Our View: SmartWool lease a proud city moment
July 23, 2011
July 14, 2011: SmartWool, Steamboat reach 10-year lease agreement
Steamboat Springs — Steamboat Springs' recently negotiated lease extension with SmartWool is the most significant example to date of how the city can, and should, play a lead role in economic development without getting in the way of private enterprise.
The 10-year deal will keep one of Steamboat's most important local businesses in Routt County for the foreseeable future while also improving and expanding the Steamboat Springs Airport terminal that serves as SmartWool's global headquarters. The lease also will lead to the construction of a new facility for the airport's fixed-base operator.
Importantly, the deal was crafted in a way that doesn't jeopardize taxpayer money. In fact, it might even make a return on investment beyond what the city and community receive from having an international brand like SmartWool call Steamboat home.
The lease, which received initial approval from the City Council last week, stipulates that SmartWool pay about $600,000 to expand the existing terminal building by 8,000 square feet and pay another $350,000 to relocate the airport's fixed-base operator, which oversees the general aviation functions of Bob Adams Field.
The city, however, will front the approximately $946,000 owed by SmartWool. SmartWool will pay the city back at 3.5 percent interest over the life of the 10-year lease deal. The money will come from the city's $12.5 million in unrestricted reserves. The city currently earns only 1 percent on its reserves fund.
Deputy City Manager Wendy DuBord said the increased rent payment from SmartWool might even allow the airport to break even instead of the city having to supplement it annually from the general fund.
It's also important to take a step back from the details of the lease and recognize the significance of the agreement for the community as a whole. SmartWool employs 65 people locally and provides a shining example of the kind of lifestyle company that fits perfectly within Steamboat's outdoors-oriented culture. As the city, Chamber and other groups ramp up their focus on marketing Steamboat and Routt County as an ideal place for location-neutral and outdoors-oriented businesses to settle, SmartWool becomes a logical poster company.
Plus, as SmartWool President Mark Satkiewicz said during a news conference, he plans to continue to grow his company locally.
"SmartWool is growing and looking to add talent to our organization in the near and long term," Satkiewicz said. "And as we drive brand awareness and connect more consumers to our incredible products, we'll need more people and do more business out of this location."
Give the city credit for negotiating an agreement that benefits everyone involved — the city, SmartWool and residents. May there be more like it in the future.