Steamboat Springs All three proposals for new management of the Iron Horse Inn have local ties, and one includes a use other than a hotel, city officials said Monday.
Anne Small, the city’s purchasing and risk manager, said a committee will interview potential new managers for the embattled inn Monday. Interim City Manager Wendy DuBord and Small declined to discuss the specifics of the proposals. A committee will evaluate them before making a recommendation to Steamboat Springs City Council, which will select the inn’s next operator.
“There were three very different proposals,” Small said. “We had nothing pre-determined.”
She said the evaluation committee includes City Council members Meg Bentley and Bart Kounovsky, city Finance Director Deb Hinsvark, Planning and Community Development Director Tyler Gibbs, and members of the Steamboat Springs Building Corp.
Bob Litzau of the city’s Finance Department said the Steamboat Springs Building Corp. is a separate legal entity, “essentially a private company,” that legally owns the Iron Horse and is leasing it to the city. Litzau said the corporation bought the inn entirely with city dollars and the city ultimately is responsible for debt on the inn.
“It’s a legal issue that we had to do to accomplish the financing,” Litzau said.
Building Corp. directors include Hinsvark; Dean Vogelaar,
president of the Steamboat branch of Mountain Valley Bank; and Dale Mellor, finance director for the Steamboat Springs School District.
The city terminated its lease agreement with former Iron Horse operators New West Inns and took over management of the Iron Horse in January.
New West operated the Iron Horse since November 2009 and encountered a series of financial troubles that left New West owing about $77,000 to the city.
Small and city attorney Tony Lettunich said Monday that nothing has been paid on that debt, which includes a $54,000 promissory note signed by New West manager Jesse Allison.
“We’re considering legal action both against New West Inns, LLC, and against Jesse Allison,” Lettunich said Monday.
He said he had no timeline for when that action could occur.
Small said the Iron Horse, between U.S. Highway 40 and the Yampa River just south of downtown Steamboat, has seen improved performance under city management.
“It’s doing very well right now,” she said. “Almost every Saturday they’ve been 100 percent full.”
City Council bought the Iron Horse Inn for about $4 million in 2007 in an effort to provide affordable housing for city employees. But the inn has struggled because of several factors, including the economic recession. The city’s debt service on the Iron Horse was projected to cost more than $340,000 in 2010.
— To reach Mike Lawrence, call 970-871-4233 or e-mail mlawrence@SteamboatToday.com