Steamboat City Council to revisit sales contract for downtown building

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Past Event

Steamboat Springs City Council meeting

  • Tuesday, January 8, 2013, 5 p.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

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— Before it adjourns Tuesday night, the Steamboat Springs City Council could receive a pay raise, endorse a plan to add Steamboat's downtown historic district to the National Register of Historic Places and modify the sales contract for the city's downtown emergency services building.

Early in their meeting that starts at 5 p.m. in Centennial Hall, the council members will discuss potential changes to the proposed sales contract of 840 Yampa St. to BAP, Big Agnes and Honey Stinger for $2.1 million.

By a 5-2 vote last month and after more than an hour of public comment, the council approved the first reading of the sale.

But some members said that before they weigh a second and final reading Jan. 22, they want a chance to strengthen or modify some of the claw-back provisions city officials added to the contract to protect their sale and ensure the buyers remain in the building.

In addition to allowing the police and fire departments to temporarily remain in the building after the sale, the claw-back provisions aim to prevent the buyers from selling the building's parking lot parcels without city approval for seven years.

During that time period, the outdoor retailers also must occupy at least half of the building, or sell it back to the city for the sale price.

Council member Cari Hermacinski, who opposed the sale of the building with council member Walter Magill, said at a meeting last month that she wasn't satisfied with the claw back provisions.

She said if BAP, Big Agnes and Honey Stinger don't occupy half of the building as required, the city may not be able to afford to buy back the building at the sale price.

Council member Sonja Macys also wanted to see the contract amended, but in a different way. She said the contract should be changed to make the sale contingent upon determining the new permanent location for the firefighters and police who work in the current downtown headquarters.

Macys and the other four council members who voted to approve the first reading of the sale said they were comfortable with the sale price and other major components of the contract.

City officials hope the council will be able to choose a plan to build new police and fire stations before it is scheduled to vote later this month on the final reading of the current emergency headquarters.

Other meeting highlights

• Pay raises

According to Tuesday night's agenda packet, council's pay rate can be increased each January based on “the percentage increase in the Denver Boulder Consumer Price Index for the twelve-month period most recently computed by the U.S. Department of Labor.”

Council voted to forgo increases during the past three years, and instead has taken a 10 percent pay cut each year since 2009. Their pay cut again was approved last year when council voted on the city's 2013 budget.

The proposed pay increase is 10.4 percent, or a total of $6,300.

• Historic designation

Council could vote to support a resolution recommending that the Steamboat Springs Downtown Historic District be included in the National Register of Historic places. According to Tuesday's agenda, the process to define a downtown historic district started in 2005 at the request of Mainstreet Steamboat Springs. Downtown historic district includes Lincoln Avenue “roughly bounded by 5th Street to 11th Streets,” according to the agenda.

Planning Director Tyler Gibbs wrote that there are “great benefits associated with designation and (the) listing is honorary with no restrictions for properties.”

To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com

Comments

Scott Wedel 1 year, 6 months ago

The idea that they want to modify the "clawback" provisions should be (but won't) a red flag warning that the deal is fundamentally flawed. Clawback provisions are not normally part of real estate sales contracts.

The clawback provisions are needed to correct various fundamental flaws in the sales contract. A clawback covering having new fire and police stations is needed because normally no one sells their current essential property without having new facilities. Since City is not willing to consider doing it the normal way, they have to invent clawbacks to cover what happens if new isn't ready in time.

A clawback provision regarding occupancy is needed because the current sales price is a massive gift/subsidy to BAP and the city wants to be sure BAP does what the city wants with the gift.

Clawback provisions are generally a nightmare because to be enforced requires going to court to take back money based upon contract wording. Almost always the clawback is contested because the person given the money got legal advice that they did enough to keep the money.

I have no hope that this epic mistake can be stopped. If the city council so easily ignore Scott Ford's letter signed by leading local business owners then they are simply unwilling to listen. But at least it will be clear that city council and city staff were told why this was a bad idea. So then they can swept out at the next elections.

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rhys jones 1 year, 6 months ago

SO THEY'RE MAKING $70,000 A YEAR NOW? For virtually giving away City property? I'd really like to see who voted which way on THAT one. Legal thieves, that crowd.

That's good work, if you can get it.

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Scott Wedel 1 year, 6 months ago

Though, if there were clawbacks on the pay of city council members, city manager, city finance director and city public services director if this does not go as hoped then we'd be hearing about the risks of this plan and how replacement facilities need to be at least under construction before selling current facilities, and how hard it is to guarantee that BAP will do what city wants with the building.

It is the most basic of economics that if you want someone to utilize a building then the best plan is to sell it for the highest price. The buyer at the highest price has the greatest economic incentive to utilize the building to make money on the large investment. And the worst way to get a building fully utilized is to sell it at a highly subsidized price. The highly subsidized buyer has already made money by completing the purchase and now only needs to satisfy the contract terms. And thus, is primarily concerned with the contracted terms and not maximizing the building use.

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rhys jones 1 year, 6 months ago

In rereading this article -- and after talking with people who seem to know more than I do (not a difficult task) I am still confused whether the $6300 quoted is the amount of the raise, or total compensation. From the wording of the article one would assume it is the amount of the raise -- in which case my above comment stands as is. If it is total compensation, my bad, I'm not too big to admit when I am wrong. Either way some clarification would be appreciated.

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Scott Wedel 1 year, 6 months ago

Rhys,

The $6,300 is the total cost of the raises. So a raise of $900 each.

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rhys jones 1 year, 6 months ago

Thanks Scott. And heck, I'll sell this town down the river for half that.

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