Steamboat City Council postpones resolution on Fish Creek Mobile Home Park debt


— Securing the funds to complete needed water and sewer upgrades at Fish Creek Mobile Home Park means the Yampa Valley Housing Authority must restructure the debt it took on during its 2007 purchase of the park.

In addition to a $2.58 million loan from Wells Fargo, YVHA also took on a $954,000 loan from the city of Steamboat Springs.

YVHA already has brought Alpine Bank to the table to cover the debt to Wells Fargo, but it also must get the city to sign off on a deal that would factor in a new, third agency: the Colorado Water Resources and Power Development Authority.

On Tuesday night, the City Council discussed the nature of the new deal and ended up postponing a resolution authorizing the agreement until the June 3 meeting, contingent on some clarifications.

The income level of the residents at Fish Creek Mobile Home Park qualifies it for a zero percent interest loan from the state agency to complete the water and sewer project. There also is the potential for some principal forgiveness when those determinations are made in a couple of months.

What the agency requires in return is a commitment of some of the rents from the park, which were committed entirely to Wells Fargo in the original deal. The city’s original mortgage on the park was second to Wells Fargo and had no committed lot rents.

“I can see the looks of skepticism like, ‘What a terrible business deal,’” City Attorney Tony Lettunich said to members of the City Council. “But this was never intended to be a good business deal. This was intended to be vehicle to permit the survival of the Fish Creek Mobile Home Park and to allow the housing authority to step in and coordinate its continued existence.”

YVHA now is asking the city to push the payment schedule out about 27 years and forgive most of the interest that would have accrued during the course of the original loan.

About $30,000 in interest that already has accrued would be added to the principal, which now stands at almost $791,000. The new loan would be capped at $1 million.

YVHA Board President Kathi Meyer said Wednesday that the organization looked at the overall structure of the park’s debts and income — taking into account the new zero percent interest loan — to ensure that it could afford to pay everyone.

Lettunich assured the City Council that the parties to the deal and consulted bond counsel were confident the proposed agreement complied with TABOR restrictions, as the park is an enterprise fund.

The new deal would keep the city’s mortgage on the park in second position behind the larger bank loan (Alpine Bank in this case) and would put it behind the state agency for lot rents, which again, it was never entitled to before.

“The water and power authority is not doing this with no security,” YVHA counsel Bob Weiss said. “At least with respect to the assignment of rents, (the city) is in a subordinate position to both entities as proposed. Otherwise, this new lender is not going to lend the money.”

“We are unsecured, but we were unsecured to begin with,” City Manager Deb Hinsvark said about the city’s position in the deal.

“We were looking at compounding interest that was going to make the loan impossible to ever repay,” she said. “Our goal was to get some funds back into the housing fund for future housing.”

The dollars that the city initially loaned for the purchase of the park are almost a sunk cost, City Council President Bart Kounovsky said.

“And we’re doing the best that we can to allow this to continue to operate and serve the needs of our citizens out there while still allowing us an opportunity to put those dollars back into that fund,” he said. “The work that’s been done here is some very good work to try to get the best out of a real tough situation.”

To reach Michael Schrantz, call 970-871-4206, email or follow him on Twitter @MLSchrantz


Scott Wedel 7 months ago

Don't you love the bait and switch.

In 2007 when the loan was made then it was claimed to be a good business deal as a loan earning interest that also does social good.

in 2014, after years of nonpayment and needing to allow another loan have higher priority then it is no longer a business deal and just social good.

But here's the rub, if they had asked to spend $1,000,000 in 2007 to do social good then there is no way it would have ever been approved. But in 2014, we are told the money is as good as spent and it should basically be written off.

I'd say let the utility improvement loan have a higher priority, but keep the compounding interest as an ongoing reminder of what is never to be collected. Also, 30 year projections can be widely different than expected so it is conceivable that it could ultimately be collected. As the unsecured lender there is no reason for the city to forgive compounded interest, but every reason to remember how much was given to YVHA.


rhys jones 7 months ago

So all of the rent goes to Wells-Fargo right now -- soon some of that will be siphoned off to a third party -- yet still that's okay with them --YVHA never intends to repay the City the million they borrowed... What's the best job in the world? YVHA's creative accountant.


Scott Wedel 7 months ago


Pretty standard loan condition and accounting. A loan promising rents is a simple way of being sure of being repaid It prevents the borrower from taking rental income to invest in something else and then hoping pay the debt from that other venture.

YVHA iclearly ntended to repay the City and it was presented as a good financial investment. YVHA did a brilliant job at buying at the top of the market and, like other panic buyers, projected escalating property values and rents. So, they projected they could repay the debt. Remember this was done at a similar time as City of SB purchased the Iron Horse with City claiming that was going to be a good financial investment. So the City was enjoying the Kool-Aid and was thinking this $1M to YVHA was a great financial move.

Though, buying at the market peak using leverage to finance the purchase makes for a really awful financial situation. And so Iron Horse and FCMHP are now financial problems. And YVHA's Elk River parcel being vacant land with no income is a complete disaster.


rhys jones 7 months ago

Either Wells-Fargo will be receiving a lower monthly payment than they currently do, with a new thumb in the pie -- and this article mentions no issue with that -- or they are not currently receiving the full rent income, and their payment will not change. Making one wonder where that money might be going... I'm sure, with all the tenants there, payment comes in many forms, and the opportunities for creative accounting are many... lots of zeroes being bounced around; who'd miss one or two... there's SOMETHING "fishy" going on here!!


Fred Duckels 7 months ago

On all three of these debacles we moved with stealth to outfox the greedy developers. Maybe the grand jury needs something to do.


Scott Wedel 7 months ago


No, only a portion of current rents are committed to Wells Fargo. So they can take out another loan that commits most of the rest of the rents to that loan. And the amount of rent committed is a fixed number so they can always raise rents to pay off the loans.

A really funky government housing loan program which YVHA has gladly joined is that for the duration the loan that the owner is limited to spending rental income on expenses and maintenance and with a small percentage for management fees. So YVHA cannot raise rents to cover Elk River expenses, but they can spend as much as they want at FCMHP and raise rents to cover that.

The obvious flaw with that government program and why that specific program has gone away is that long term investors use the subsidized loan to buy a property, set rents at the maximum allowed and use the income to then upgrade the property. So then when the restrictive subsidized loan is paid off then they have a beautiful property in perfect condition that can generate tons of income.


Fred Duckels 7 months ago

A lot of fluff here to make the absurd sound reasonable.


Fred Duckels 6 months, 4 weeks ago

After all this the YVHA was trying to buy Sleepy Bear but could not get it financed. I guess the only logical explanation is that it "feels good"..


mark hartless 6 months, 4 weeks ago

When I see entities like this spend money on more, more, more stuff it conjures an image in my mind of a guy with barefoot kids. His wife is pregnant with twins. Her car won't start. His grass is not mowed because the lawnmower is broke down. Kids haven't had a checkup or dentist visit in years. There's no electricity because their bill is unpaid.

Meanwhile, he's not getting busy fixing the problems he already has, obviously from being spread too thin. Instead, he's at the kitchen table with the building contractor looking at a set of blueprints talking about the addition he wants to put on his house.

If it was a private entity he would be considered irresponsible; since it's government we are supposed to consider them...???


Scott Wedel 6 months, 4 weeks ago


Except the tenants at FCMHP are generally responsible. The great majority of them don't notice the difference between it being owned by a government entity vs a private company. None of the financial problems at FCMHP are because of the tenants.

The problem with FCMHP is that a government entity decided it was so much smarter and better than the free market. That a mobile home park being owned by a government entity was better than being owned by a private investor because the sort of people that volunteer to serve on a government entity tend to believe in government. It took a high level of real estate market stupidity to not notice the local real estate market was more likely overvalued than undervalued in 2007. And yet YVHA bought vacant land and a mobile home park with failing infrastructure. In comparison, there are the real estate purchases by YVEA which since 2010 has bought several parcels at great prices. But then the YVEA board is dominated by competent manager types and not big government do-gooders.

The idea that FCMHP was about to be lost as affordable housing and developed into something else is farcical. A parcel on the floodplain between the railroad tracks, a river and a creek had no value except as a mobile home park.

If the YVHA board members said they were a property management organization and asked for investors then the private market would laugh in their faces. They went for years not even requiring tenants to pay rent at FCMHP.

The stereotypical person to blame and mock is a YVHA board member saying corporations are evil.


mark hartless 6 months, 3 weeks ago

I wasn't referring to the tennents. I was referring to the "big government do-gooders".

A lot of people made bad real estate decisions in 2007, including myself. The difference is that I paid for my mistakes personally and painfully while the "do-gooders" use OPM.

Using OPM makes entities numb to the pain of their mistakes and guarantees they will put their hand on the hot stove again if given the opportunity.

My point is that the adults should NOT give them that opportunity; they clearly are not up to running other peoples lives with other peoples money..


Scott Wedel 6 months, 3 weeks ago


It isn't just OPM that is the issue. YVEA is a coop of the region's electricity customers and has a board consisting of people in which none are major investors (because there are none). But the YVEA board mostly consists of business people that understand an electric utility is a business and they care about business topics such as revenues and losses.

In contrast, the YVHA board consists almost entirely of people that care about affordable housing. Almost none of them view themselves as running a business with millions of assets, debts, revenues and costs. Until last year when the stuff starting hitting the fan, they were years behind in having audited end of year financial statements and had no policy on what to do about FCMHP tenants that stopped paying rent. So they finally dealt with that sort of stuff, but then they signed a long term lease for the Elk River Parcel based upon a nearly $2M valuation for a property they say is worth less than $1M. And despite my questioning of that in their public meetings, they never answered why they were doing that because all those considerations had already been discussed and effectively decided in executive session. I still haven't figured out any business justification for signing that lease.

But they will share stupid ideas like putting solar panels on the hill that is too steep to develop as if a solar panel installer wants to deal with a steep hill.

Overall, if you had to have a business partner then you'd be happy with most of the YVEA board and you'd suggest most of the YVHA board take an intro to business class at CMC to learn about what is a business.

Thus, the real problem is the SB City Council and County Commissioners that put business ignorant people onto YVHA as if it was a volunteer do good organization with no financial responsibilities.


mark hartless 6 months, 3 weeks ago

That's my original point. No matter how many orginizations it gets split down into, the ultimate responsibility for this absurdity is City Council, and in fact the blame goes one step above them. Care to guess who that is??


Fred Duckels 6 months, 3 weeks ago

Scott, The AH craze both city and county started with the elected officials appointing boards that echoed their sentiments. This Kool Aid was widespread and included most everyone wishing to be viewed kindly by the com;munity. The Community Alliance was front and center as we were awash in OPM. Some business leaders were solidly on the bandwagon. The real skeptics were the payees of this racket perpetrated by upwardly mobile politicos. Aspiring political candidates all got an AH button as a rite of passage. Implementation of this debacle rivaled OCare in absurdity. Yes it was an ugly, foolish period and it is amazing that today we are either pointing fingers or have developed amnesia.


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