Iron Horse Inn tenants hope demolition proposal doesn’t become reality
September 26, 2012
Sept. 18, 2012: Steamboat Springs City Council divided on Iron Horse demolition
Steamboat Springs — Christopher Nelson and his girlfriend were just getting their bearings in Steamboat Springs this month when they learned their home could soon be demolished to make way for a police station.
The couple’s worries began immediately.
"I got online right away and started looking for other affordable places to live as far away as Hayden," Nelson said Wednesday outside the efficiency unit he rents at the Iron Horse Inn for $625 a month. "We had enough stress with our budget and the move here from Wisconsin. Now we’re stressed out because we may have to find another place to live."
City officials are pursuing a plan to demolish the 52-room motel and replace it with a 15,000-square-foot police station.
In recent weeks, the officials, along with some members of the Steamboat Springs City Council, have called the Iron Horse an albatross, a ticking time bomb and an underperforming financial liability.
But the aging motel is something different to Nelson and its other long-term tenants.
It’s not perfect. But it’s efficient. It’s comfortable. It’s "Melrose Place."
And they don’t want the city to raze it and replace with a new police station.
"Our move here would not have worked out without the Iron Horse," Nelson said. "This place isn’t paradise, but I don’t care. It gives people an affordable place to start."
Finding a bargain
The month-to-month lease at the Iron Horse covers cable, internet and all utilities. It was an enticing offer for Nelson, who said the low price tag ultimately lured him to move here three months ago from Lake Geneva, Wisc.
Nelson, a manager at Walgreens, inhabits one of the 26 rooms that offer long-term leases. The remaining 26 rooms are part of a newer, separate building and are rented out on a nightly basis.
Anne Small, the city’s director of general services, said the building that offers long-term rentals is fully booked and usually maintains its 100 percent occupancy.
She said since the end of May, the building that functions as a hotel has posted an average occupancy rate of 38 percent.
“Summer is actually a good season for the Iron Horse because it’s affordable nightly rentals at a good price,” Small said. “It’s clean and it’s near town and it’s right there on the river.”
But no one is calling the motel high-end.
The front doors of the efficiency units open up to a bathroom, and the living room and bedrooms are a combined space.
Traffic rolling along U.S. Highway 40 can be heard night and day.
Small said Wednesday the motel, which the city purchased in 2007 for $5 million, isn’t making any money and is expected to cost hundreds of thousands of dollars to maintain in the coming years with a roof replacement project and major upkeep to the parking lot.
She said last year the hotel generated $341,368 in revenue, but it cost the city $380,000 to operate and maintain. Small said the city also spends $58,000 annually in overhead costs to do the accounting and other services for the hotel.
And whether the Iron Horse stands or falls, the city will pay an average of $480,000 a year until 2032 to erase their debt on the property.
The plan to demolish the hotel was met with mixed reviews by members of the City Council earlier this month.
Despite the cold reception from four members of the council, the city is continuing to pursue the plan and will pitch a more detailed version of their proposal Oct. 16.
In the meantime, many Iron Horse tenants are questioning the city’s intentions and wondering what they’ll do if their home is brought down.
"It would take something away that people need," Iron Horse resident Jan Heath said. "I’m not the concern. I can afford to live somewhere else. But there are families and people here who would be hard pressed to find another affordable option. If the city wants to take this place down, they should find a way to help these people find another place to live."
Rental market strong
The proposal to demolish the Iron Horse comes at a time the head of a major property management company is reporting the rental market is strong in Steamboat.
But Central Park Management owner Curt Weiss said with or without the Iron Horse, more affordable housing will be needed in the future.
"We have 130-plus long-term rental units, and we currently have one available," Weiss said. "I think there’s still a need at the low end for affordable housing. In this economy, people are getting less hours. They’re getting sent home from the restaurant early, and the resort community has a lot of people out there that need a minimal amount of cost on housing."
The property manager at The Ponds, which serves partly as work force housing for the Steamboat Ski and Resort Corp., reported the property is expecting to have a waitlist this winter.
Weiss said it will be difficult to add more affordable units and meet demand in the future.
"What I see is it’s going to have to be subsidized or some sort of working relationship will have to be established where you can pay some of the up-front costs over a period of time," he said about the challenges of building affordable rental units in Steamboat.
At the Iron Horse, tenants are accepted on a first-come, first-served basis, and current residents are concerned they won’t find another affordable alternative so close to town.
Unlike at more traditional affordable housing complexes, Iron Horse applicants are not rejected if their income is above a certain threshold.
"Anybody can live here," Iron Horse manager Jayson Belyea said. "It’s a complete cross-section of our community, from single people to small families."
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com