Work continues Wednesday at the base of Steamboat Ski Area.

Photo by Matt Stensland

Work continues Wednesday at the base of Steamboat Ski Area.

Steamboat City Council confident in $21 million refinancing for base area

Hermacinski: "I’m a curmudgeon on this normally, but I’m ready to go for it."

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Agenda

(Times are according to Urban Renewal Area Advisory Committee estimates)

1 p.m. Administrative items

1:10 p.m. Discussion of funding and budget for future work on public promenade and daylighting Burgess Creek (10 minutes); update of construction process (10 minutes)

1:30 p.m. Discussion of needed ventilation improvements for Torian Plum Plaza parking garage and possible sources of needed additional funding (40 minutes)

2:10 p.m. Miscellaneous items (10 minutes)

If you go

What: Meeting of the Urban Renewal Area Advisory Committee

When: 1 p.m. Friday

Where: Centennial Hall, 124 10th St.

Call: Base area redevelopment coordinator Joe Kracum at 970-871-7077 for more information about construction at the base of Steamboat Ski Area.

— If the base area sees sharper-than-expected drops in property values and no new construction in the next 19 years, Steamboat Springs could be on the hook for more than $2 million throughout the next two decades, according to the proposed $21 million refinancing package for redevelopment work.

That’s the worst-case scenario of the refinancing plan for which the Steamboat Springs City Council expressed unanimous support Aug. 3.

The new $21 million package would pay off the city’s $17.5 million base area loan and enable completion next summer of work at the base of Steamboat Ski Area.

That work includes a public promenade, the daylighting of Burgess Creek, public walkway improvements and underground utility upgrades. City finance staff will prepare the documents for final approval next month.

“I’m a curmudgeon on this normally, but I’m ready to go for it,” City Council President Cari Hermacinski said last week about the new deal.

City Manager Jon Roberts and interim Finance Director Debra Hinsvark said the $21 million would come through the Steamboat Springs Re­­development Authority’s — effectively, the City Council’s — sale of fixed-rate municipal bonds that would be paid off with base area tax revenues and backed by the city’s “moral obligation.” That means if base area revenues do not meet the debt requirements, the city would have to pay the difference out of its general fund reserves.

According to the city’s risk analysis, if assessed property values at the base area drop 30 percent by 2012 — 2011 is a valuation year — and there’s no new construction through 2029, the city would be on the hook for only about $11,000, total, through 2029. But if assessed values drop 35 percent by 2012, drop another 5 percent by 2014 and there’s no new construction for two decades, the city’s obligation for the redevelopment debt would reach a total of nearly $2.2 million by 2029.

Hinsvark said the city’s general fund reserves ended 2009 at just about $15 million, more than $9 million of which she described as “totally undesignated.” She noted that should the city’s obligation kick in, the Redevelopment Authority would pay back the city’s contributions through future base area revenues.

Roberts said the City Council’s other option, keeping the redevelopment funding at $17.5 million, would have been a safer choice.

“There’s more cushion protecting the city if you go with the smaller issuance,” Roberts said earlier this month. “However, the projections show there is coverage even with the larger issuance.”

He added that changing the loan from variable rates to a fixed rate adds security for the city, and refinancing at $17.5 million likely would have extended base area work throughout the next several summers.

“The daylighting of Burgess Creek would definitely not get done unless we have the additional financing,” Hinsvark said.

Base area redevelopment coordinator Joe Kracum said although the new financing plan would not drastically change base area construction plans for the rest of this summer, it would enable completion of the current slate of high-profile redevelopment projects next year. Some final landscaping items could stretch into spring 2012, he said.

Remaining work for this year includes completion of “98 percent of the utilities,” Kracum said, and grading of the hillside leading from Torian Plum Plaza to the Sheraton Steamboat Resort and Gondola Square.

The Urban Renewal Area Advisory Committee meets at 1 p.m. Friday in Centennial Hall to discuss base area funding, financing and construction plans.

“This is a project that the community has wanted for many years and has put a lot of effort into,” Kracum said. “I’m really happy for the community and the base area that their wonderful piece is going to get done now.”

Comments

housepoor 3 years, 8 months ago

Values are down 30%+ already with no bottom in site yet not sure what they are thinking? I guess by the time no construction comes into play they'll all be long gone......

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Scott Wedel 3 years, 8 months ago

And how confident was the City regarding the new terminal building at the STOL city (Bob Adams) airport?

And how confident was the City regarding Iron Horse?

A confident city would appear to be no promise of success.

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John Fielding 3 years, 8 months ago

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If I understand it correctly, there is no city money going into this at this time, and will not be any until many years of the worst case scenarios persisting.

Even if that happens the base area properties are still obligated to repay the city's expenditure in servicing the debt.

So unless the resort economy collapses more or less completely and permanently the city will not be out the money.

I am sure that by far the majority of residents here have staked the investment of their lives and fortunes on the basis that such a complete collapse will not occur. If it does we will not have 2 million left anyway, nor most of our populace.

So we will have to make it work, and we can.

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ybul 3 years, 8 months ago

John,

You asked me to talk at a transitions meeting, which focus' its efforts on transitioning away from the oil based economy we have today. Can I ask if you believe the propaganda that is espoused by that organization, then I think you ought to rethink your positions.

On the properties obligations to repay the debts, those repayments might come AFTER the city is forced to cut its budget to service its debt obligations for the library, the iron horse, open space and a promenade.

That debt is the first obligation that needs to be met, in a fiscally sound world.

Yep I am pointing out the negatives again. I can point to many positives in other areas, I think that the real estate bubble is far from over and just because many have placed their stakes that the resort economy to thrive, that does not mean 100% of the population should be saddled with their bets.

Sorry but things change and sometimes people should rethink their positions and know when to hold them and know when to fold them.

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pitpoodle 3 years, 8 months ago

I don't know but it sure sounds like their highly optimistic view of income ala SB 700. I hope I am wrong. No one (especially Council) should believe that we, as a community, are out of the woods.

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John Fielding 3 years, 8 months ago

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John W, I have to stick to my "glass half full perspective. My support for Transitions to sustainable alternatives does not motivate me to discard the existing means for supporting our civilization.

If we are successful in moving from imported fuels to domestic resources, especially new technologies, to a substantial degree within the 20 year term of this bond we will likely have so much additional wealth in this county that over-development at the base area will be an issue.

That is the future I am working to create.

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ybul 3 years, 8 months ago

My glass "is only" half full perspective requires that I plan for the worst and hope for the best. This plan appears to plan for the middle ground or best, with little thought given to a worst case scenario.

The unwinding of debt is the real problem facing us today, not peak oil, or anything else. The overindulgence of yesteryear needs repaid and we must live below our means for a time so that we can pay down our debts. This unwinding is going to cause deflation in want items (second/vacation homes even vacations) and as we financed our extravagance through foreign governments it will most likely cause inflationary pressures for need items (food/energy).

I see the glass as more than half full with boundless opportunities, as long as the government does not make it impossible for small businesses to compete with the corporations because of easier access to capital, red tape, etc, that make it hard for the small guys.

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John Fielding 3 years, 8 months ago

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John, I agree completely that the debt problem is enormous. I believe the best way to solve it is by the true stimulus of new industries meeting existing energy demands with new products.

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