10+ years when the bulk of the construction takes place?

A specific example of something likely to have much different meaning and implications in 10+ years are definitions of affordable and attainable. It is mathematical malpractice to take a statistical average (Average Median Income) and then apply a percentage multiplier (120% of AMI). That formula today produces an income level that seems somewhat reasonable. But it is mathematical malpractice because if the distribution of income changes (ie a greater number making a whole lot) then the AMI will change and the 120% multiplier can be above what almost any family can make in local jobs. The proper mathematical practice is to apply Standard Deviations (ie AMI plus .5 standard deviation). This is important because this is a tourist town that tends to attract wealthy people and with projects like One Steamboat and Wildhorse, they are going to push up the AMI. So in 10+ years, it is entirely likely that SB 700 will have attainable and affordable requirements that are a joke to locals.

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Solo 4 years, 12 months ago

AGM- My first reaction to your personal attack is to “let sleeping dogs lie”, but I guess it is time for some clarification. As we all know, sometimes people are misquoted, not completely quoted or fail to make themselves clear. No matter how much we can use economic diversification and more long term jobs, I do not believe that this community has the “welcome mat” out for an oil refinery, a toxic waste dump or a half way house for pedophiles and rapists. Admittedly, that is the far end of the spectrum. (No matter how tempting it is to say I am equating the above with Steamboat 700, that is certainly not the case.) Nor do I believe it is necessary for the current residents of this community to financially subsidize development. In this time of governmental budget cuts where we have seen cuts in the budget for fire, police, parks and rec, employee payroll and community support, the City and County have spent $2.2 million on the New Victory Highway. The only purpose for this road is to service development west of town. This is only the beginning of the cost to put the “welcome mat” out for development west of town. Hopefully we can all stick to the issues at hand and refrain from attacking the messenger. Have a Happy Holidays.

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JLM 4 years, 12 months ago

The term AMI --- average median income --- is a weird term as the statistical/arithmetic definition of "median" is wholly different from the definition of "average".

Median is the actual middle number in a series of numbers.

Average is the calculated 'sum of all the numbers in the series divided by the number of individual numbers in the series'.

I am not sure that I agree with SW's assertion that pertinent incomes will rise as I believe we are talking about "earned income" rather than "gross income".

In fact, a high net worth citizen may have no earned income and be completely dependent upon investment or capital gains income.

If this were the fact, income levels could arguably decline rather than increase.

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Scott Wedel 4 years, 12 months ago

My point is that it is mathematical bull pucky to take a mean or average (however exactly AMI is calculated) and apply a percentage multiplier. If the numbers are tightly grouped then the 120% could be bigger than the largest number. If high income retirees move to SB then it could result in a number higher than the pay of any local jobs.

The reason that formula is in the annexation agreement is because they had a target number in mind and thus created the formula to reach that number.

But in 10+ years, that formula could, I think likely, result in a number that is a twisted joke on the concepts of affordable and attainable.

Once again - So why is it expected that today's SB 700 annexation agreement going to be so good in 10+ years when the bulk of the construction takes place?

I'd have no problems agreeing to annexing 100 acres according to the agreement and saying it is expected that when that phase is approaching build out then the next phase will be based upon this annexation agreement with adjustments made to adhere to the spirit of this agreement. I think it is foolish to expect that in 10+ years that the community will think today annexation is flawless and would be approved again without any changes.

So why would we approve an annexation agreement today for which the bulk of which will not be built for 10+ years when we expect it to not be what would be approved in 10+ years when the bulk of it is being built? We should not be bad decisions that we expect to mess up issues the next generation.

SB 700 is not a horrible idea. It just needs to be annexed in phases so each phase can be built with corrections and adjustments that corrects the errors of the prior phases.

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Curtis Church 4 years, 12 months ago

AMI is an acronym for "area median income" reported by HUD from information gained by IRS filings, HUD reports this information roughly March of every year. Statistically speaking it has nothing to do with average or mean, just the midpoint for Routt County. The findings are then calibrated for difference in family size.

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JLM 4 years, 12 months ago

c3 --- thanks for straightening that out

Is it based upon adjusted gross income? Or some other measure of income?

Thanks.

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Scott Wedel 4 years, 12 months ago

"Statistically speaking it has nothing to do with average or mean, just the midpoint for Routt County."

If it has "nothing to do with average or mean" then how is the "midpoint" calculated?

"The findings are then calibrated for difference in family size."

Which just goes to show that there is every reason to believe that the adjustment made today could result in a seriously flawed income level when applied to AMI in 10+ years.

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Curtis Church 4 years, 12 months ago

JLM it is based on adjusted gross income.

SW, it is the median, same number of occurances above that number and below, not taking all reported income and dividing by all occurances, basic bell curve. The calibration is due to differences in family size for certain products that HUD or USDA-RD have in mortgages or down payment assistance. For instance, a family of six can have a higher income level and qualify for a product where a family of three would not qualify at the same income level based on other family needs, such as feeding four children versus one child when comparing ability to afford a mortgage.

The AMI has only increased by about 1% per year over the last five, I do not agree with your assertion that the AMI is seriously flawed. We have had wealthy families move into our community, based on sales of expensive homes, but the AMI has not moved tremendously because of the that fact. In fact, you may see the AMI fall for 2009 because of the current economic state.

Your 10+ year argument is important, that is why the City Council made sure that each pod coming through for development would have to go through the planning process. If our community development code were to change because of community will, then the new pod would be forced to adhere to those new rules, whether is happens next year or 15 years from now. The CC also wrote into the agreement that if any part of the agreement details were not met, no further development would be permitted until the issue cured by the developer. This is the case for the phasing of each of the capital items required by Exhibit F. These capital items were negotiated by City Staff, namely John Eastman and then approved by the Planning Commission and City Council prior to the formal vote of the annexation agreement. In summary, the agreement leaves flexibility for changes the community might find necessary.

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aichempty 4 years, 12 months ago

AGM,

You come across as someone who has a lot to gain by the SB700 annexation. Attacking me for being able to read the agreement, apply my personal experience in building houses around here to the problem, and see that none of it will produce "affordable" family housing reeks of affirmation that I am actually correct.

In my experience, attorneys and others who are paid to be persuasive in the face of facts to the contrary always resort to some kind of sarcastic spin founded on an air of personal authority. Heck, that's how President Obama got elected, isn't it? It works. Most people are suckers.

If you want to convice those of us who have been to engineering and GOOD business schools, then lay out your timeline, detail the costs, show where the money comes from, and PROVE with the numbers that anyone except developers and realtors will benefit from this project. They are going to get more money, and the people living in Steamboat Springs are going to have less to spend on other civic priorities, period, Nobody is going to get a price break on housing, because the stuff that goes into housing (labor and materials) cost what they cost; somebody has to pay it.

Realtors and developers are in business to make a profit. Good for them. Our society depends on profits. New residents may benefit from having an expensive home available for them to buy. The real question is still whether growth is desirable for anyone except people who are in the development business. Bigger towns grow bigger problems. Nobody can deny it.

Kathy,

How many affordable units can be funded from the "fee in lieu" and other surces of income? Figure it out. It takes a certain number of dollars for each unit, even with free land. Unless you're an advocate for SB700 sent out to obfuscate the issue, someone who actually cares about affordable housing should be willing to deal with the numbers.

I get the feeling that the only people behind this project outside of the ones being paid to push it through are people who don't understand how to do the simple math necessary to deal with the facts.

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steamboatbusiness 4 years, 11 months ago

Aich, in all your negative responses, I don' t think I have ever come across you offering a solution to our towns problems. If you address a problem, offer a solution to it, otherwise you are just whining. So, with all the people now forced to move to outlying communities because they can't afford to live here, with a direct result being increased traffic in the City and County, how do you propose to resolve this? What is your solution to the degradation of our community feel? How do you propose affordable housing be addressed in this community, or should only the rich such as yourself be allowed to live here? (Is this your motivation- to keep only you and your rich friends here and the working class riff raff out?) What is your solution to growth which is predicted by government powers even higher than your own self appointed authority? Every single issue that Steamboat 700 addresses, how do you plan to address all of them hmm? Let's hear you if you actually have something constructive to offer.

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steamboatbusiness 4 years, 11 months ago

Sorry Aichempty, I just need to actually discredit you and your opinion, because I don't really value what you say if you chose to respond to my above post anyway.

In your comment below you discredit the over 5000 hours of City Staff time, 300 hours of open public meetings, and our elected government officials decision to approve the Steamboat 700 Annexation:

"the only people behind this project outside of the ones being paid to push it through are people who don't understand how to do the simple math necessary to deal with the facts."

So you state here that our City Council members are a bunch of idiots, as well as the city planners, staff and legal team. Wow. Big call. Brave of you to say that John Quinn can't do math, strong stance to take to call Walter Magill and Loui Antonucci idiots, and wow, just ballsy to call John Eastman and Tom Leeson and their teams a bunch of twits. Oh, not to forget also the editorial staff at the Pilot, we can't forget those stupid people too who supported it in this article: http://bit.ly/ueRnw. Oh, and as for those dummies over at the Routt County Board of Commissioners, Steamboat Springs School District, and Yampa Valley Housing Authority, they also can't possibly know what they are talking about when they endorse the approved Annexation because, well, Aichempty has read the Annexation Agreement and doesn't like it, and he went to a GOOD business school, so we better stop it!

I think Aich- Empty that you make my brain Aich with the Empty arguments you put in your blogs, and I choose to believe and support my elected officials and hundreds of other intelligent professionals who have researched, worked countless hours on, supported and endorsed the smart annexation approval decision made by the City Council in October 2009.

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aichempty 4 years, 11 months ago

steamboatbusiness,

Nice try, Counselor, but facts is facts, bro'.

As a matter of fact, I do come equipped with some pretty good credentials, and that's why nobody involved in this process would want me on the team. Knowing what I know, and being able to decipher the details, I would be committing financial fraud if I endorsed the annexation agreement on behalf of the City or any of the supporting organizations.

FACT: 400 units at an average of 1000 square feet and a cost of $100 per square foot is going to cost the City $40,000,000.00.

FACT: The 1/2% transfer fee which is supposed to provide income for the City means that each $1,000,000 in real estate churn would generate $5,000.00.

FACT: $34,000,000 for potable water would require 6.8 BILLIION ($6,800,000,000.00) in real estate sales for the 1/2% transfer tax to cover the cost.

FACT: $40,000,000 spent on affordable housing would required 8 BILLION ($8,000,000,000.00) in real estate sales for the 1/2% transfer tax to cover the cost.

FACT: 1600 market rate, so-called "attainable" dwelling units, would have to generate $9,250,000.00 EACH in real estate sales to cover the costs of 400 affordable units and potable water infrastructure costs at a 1/2% real estate transfer tax rate.

FACT: In order to cover the $34,000,000 potable water cost, tap fees for the 1600 "market rate/attainable" units would have to be $21,250.00 EACH!

FACT: The 5 mil levy called out in the Annexation Agreement works like this. Take the appraised value, divide it by 1000, and multiply by 5. In order to generate $1,000,000.00 in City taxes, the appraised value of property in SB700 would have to equal $200,000,000.00.

FACT: The Heritage Park subdivision has 94 taxed properties, totaling $50,806,442.00 in value, with an appraised value of $2,044,682.00. A 5 mil levy on all these properties would generate $10,223.41 in taxes. Since these homes are real, "attainable" and in the same general area, extending the same figures to a proposed SB700 buildout of 2000 units would generate $217,519.36 per year. In 30 years, at full buildout, in today's dollars the total possible income in all that time is only $6,525,580.85, or about 1/5th of the $34,000,000.000 potable water cost.

So, businessboy, I'd be very happy to see your analysis of the situation demonstrating how all these things are possible, who will pay the costs, what will be the source of the money, and how the City of Steamboat Springs is not going to get stuck holding a dirty bag of financing all this stuff at taxpayer expense.

Having dealt with various boards and authorities around Colorado, I am aware of the fact that NO INDIVIDUAL MEMBER of any board operating under a state charter or any government entity can be held civilly or criminally liable for their actions SO LONG AS THEY ARE ACTING in "good faith" UPON THE ADVICE OF A LICENSED ATTORNEY OR ACCOUNTANT.

(cont)

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sledneck 4 years, 11 months ago

Please, please, please keep on meddling with "affordable" housing. Everywhere it is tried housing prices rise and become more UNAFFORDABLE! My real estate needs a boost. All you little would be napoleons get with it!! Adopt a bunch more regulations, raise building permit fees, force developers to build your dreams at others expense and pave the roads with gold. I LOVE IT.

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aichempty 4 years, 11 months ago

No attorney or accountant is going to be disciplined, disbarred or otherwise punished by the State of Colorado unless they are proven to have KNOWINGLY furnished false information to a client which then resulted in harm, or a loss, to someone. Proving the "knowingly" part to a jury is where the whole thing breaks down, because (as noted on todays, "TODAY" show) 58% of Americans are incapable of computing even basic quantities such as a 15% tip, extending an hourly wage into a weekly gross pay, etc.

So, as far as "stupid" goes, I'd say that somebody involved in this process has been operating under the assumption that the citizens of Steamboat Springs are too "stupid" to figure out that they are going to get "hosed" (to use a nice word) into paying the bills for this expansion of the City into the SB700 community as it has been proposed.

If you read the annexation agreement with the kinds of facts outlined above in mind, it's easy to see that SB700 has promised to spend A LOT of money to make this expansion happen. Unfortunately, they also want the City to spend -- not as much -- but A LOT of money to subsidize the development.

The only way it's going to be possible to offer anything like an "affordable" home in SB700 is with the City of Steamboat Springs providing a heavy subsidy for infrastructure improvements as well as bearing the costs of construction.

I think it is abundantly clear that the 1600 units (aside from 400 'affordable' units) are not going to generate anywhere near the tax revenue for the City that would be required to pay the costs.

So who pays for it?

You criticized me for not having a solution. In my business, there's a thing called "inefasibility," which means that there IS NO SOLUTION within the bounds of the requirements and the constraints placed on the problem.

Maybe it's time for people in Routt County to realize that they are wishing for something that cannot come true without a massive infusion of free money that could be used to donate housing to people who don't want to drive so far to their jobs in Steamboat Springs.

If the voters decide to give a gift to SB700 at taxpayer expense, then our system worked. If not, then our system worked.

Fifteen years and lots of good faith effort on the part of many well-wishing people have brought us to this point, and that's a shame, because the whole idea was infeasible from the get-go.

(cont)

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aichempty 4 years, 11 months ago

Don't forget the wisdom which brought us the didn't-need-to-pay-for-it "injustice center" and the airport terminal which NEVER served a single commercial air passenger. Weren't the people who made those decisions elected officials?

Can I rest my case now?

Go back to basics, lay out the costs, show where the money is coming from, and prove that the City of Steamboat Springs is not going to get hit for somewhere around their fair share of $67,000,000.00 to $100,000,000.00 to cover water, sewer, and affordable housing costs under the current "plan."

Oh, and I take back the "Counselor" remark. No good lawyer would provoke a reasoned, factual response from somebody who knows how to do it unless it was going to support his case.

I bear you no ill will. I wish it was all true and feasible too, but it's not. SB700 needs to pay the costs, and go "market rate," and the affordable housing folks need to face reality. If you want a cheap place to live, move to Brush, or Wyoming, or Kansas. Somebody has to pay the costs of subsidizing affordable housing, and if the City voters want to do it, it's up to their vote.

Either way, I live more than 20 miles from town, on purpose. Whatever happens at SB700 is going to make my property values go up. If nothing is built there, prices will rise due to supply and demand. If they do build there, then the "comparables" will be so expensive that every other place in the County will also go up.

Let me leave it at this. When you purchase a car, or a house, the seller is required to give you a full disclosure of costs before you sign on the dotted line. You know down to the penny with a car, and down to within a couple of hundred dollars with a house, exactly what you're going to pay to own it.

Why hasn't this been done for the City regarding the SB700 annexation?

I believe it's because, if the whole truth was known, the people who have supported SB700, in total good faith, on the "civic" side, would have had to change their minds because of the financial burden the City will bear if it goes through as planned.

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steamboatbusiness 4 years, 11 months ago

Dude, you're killing me. 1. Seriously, do you think you are the only one to factor these calculations into the equation? Do you think you are the only one making calculations on transfer tax revenue? Do you really think you are the first person to have thought about these points you raise? You really do have a God complex. Remember the entirety of the package, not just parts you choose to isolate. It is clear that you do not understand the entirety of the Annexation Agreement. 15 years of creating the WSSAP, 3 years analyzing and creating the Annexation Agreement to match it to the WSSAP goals and you are now accusing all those people involved in the approval of committing financial fraud, how deep is the hole you want to dig here for yourself? 2. Naughty, bad aichempty. You have assumed that because I likely have a business in steamboat due to my name, and that I am intelligent, that I am male. Hmmm, maybe you should rest your case now just to stop embarrassing yourself.

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aichempty 4 years, 11 months ago

busy,

Okay, take it personally. That's a sure-fire way to succeed in business. Does crying help you get a loan down at the bank?

Seriously, lay out the calculations for the voters if you don't like my version.

Show how it's all feasible.

And by the way, I said that I would be guilty of financial fraud if I supported SB700 based on what I know, which is what has been published in the Pilot and what's posted in the Annexation Agreement on the o-fishal website. I don't know what anyone else knows. That is the problem.

I think the fact that nobody has laid out the details with year-by-year projections based on the planned pace of development, projected income, etc., is a telling tale. I think the term would be "projected deficit to be imposed on the City of Steamboat Springs," would it not?

I am sure that other people have done the calculations. I am also sure that some of them are probably giggling with glee over the fact that they are going to get something at someone else's expense if this thing goes through and SB700 sues to make the City perform on it's obligatons under the Annexation Agreement.

I was around 15 years ago when all the discussion went on. I was also around four years ago when my nephew planned to attend a big state university and become a materials science major, and now he's finishing up his accounting degree and seeing no job prospects after coming home at the end of his first semester 3.5 years ago, tanked grades and dropped jaw in hand.

No plan survives contact with reality. Reality is upon us. I am really willing and ready to be convinced that SB700 is good for the community if someone puts the numbers out there for us to see. Without that, the rest is a bunch of marketing B.S. and rhetoric designed to sway those who will end up stuck with the bill.

If anyone could support SB700 based on a detailed, point by point, auditable and traceable analysis of the costs and the funds to pay them, I think it would have already happened. This suggests to me that the analysis has been done, and it's not pretty if you are a resident of Steamboat.

So prove me wrong. It wouldn't be the first time.

Numbers, hon. Show us the numbers.

Tap fees.

5 mil levy.

1/2% real estate transfer tax.

Cost of water and waste-water improvements.

Cost to build 400 affordable housing units (rental or other).

Whip them out for us to see. If you have any credibility to speak for SB700, you should be able to do it by tomorrow. We'll wait.

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pitpoodle 4 years, 11 months ago

I agree with you, aichempty. Steamboat families and businesses will be hit hard by subsidies to the SB 700 annexation. Unfortunately, city staff has told us numerous times that SB 700 will pay for all infrastructure costs. All!!! Steamboatbusiness seems to think that all the information coming from city staff and our esteemed city council is true. They've been sold a bill of goods. I remind you that council made the decision to vote yes to annexation without having all of the facts on how current residents will be affected. I guess that point makes no difference to SB 700 advocates. Also, we do not know that 1/2% real estate transfer tax will hold up to legal challenges. And, as for affordable housing? That is a myth for this project. Can we please think about what these infrastucture and traffic costs will mean for people who already live here? What about their affordability?

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greenwash 4 years, 11 months ago

Aich makes some very solid points.Chad, Curtis were waiting???

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hereandthere 4 years, 11 months ago

Solid points? LOL. His points are flawed on a fundamental level. His ego gets in the way of his thinking. But it is no surprise that he impressed you.

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aichempty 4 years, 11 months ago

hereandthere,

My "ego" is a function of having been in the business of analyzing quantitative data in socio-economic systems for over 20 years, including business experience in Steamboat, building experience in Steamboat, and having been dragged backwards through a keyhole as a result of trusting someone to provide accurate data to me instead of insisting on verification. I got into a deal I should have walked away from.

SB700 would do fine as a market-rate development, paid for by the developers and future residents.

You guys are going to keep poking a stick at me, and when you do, I'm going to take an example from your propaganda and lay it out for examination. One of the points on the "pro" website is that all development costs are going to be "revenue neutral." Over the long run, meaning until full buildout occurs, this may be almost true. Among tap fees, the 1/2% transfer tax and the 5-mil levy, the income to the City may very well be equal to the expenditures for infrastructure and police/fire and other City expenses which will occur.

The problem is that the City will be compelled to spend money up front to provide the potable water and waste water capacity required, and will be -- maybe -- repaid for it in future years.

In the meantime, who carries the debt? The City, obviously. You expect a City with a current annual budget of $17,000,000 to spend $34,000,000 on potable water improvements in advance of SB700 development. Water has to come before dwellings. Anybody can see that. And, if development does not occur as expected, the City will be holding the bag on the debt until it is paid. In the meantime, other City projects and services will have to go by the wayside. Anybody who has a mortgage understands that you have to pay that bill first, or none of the others matter. The City cannot issue municipal bonds to fund water system improvements without devoting a portion of the budget to servicing the debt represented by the bonds. The City cannot default on municipal bonds without making it impossible to issue other bonds for other purposes. If development in SB700 stalls in a few years, the City is still going to be stuck with the expense of providing potable water for the entire anticipated development, and will be left with no way to retire that debt except through collection of taxes from the then-current residents and sales taxes.

So, it appears to me that the "revenue neutral" deal is that the City gets to spend $34,000,000 in the short term, and will be paid back for it over the 30-year anticipated buildout period.

Why not have SB700 post a $34,000,000 bond to cover the costs, and then be repaid as development proceeds?

That's easy. SB700 doesn't want to be stuck with the debt if things don't work out. They'd rather have the City stuck with it in that case.

(cont.)

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aichempty 4 years, 11 months ago

'Splain to me where I'm wrong. Provide the numbers and references to the Annexation Agreement that prove it.

I don't know everything, by a long shot, but I do know enough to ask questions.

We could take the time to do a detailed analysis of projected development, revenue, and all that stuff. I'd only charge you about a half-million bucks for it, because that's what any other reputable consultant would charge to assess the City's risk of going ahead with this thing as currently written.

My opinion is that the Annexation Agreement and the points being stressed by the pro-SB700 side are a "best case" scenario where everybody wins in the long run. In order for this to happen, lots of things have to go right, for a long time, and the City has to be willing to bankroll the infrastructure improvements and wait to be reimbursed as SB700 builds out. Someone needs to be looking at the risk to the City, in financial terms and impact on other City services and priorities, if SB700 development does not proceed as planned, or stalls, or ends up with the developers defaulting on the agreement.

Remember, the Annexation Agreement includes a provision making the individual people behind SB700 immune from any penalty whatsoever if it does not materialize as planned.

The Annexation Agreement also includes an explicit agreement, by the City, to provide the potable water required up to the limits of water actually available for the purpose.

If "they" fail, nobody involved on the developer side suffers beyond the loss of whatever personal investment they have made in the project. The bankruptcy laws take care of the rest. They walk away and do something else. That's how business works in this country.

If "we" fail, "they" can sue to make us live up to our side of the bargain.

The bottom line, which I defy anyone to challenge on a factual basis, is that City residents will ultimately suffer the damage from taking the risk of improving water/sewer infrastructure ahead of development if build-out does not occur as planned.

So, it seems to me that we have a situation where the City has to do something at-risk, and then SB700 has to do something at-risk, and then when both of those things go right, the City will obtain revenue in the form of real estate transfer taxes, a 5-mil levey on property values, and increased sales tax revenues resulting from more residents and increased retail sales in the promised retail development planned as part of SB700.

90% of new businesses fail in the first year. SB700 is, in every sense of the word, a "new business" which may or may not succeed. The City should not be stuck with the cost of an unnecessary expense (potable water and waste treatment infrastructure improvements) if SB700 fails.

If the developers are not willing to take the financial risk and wait to be paid back as development proceeds, then why should the current residents of Steamboat Springs take it on?

(cont)

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aichempty 4 years, 11 months ago

I am quite willing to acknowledge that SB700 has promised to do a lot of good stuff as part of their proposal. The schools, shopping, "TWO DOG PARKS," etc., are all very desirable. The land for somebody else to build affordable housing is also a good deal, as far as that goes.

Are the promised goodies enough to sway the voters into taking the financial risks that will result for the City? That's what each voter has to decide.

According to http://www.city-data.com/housing/houses-Steamboat-Springs-Colorado.html there are 9088 residents in Steamboat Springs, and 6381 "houses." I think the data may be fishy, but as an example, if we take 6381 "houses" and stick them with the $34,000,000 cost of providing water and crank in $40,000,000 for "affordable" housing units to be built at City expense, that's just a hair under $11,600 per "house." In order for the City to spend the money up front on these two objectives, that's how much debt per "house" would be required to fund them. To make these two dreams come true in a 2-3 year timeframe, the City would be forced to raise the money by issuing municipal bonds. The affordable housing portion could obviously be phased, and as units are sold, the debt would be retired -- but what about rental units? Who is going to buy them? They would generate income, but it would take 15 years or more to pay off the cost from rental income. In order to provide 400 affordable units, the City would have to swing the financing for construction of units to be sold, and carry the debt for rental units unless investors could be found to buy them too. (not likely to happen in a rent-controlled scenario)

If the City gets stuck with holding these debts, and the income to cover them does not materialize, there are two options. Default on the debt, or raise taxes to raise the money. Taxpayers would -- probably -- not approve a tax increase to cover a bad debt. (TABOR is still around, right?). So then what? Steamboat Springs would be in default on the debts, and borrowing more money for other purposes would either be impossible, or much more expensive (higher interest would have to be paid).

So, the uncomfortable truth is that current residents run the risk of getting stuck holding the bag if things don't work out.

The assertion that, "If there is no growth, the City will bear no expense of development" is pretty much a denial of the fact that without spending for infrastructure by the City, there cannot be any development. It's a Catch-22.

Before I close this, let me say that I misstated the annual budget. It was around $27,000,000 in 2008. $17,000,000 is the personnel budget.

It's also interesting that the taxpayers rejected a $34,000,000 recreation center in the 2008 election. That would have brought something for current residents. How does spending $34,000,000 on water for prospective future residents compare?

I guess we'll find out when the mail arrives in the clerk's office.

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cindy constantine 4 years, 11 months ago

How about it, investigative reporters at the Pilot? As a community newspaper your job is to keep the reading public informed of the activities effecting us. This is one the the most important decisions this community will make for years!! Why not put some effort into confirming or disputing aichempty's analysis? Try your best to be impartial and DO YOUR JOB!

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AGM 4 years, 11 months ago

I know I'm going to regret asking this, but Aich can you please explain how the city will be faced with an expense of $40M in affordable housing costs? You don't win a prize for most words typed, but if you can focus on one thing at a time here and break down your $40M expense I'm sure I wouldn't be alone in wanting to know some details.

I know you typed this earlier: "FACT: 400 units at an average of 1000 square feet and a cost of $100 per square foot is going to cost the City $40,000,000.00."

Are you really of the mind that the city will be faced with one giant expense to build affordable housing and that there will only be expenses and no revenues from such an endeavor?

With the exception of the Iron Horse, which makes a great whipping boy - can you point to any affordable housing project in which the City has paid giant dollars and has somehow found itself so upside down on the financial side?

Focus - please try to stay on topic and share your "logic" with us......a proforma of sorts. Show me how I will have to pay my share of $40M in additional taxes just for affordable housing.

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aichempty 4 years, 11 months ago

Cindy,

I am not "for" or "against" SB700. I am for letting the voters make an informed, rational decision based upon the unbiased facts.

Nobody is providing a balanced view of the issues. SB700 and their supporters are pushing the positive aspects, and we must all admit that there are many positive things about the proposed development.

For example, the promise of a $350,000 "affordable" 1000 sq ft dwelling is very appealing for people who want to live in ski country in a low-maintenance home. Compared to other housing near world-class resorts, that's a dadgum bargain and a lot of people will jump on it. Compared to slopeside condo prices, it's a fantastic value. A million dollars buys you ski-in, ski-out, while $350k buys you a 15 minute drive to Gondola Square. Add in the retail stores (easy grocery shopping, I hope), parks, etc., and it really does sound appealing.

The part that galls me is that people on the "pro" side are not willing to discuss the loopholes and pitfalls, preferring instead to cling to things like the technically-correct but misleading "revenue neutral" claim, and giving it equal billing with "TWO DOG PARKS!"

The Pilot is not going to do an in-depth piece on SB700. Most of their advertising is from realtors. The Pilot does a fine job with what they do, but they don't have the depth to branch out and cover tough issues in such a small town where real estate is the second biggest industry (or is it first?).

The truth is that most people around town don't care about SB700, won't vote, and will never know the difference unless things go bad and their own lives are impacted by it. I doubt that more than a handfull of people are reading any of this. It's far too complex for people who don't have JLM's background, for example, to really understand.

Take the average person who would like to buy a home. Will they vote against SB700? I wouldn't. There's a chance that voting "yes" will give them a shot. It probably won't turn out that way, but voting "no" guarantees that nobody will have a shot.

It's very easy for people to vote "yes" knowing that close to 10,000 other people are going to absorb the cost. The cost won't be felt for 1-3 years anyway, and anything can happen in that time. This is how people got into mortgages three years ago that are being foreclosed today.

I have hoped that someone on the SB700 side would come forward with factual and quantitative rebuttals to my posts. I'd like to know how much I don't know. I've learned more from JLM than anyone else.

So far, the only thing that has come back is "you suck," so I guess I must be close to the mark.

I predict that SB700 will be annexed, and that the affordable housing crowd will end up with a few minor successes, but overall, it will be a $500,000 to $1,500,000 neighborhood, and that's probably what the developers intended all along. In that sense, it will be a success.

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cindy constantine 4 years, 11 months ago

Aich,

I have known all along you are not for or against the project and are just trying to distill the information provided in the agreement. And for that I just say thank you. However, I think you would be surprised at the number of realtors who signed the petition (and bankers I might add). Also, I do think that more people will vote on the issue than you might anticipate. We could not have gotten more than 1,500 sigs in less than 3 weeks if there was not a lot of interest in this issue. You are right that people are against this annexation for many reasons--I wrote down 16 reasons that I heard going door-to-door. Again, for the few who do read this blog I would challenge any one of them to dispute the amount of money the city will have to front to adhere to the agreement as written. I have a list obtained from the city of all the dozens of investors who are part of Steamboat 700 and only 2 have a Steamboat mailing address. One individual's name has already been published as a member of "Good4Steamboat" and an LLC that could have 5 or 500 investors--who knows--their names are not available. Anyway other than you and maybe JLM, every other blogger has a pro or con bias and an impartial 3rd party needs to be involved. Who other than the paper do you suggest?

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aichempty 4 years, 11 months ago

AGM,

The proposed development includes, according to what Kathy Stokes pointed out above, 15 acres that is supposed to be enough land for 400 affordable units. Proponents claim that some of them must be rental properties.

Even with free land, building cost has to be at least $100 per square foot. Given that 1000 square feet is almost a minimum size, it works out to at least $100,000 per unit. That's a ridiculously low estimate. $200,000 is probably more realistic.

400 units would be at least $40,000,000 (400 x 1000 sq ft x $100 per sq ft). It could easily be $60,000,000 or $80,000,000 looking at current sales figures for cost per square foot.

Let's say that only 200 rental units are ever built. That's going to cost at least $20,000,000 whether they are built 10 or 100 at a time. The City is not going to be able to sell them to investors to operate for a profit, because no investor is going to accept a permanently rent-controlled property restriction. So, the City is going to be stuck with carrying the financing burden on them. It's true that rent will come in, but that will have to cover maintenance, utilities, employee costs (somebody has to manage the places) as well as repayment of construction costs. The City will therefore have a lot of money tied up in any City-constructed rental housing for a long time.

If the City takes on the burden of constructing for-sale units, they're going to have to pay for the construction up front. That's money that's going to be tied up until it is recovered. If the City cannot sell the "affordable" units, they will have to rent them, and that will tie up the money invested in them.

So, is it $40,000,000 all at once? Maybe not. It depends on what can be built, and for how much.

What about $20,000,000 all at one time?

What about $10,000,000 all at one time?

Whatever it is, add it on top of $34,000,000 all at one time that has to go ahead to provide the water.

People are going to expect the City to build housing out there, and the point is that NONE of it is financially feasible without taxpayer supported financing to have working capital. It may all eventually be repaid, but in the meantime, the City has to be the bank that doles out the money, and it has to come from somewhere so the City can dole it out. That means borrowing it. It's the only way to get enough money for the City to cause affordable housing to be constructed.

What this really means is that very little, if any, affordable housing is going to come out of this project. SB700 scored a coup by donating land instead of paying fee-in-lieu or taking on the burden of constructing "affordable" deed-restricted units. The cash flow from the mil levy and transfer tax won't even put a dent in what it will cost on an annual basis to build affordable housing, so all that money has to be borrowed and paid back, and that keeps the City on the hook.

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aichempty 4 years, 11 months ago

Let's look at another issue regarding affordable housing.

Right from the U S Department of Housing and Urban Development website, it says:

"Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint."

So, how will the occupants of subsidized housing be selected? According to HUD, the only criteria which can be applied legally is "ability to pay."

How will the local authority in charge of selecting occupants deal with a situation where a family of four is competing with four single individuals to rent a 2-bedroom apartment? Okay, so make it a family of four versus one or two single individuals who want to rent the same place. If any criteria related to "family status" is applied to reject one over the other, it's against the law.

So, if you make it first come, first served, then how does that benefit locals who don't want to move away? Can a couple of kids who graduate from high school run down and rent an affordable apartment if they're all taken up by people who moved in to take jobs in town? Can you deny a rental to someone who currently lives and works in Oak Creek, but would work in Steamboat if they had a nearby place to live?

Even the idea that the sale or rental price would be defined by a person's family status and income opens up a whole container of invertebrates. More from HUD includes:

"What Is Prohibited? In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:

Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) or Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing."

That one about "set different terms" would seem to apply to our local affordable housing initiatives.

So, can someone involved with the affordable housing process address these concerns? There are some exemptions under the law, but I cannot see how any of them would apply to a program funded by tax dollars and administered by the City of Steamboat Springs.

I think you have to build the units, set the rental price, and then make them available to anyone who wants to move in who can pay the rent. Same for sales.

Anybody else have a different spin on this?

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aichempty 4 years, 11 months ago

Cindy,

Nobody can compel the Pilot to take on such a job. I am surprised that they allow a lot of my stuff to stay on here, given the real estate money spent on advertising.

The City Council and staff should be putting this information out. Surely somebody down there knows how to use a spreadsheet and do cost and revenue projections.

If not, the City has no business jumping into this mess.

The City has spent a lot of money on various consultants for various purposes over the years, and this is surely a case where some investment of tax money is warranted before obligating the City to voluntarily spend more than the total annual budget to support a single for-profit venture.

I wish it was true. I wish SB700 would solve all our problems. I might even want a place in there myself some day.

From what I see, it doesn't add up. Maybe I'm just stupid. Yeah, that must be it.

Ignore me.

Let's take a chance on it. Maybe it will work out.

What do we have to lose?

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cindy constantine 4 years, 11 months ago

Aich,

I just have one question for you if you put on your builder hat. As we know Steamboat 700's ultimate goal is to sell off up to 7 pods (got that directly from planning). Seeing how onerous the annexation agreement is would you consider buying a pod if the timing for development was right and if so how would you determine the price considering the financial obligations you would be taking on? JLM, I would love your response to this as well. You also ask why not take a chance? Easy answer---if it does not work out as planned, we cannot UN-annex the beast.

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Scott Wedel 4 years, 11 months ago

The economics of SB 700 is not about building it now, but building it when lots and housing is scarce. And since SB 700 controls most of the land in the WSSAP, then they can wait and not be too concerned about other projects going first. If they don't develop quickly then they can help create they scarcity they need.

It will be the same as what happened between WSSAP designating the Brown property as the future growth area and how long they waited between selling it. (And, oh by the way, only after claiming certain requirements made development uneconomical and getting those removed - who thinks that cannot happen again? Why won't the developers wait 10 years and then say they need concessions from the annexation agreement or "it'll never be developed").

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cindy constantine 4 years, 11 months ago

Scott,

I believe there are a couple of flaws in your thinking. There are two exhibits subordinating 2 mortgages to the annexation agreement totaling $11,000,000 owed to a local bank. Using a 7% interest rate means interest payments of $770,000 per year plus taxes, legal, marketing, salaries and who knows what other expenses. I am sure this property is costing them in excess of $1,000,000 per year in carrying costs before the first cup of dirt is even moved. If the annexation agreement passes then they will be liable for approx another $1,000,000 over 3 years to firm up the water. If the buyers of the pods do not materialize rather quickly, just how long do you think they can keep making capital calls on their investors? A savvy investor is certainly aware of Intrawest's financial troubles. If it really does take 8 to 10 years to work our way thru the existing inventory, the project will surely be "underwater". In talking with a Steamboat real estate broker recently, he indicated that even in the great years of 2006-2007, there were about 65 residential lots (acreages not included) sold per year. In the last 18 months, less than 10.

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JLM 4 years, 11 months ago

It is not unusual for a project of this magnitude to take 10-20 years to be absorbed. Anybody sponsoring this project better have some very deep pockets and some very patient money. This is a project for "slow capital".

Remember we are in a period of deflation and we have fiscal policies in place --- artificially low interest rates, mad money supply, contracting commodity prices, declining wages --- which when reversed absolutely ensure high rates of inflation.

This project will be reaping the "benefits" of that inflationary cycle when most of the dirt gets sold.

Nonetheless, these are also opportunistic times. If you can hold onto a project like this, you will surely make money in the long run. Again, the money has to be patient and cautious.

If there is a financial failure at some time in the offing, then the principal basis of the project is simply going to be "marked to market" in some re-pricing exercise and the ownership of the deed is going to change. Dirt never just goes away. When projects fail financially, all that is happening is "creative destruction" in which the failure is simply another experiment in "discovering the right price" for the asset. Again, dirt never goes away.

This project will ultimately get built in some form or fashion, the only real issue is whether it will be by this owner or a subsequent owner. And, sure the political landscape will also change and what was important today will NOT be as important tom'w.

The economy will recover and while things look decidedly grim just now --- I don't see a single thing the administration is doing economically that is working on the job front or on the stimulus front & if it were, we would be hearing more about it --- they will get better and when they do, they will get very, very, very good.

Of course if you eat beans out of pot for long enough, a cut up hot dog looks pretty damn good!

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JLM 4 years, 11 months ago

Even more important is the basic economics of travel and ski industry entertainment. At $100 for a lift ticket, this is a sport with a shrinking customer base and those customers are going to develop other preferable and less costly entertainment/vacation alternatives.

It is a mystery as to why there is not more "promotional pricing" in an industry which is clearly operating at a low percentage of capacity. Every unoccupied lift seat that speeds up the mountain is "lost business" and inventory that is lost for all time.

While there is some little "loyal customer" program at work here in the 7-day lift pass, the principles of "affinity group" pricing and "loyal customer pricing" --- like the airline industry and like a freakin' Starbux --- is going to have to take hold in order to barter that excess inventory.

An empty lift seat is just like an empty hotel room --- you would be nuts not to "barter" almost any fractional return for it not to expire worthless. After all this is why Priceline exists to create a marketplace for inventory which expires worthless if not used.

Somebody is going to figure this out some day.

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weststmbtres 4 years, 11 months ago

Anyone who thinks S700 is a good idea should watch this video. It's from the Jim Lehrer News Hour on PBS

http://www.pbs.org/newshour/video/module.html?s=news01s36b0qd02

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Steve Lewis 4 years, 11 months ago

The Pilot has made it clear that voter education on Steamboat 700 is very important (11/29/09): “We would argue that a vote on the Steamboat 700 annexation ordinance is of even greater importance when you consider the implications. This issue is too crucial for voters not to make every effort to get the facts and consider the long-term impacts to the community and county.”

It’s a laudable statement. I suggest the Pilot revisit the meaning of this statement with its advertising department. Consider 700's color ad, page 9, this Friday's Today. In my opinion the ad misleads us as to what 700 is actually delivering. The ad says: "The Annexation Agreement includes: Guaranteed Affordable and Attainable Housing".

The advertising department is comfortable some affordable units will be built. Never mind any guarantee of reaching the 400 affordable unit threshold this community bargained for. That guarantee cannot be made - we’ve shown that a future rise in interest rates will reduce the units we’ll get to well below 400.

My complaint was not even close to hitting the Pilot’s ad standard. If an ad’s promise or guarantee is “in the realm of possibility”, that ad will run. Even though the Annexation Agreement anticipates 700 will not build ANY of the affordable units, 700 is free to advertise a guarantee that the units will be built.

I’m sorry, but the Pilot cannot call for “for voters… to make every effort to get the facts” and abuse those facts with the Steamboat 700 ads they’ll print in their own paper.

Given the low standard, I’m willing to quibble: Does the Annexation Agreement “guarantee” Affordable Housing will be built? Show me where.

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