City of Steamboat acquires Barn Village lot through foreclosure
February 28, 2014
Steamboat Springs — The city of Steamboat Springs has claimed a lot in Barn Village at Steamboat that the original developer of the subdivision put up as collateral for its community housing requirement.
As part of the city's search for a suitable site for a new police station, the lot is being considered in a swap with Yampa Valley Medical Center that would allow the city to build at the corner of Pine Grove Road and Central Park Drive.
The city has a list of about 20 potential sites for a new police station.
Barn Village at Steamboat went through the city's planning process at a time when inclusionary zoning still was part of the community housing requirements.
According to documents filed with the Routt County Clerk and Recorder's office, the city allowed the developer, Mountain Property Development Inc., to pay a fee in lieu of $505,521.50 to satisfy the community housing requirement.
The developer did not pay the money up front and used 0.8-acre Lot 63A as collateral in a November 2009 deed of trust with the city.
City of Steamboat Springs attorney Tony Lettunich said Thursday that the city made sure at the time that it had senior rights to the land.
In the deed, Mountain Property Development was supposed to pay off the fee-in-lieu in three yearly payments with the balance being due in August 2012. The deed later was amended to make the balance due in August 2013.
The debt was not paid, and the property was foreclosed on. The city presented the note at auction, and a confirmation deed for the property was issued to the city Wednesday.
Lot 63A is split into two tax accounts and there are liens on each. While the city did not have to pay any money for the deed to the property, it will have to pay the back taxes on the lot to clear it, which are a little more than $10,000.
The lot was appraised at $500,000 in August 2009, but a December 2013 appraisal puts the current value at $230,000.
Mountain Property Development continued to borrow money through 2010 before eventually declaring bankruptcy in 2012.
Gibraltar, the distressed real estate investment arm of home-builder Toll Brothers, purchased the remaining Barn Village at Steamboat lots and brought them back on the market in 2013.
Because Lot 63A was collateral for a community housing fee, Steamboat Springs City Manager Deb Hinsvark said Thursday, Steamboat Springs City Council will have to take that into consideration when evaluating any future plans for the property.