Post office plan on track?

Postal Service, developers seek to iron out differences in deal

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— The vital signs of the real estate deal that would facilitate moving the Steamboat Springs Post Office out of downtown were stabilizing Thursday after U.S. Postal Service officials pulled back from earlier statements that the move was off.

Two spokesmen for the Postal Service in Denver contacted the city of Steamboat Springs and the Steamboat Pilot & Today on Wednesday to say the deal with developers Brian Olson and Rod Forrester was dead. However, Olson insisted he still was in a contract to build a new home for the post office in the first phase of the proposed City South project on a vacant parcel on the southwest corner of U.S. Highway 40 and Pine Grove Road.

"Nobody has paid me the courtesy of telling that to me," Olson said Wednesday afternoon. "Hundreds of thousands of dollars have been invested in this project, and as far as I'm concerned, it's not going anywhere."

By Thursday afternoon, it was apparent that the two sides had different takes on a letter Olson sent to postal officials seeking to reopen the terms of their contract. The contract calls for the developers to build the new post office and essentially swap it for the real estate associated with the downtown post office at the busy corner of Lincoln Avenue and Third Street.

Gabriel Benvenuto, a manager of realty asset programs for the Postal Service, said he took Olson's letter for an ultimatum. Olson said that never was intended. He expressed his dismay that the post office had taken the story to the newspaper and city government.

During a conference call with postal public affairs official Al DeSarro on Thursday afternoon, Benvenuto opened the door for going forward with the plans. However, he said he would insist that the original terms of the contract be adhered to and said he would ask for renewed assurances from the developers that they had the financial ability to deliver the completed project.

"We don't want to constantly end up with these problems as we go through the process," Benvenuto said. "We have to protect our customers and our ability to offer uninterrupted service."

Asked whether the deal still could go forward if he received the assurances he sought, Benvenuto said, "We'd discuss it at that point."

In the meantime, Deputy City Manager Wendy DuBord had fired off a memo to City Council on Wednesday alerting them that the deal to move the post office appeared to be off the table. She said she was not interested in getting in the middle of the deal between the developers and the Postal Service but expressed serious concern about the intent on the part of the Postal Service to continue with plans to close the satellite post office at Sundance at Fish Creek and permanently move those 2,584 post office boxes into the downtown space formerly occupied by Coldwell Banker Silver Oak's real estate office.

She received word of the changes from Leigh Hettick, the Postal Service's district facility activation coordinator for Colorado and Wyoming. Hettick previously has spoken before City Council about the planned move.

"I told (Hettick) this was a huge problem for the community as that is a big impact to traffic congestion, pedestrian safety, parking, etc. I also stated that CDOT may have some concerns about an additional 2,500 users at this location off Highway 40," DuBord wrote in the memo.

DuBord confirmed that the Postal Service is not obligated to go through the city planning process. However, DeSarro said the Postal Service remains committed to working closely with the city to address community issues such as downtown traffic congestion and soon would come forward with a series of proposals.

Deal hits the pavement

The trouble between the developers and the Postal Service centers on a May 29 letter Olson sent to Benvenuto seeking to renegotiate several financial and development components in the deal. Those components include a $1 million payment due to be made to the Postal Service by the developers and the number of underground parking spaces that would be assigned to the new post office.

However, Olson said he most was concerned with the volatility of real estate values in Steamboat Springs and the terms of the swap for the two buildings.

The new post office building will be appraised upon completion, Olson said, and he's concerned that if a gap opens between its value relative to the value of the downtown location that was set 18 months ago, he and Forrester will have to make up the difference in cash.

Benvenuto's June 3 written response to Olson's proposal was blunt: "The postal service has reviewed the proposed changes to the agreement and with this letter we are advising you that we see no benefit in agreeing to these changes."

However, the real sticking point was Benvenuto's understanding of the language in Olson's letter that led to Wednesday's statements that the deal was off.

Reading from the letter, Benvenuto said Olson informed him that: "We are committed to moving forward on the project. However, the following terms must be reconsidered, or changed in order for us to continue on the path of realizing a new post office for Steamboat Springs."

Benvenuto took those words to mean an unwillingness to change the terms of the contract would be a deal-breaker.

"Obviously, they misinterpreted the letter," Olson said. "We're going to do everything we can to keep this on track."

"Everything," Olson said, includes going to Benvenuto's bosses and a Postal Service executive committee in Washington, D.C., which he said has the final say in the matter.

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