Steamboat City Council divided on sale of downtown building
December 1, 2012
Nov. 24, 2012: City’s search for public safety campus continues to evolve
Steamboat Springs — Three weeks before they will decide whether to sell the city’s emergency services building on Yampa Street to a triumvirate of local outdoor retailers, Steamboat Springs City Council members appear divided over the transaction.
The council’s agenda for its Dec. 18 meeting includes the first reading of the sales contract between the city and BAP, Honey Stinger and Big Agnes for the property at 840 Yampa St. If approved on first reading, the contract then would appear for a second and final reading at the council’s next meeting, likely in January.
Like top city officials including Interim City Manager Deb Hinsvark, council member Scott Myller considers the sale of the building for $2.1 million to BAP, Honey Stinger and Big Agnes as positive economic development.
"I think a number of things came together at the same time, the first being we are interested in economic development and keeping major employers in town, and second, the police needing a new facility," Myller said Thursday.
In addition to starting the process of relocating the Steamboat Springs Police Department to a larger, more efficient workspace, Myller said the deal would help the three related and important local companies while providing the same "spark" for Yampa Street that the new promenade provided for businesses at the base of Mount Werner.
But council member Cari Hermacinski said to sell the building on Yampa Street for about $900,000 less than its appraised value would be a major mistake and could scar this council.
"I think this is our council’s Iron Horse," Hermacinski said, referring to a previous city council’s decision in 2007 to purchase the motel that will continue to cost the city about $480,000 per year until 2032.
Hermacinski said that at a time of economic uncertainty, it would be fiscally irresponsible for the city to sell its emergency services building and adjacent parking lots to then use an estimated $8 million to $10 million of its reserve funds to construct a new public safety campus somewhere else in Steamboat.
She said reserve funds should be saved for upcoming infrastructure needs, including untold millions of dollars’ worth of upgrades to the city’s stormwater infrastructure. Hinsvark has suggested the city consider funding those improvements by charging property owners a new fee.
The city’s search for a new public safety campus became more urgent in October when the City Council voted, 5-2, to let city officials negotiate the sale of the downtown emergency services building.
Hinsvark said Thursday that negotiations with the buyers were completed weeks ago.
Interviews with five of the seven council members last week revealed strong support and opposition to the proposed deal.
Council President Bart Kounovsky joined Myller in praising the proposal while council members Hermacinski and Walter Magill said they have serious reservations about it.
"I still have a hesitation on making a sale right now because we don’t know yet where we’re moving (the police and fire stations) to," Magill said. "We also have a (public safety) facility that works on Yampa, and I don’t think we’re holding back the Yampa Street redevelopment if we” don’t sell the building right now.
Council member Sonja Macys said she’s still evaluating the pluses and minuses of the deal.
An early critic of the city’s plan to sell the building below its appraised value, Macys categorized the relocation of the city’s emergency services as a "financial risk."
"I think we’re making a risky investment in the future of downtown," she said, adding that the city has "extended itself too far in terms of what it is willing to offer to keep a local business local."
But Macys said that as the project and sale negotiations progressed, she became more convinced it was worth the risk to provide a significant incentive to BAP, Big Agnes and Honey Stinger.
"I think the upside of it on the financial side is keeping this business local, providing a place where people can grow in their careers and keeping families here," Macys said. "The downtown businesses are more eager to see more people eating in their restaurants and shopping at their stores."
Council members Kevin Kaminski and Kenny Reisman, both of whom previously voted with Macys, Myller and Kounovsky to direct city officials to begin negotiating the specific terms of the sale, could not be reached Thursday.
Big Agnes owner Bill Gamber said in September he expects a minimum of 50 employees to work in the Yampa building, and the facility would allow his company to continue its growth in Steamboat.
“We’re busting at the seams with five locations right now, and we’re trying to get everyone under one roof,” Gamber said. “What a great location to put our crew. The city has a big plan for Yampa Street, and we feel like we fit in there nicely.”
In addition to finalizing the sales contract this week, officials still were vetting the latest options to build a public safety campus for its police department, which would have to vacate its Yampa Street headquarters by March 1 if the sale is approved.
Officials have said they temporarily will lease office space from TIC on the west side of the city until a new police headquarters is built, and firefighters will be allowed to stay in the Yampa Street building for 18 months after the March 1 closing date.
Clawback provisions added to the proposed contract will prevent the buyers from selling the building’s parking lot parcels without city approval for seven years.
During that time period, the buyers also must occupy at least half of the building.
Myller said sale negotiations with Gamber went smoothly, but an attempt by the city to raise the sale price was unsuccessful.
Myller said he and city officials specifically attempted to get an additional $500,000 from the buyers, but they didn’t budge after they reminded city officials they weren’t obligated to go through with the sale above the original suggested $2.1 million price.
Still, Myller said he would rather see the building sold to a local business at below market value than for it to be bought at full price and converted into luxury condominiums.
“BAP, Big Agnes and Honey Stinger are local upstarts, and I feel pretty good they’re going to stick it out here over the long term,” Myller said.
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com