Amen----It will be interesting to see how the City, County & YVHA handle this debt.....will the City & County step up and pay it off because of "perceived" liability?...they seem to be headed in that direction since it appears no attempt was made to get out of the obligation so far....at least 2 board members were definitely against defaulting at the last public meeting. They said that YVHA's reputation would suffer and they would never be able to borrow money again. The inability to borrow would be a good thing in my view for reasons that are now obvious.
I'm glad to hear you are following this up in that aspect. Sounds like the law is fairly clear.
With regard to the need of experts, I think when orgs such as this get into the development business it definitely needs that sort of expertise. The development side of the real estate business is the most profitable but also that with the greatest risk; no surprise there.There are plenty of experienced developers who are no longer around because of misjudgements of the depth and length of this last market. And, as in every boom, there are folks who were are in for the first time and are carried along. Most generally get culled when the downturn hits. It happens every time. This time the boom was the best and longest and the bust worse than I've ever seen.There were those who knew this couldn't last and got out because they had the experience to foresee it. Not all of them,of course, but my point is that you have practically no chance to pick your proper entrance and exit without having lived in that environment for a lengthy period of time and preferably have survived a bust. That's the great educator. Experience isn't the "end all" of the business but crucial for success.
The real problem would be to get the level of expertise necessary given the budget that is available to the YVHA. I think it would likely take their entire income from the City and County to achieve that and ,even then, that person would be looking over his/her shoulder for a development opportunity. I believe the developer that built the affordable housing south of town took that route; I'm sure he worked for the authority but I don't know in what capacity. Even the program of granting money for downpayments/2nd mortgages requires higher than normal capacity of knowledge in that field from its director. If the authority sticks to running properties like Fish Creek Trailer Park then you need only management experience which is less demanding and therefore less expensive and obviously less risky. Too bad the YVHA didn't have enough experience to know its limits.
I have not been a fan of deed restrictions for all and more of the reasons you mention. I'm unaware of YVHA's role in that.
A down payment/second mortgage program would yield market interest rates to offer a chance of ongoing cash flow. The risk is having to take over payments on a first mortgage and for that reason I'm skeptical of an organization like this watching their "downside". To be run properly it needs to be run by people versed in the business. Since the real estate market is so depressed I would think someone who is competent in this field could be found; at least until the next boom.
Overall I wonder if this approach of setting up an organization is truly workable in the long run. It needs attention from experts in the field every day all day and they are hard to find. I'm beginning to think tha SBS would be better off using simpler ways although I haven't thought about it long enough to have any concrete ideas. Tax policies ? Redevelopment areas for lost cost housing? I'd love to hear some ideas from all
When interviewing for the board position I was asked about how they could create cash flow. I said I thought the second mortgage scenario could work if properly done. Now I wonder.
I talked with Michael Schrantz yesterday at the Pilot and asked if they were looking at this story strictly from the firing of Mr. Krawzoff. He assured me that they were looking at this at the editorial board level and that would include the allegations made by Mr. Krawzoff. Their timing would be somewhat restricted due to legal considerations; he promised to keep me informed. They have asked the Authority board to "waive" the 90 day rule that evidently applies to the time limit for the Authority to maintain copies of meetings; exactly what limits to what type of meetings, I am not sure. He said that they would interview the auditor to whom Mr Krawzoff refers. Overall, I was pleased with the level of interest he expressed on behalf of the Pilot. We should all stay tuned; I would not like to see this get lost since they have leveraged a quasi-government entity into a money losing proposition that disproportionately effects those they were supposed to help. Think Fannie Mae and Freddie Mac. Not good. Note that approximately $120,000/yr of the $168,000/yr, in total, given to the Authority by the City and County is spent on interest on the loan which is currently at least $500,000 "underwater".
August 7, 2012
Dear Council President Kounovsky and the Steamboat Springs City Council,
Thank you for hearing my comments tonight. My name is George Krawzoff. Many of
you know me because I was your Transportation Services Director from 1996 until 2007.
Before that, I was with Snowmass Village for 13 years. I’ve served on the Pitkin County
Board of County Commissioners and founded the Basalt Children’s Recreation
Foundation. I have served as Chairperson of the Colorado Association of Transit
Agencies and was appointed to the Colorado Department of Transportation Commission
by Governor Ritter.
Last April 16th, I became the Executive Director of the Yampa Valley Housing Authority.
On July 12th, the YVHA convened an executive session to discuss my job performance. I
was not allowed to participate. Following that executive session, I was fired by YVHA
President Richard Lowe. I do not understand why. I have received nothing in writing
from the YVHA and the YVHA has made no public announcement regarding my firing.
The YVHA is formed by City and County IGA and relies on your combined
appropriation of $168,000 annually to operate. The YVHA also receives federal funds
and acts as an agent of the federal government. The YVHA has an obligation to operate
with transparency and accountability.
Please ask the YVHA Board to explain to you and to the citizens of the Yampa Valley
why it was necessary to fire me after three months employment at the YVHA. I spent
long hours doing everything I could to succeed. When I identified discrepancies in the
YVHA books, I received no thanks for my efforts. On the contrary, President Lowe and
Treasurer Catherine Carson seemed determined to hound and mistreat me. On Friday July
6th, Ms. Carson presented a spreadsheet to me and President Lowe accusing me of errors
in YVHA tenant accounts of over $20,000. This spreadsheet was false, my accounting
was correct, as auditor Chris Catterson confirmed on July 10th, but Mr. Lowe and Ms.
Carson remained determined to fire me on July 12th.
Please demand an explanation from President Lowe. Once you have the facts, please ask
President Lowe to apologize, to issue my pay since July 12 and to reinstate me as YVHA
Executive Director. I was doing a great job and will happily continue to do so. If I am not
allowed to, I will seek every remedy available in law and in public opinion.
Please direct your staff to discuss this situation with me and to help me find a remedy.
Thank you,
George Krawzoff
1200 Manitou Avenue
Steamboat Springs, CO 80487
970-870-6278, gkrawzoff@yahoo.com
I come down on the side of Scott's remarks regarding the YVHA being lucky in the best real estate market I've seen in my 40+ years in the development business. I made 5-6 attempts to get inside that group over the last 6-7 years, including trying to get on the board last year. My idea was to give them some access to my experiences since I've been thru 2 downturns, the inflationary bubble of the 70's and the S&L bust in the 80's. It doesn't take a genius to see that the last boom wouldn't last forever but experience can help predict closer to the bust than non-experience. So now they face a loss of maybe $1,500,000 if they pay off the loan and include the $700,000 in interest and a $22,000 principal payment, At the last public meeting I asked if the City & County were liable if they defaulted. Nancy Stahoviak said "No, but there could be 'perceived' liability". My impression from the meeting is that no one had talked to the lender; this loan was funded in 2006 !!! By the way it's due at the end of 2013. No way to get even in that time frame. They were talking at that meeting about trying to find a joint venture partner or a trade. How do you do that when you have a negative equity of perhaps $1,500,000 [including interest paid]? Obviously there was no one there who understood that aspect; or at best they were silent.
I have a copy of the statement that George read to the SBCC; it follows in part:
"Please ask the YVHA Board to explain to you and to the citizens of the Yampa Valley
why it was necessary to fire me after three months employment at the YVHA. I spent
long hours doing everything I could to succeed. When I identified discrepancies in the
YVHA books, I received no thanks for my efforts. On the contrary, President Lowe and
Treasurer Catherine Carson seemed determined to hound and mistreat me. On Friday July
6th, Ms. Carson presented a spreadsheet to me and President Lowe accusing me of errors
in YVHA tenant accounts of over $20,000. This spreadsheet was false, my accounting
was correct, as auditor Chris Catterson confirmed on July 10th, but Mr. Lowe and Ms.
Carson remained determined to fire me on July 12th."
This was provided by the Pilot. It does NOT appear in SBCC's minutes online; only a reference to his appearing and asking for his job back.
The long and short ? An authority like this does NOT belong in a complicated business of real estate development !!
I'll post George's letter in it's entirety if anyone wants it.
Bob Schneider 8 months ago on City eyes demolition of Iron Horse Inn to make way for new police station
City eyes demolition of Iron Horse Inn to make way for new police station
Please join the discussion in the commentary on the editorial page of the Pilot...9/23/12
Bob Schneider 8 months ago on Steamboat Springs City Council divided on Iron Horse demolition
Steamboat Springs City Council divided on Iron Horse demolition
Please join the discussion on the commentary on the editorial page in Sunday's paper..9/23/12
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
Amen----It will be interesting to see how the City, County & YVHA handle this debt.....will the City & County step up and pay it off because of "perceived" liability?...they seem to be headed in that direction since it appears no attempt was made to get out of the obligation so far....at least 2 board members were definitely against defaulting at the last public meeting. They said that YVHA's reputation would suffer and they would never be able to borrow money again. The inability to borrow would be a good thing in my view for reasons that are now obvious.
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
I'm glad to hear you are following this up in that aspect. Sounds like the law is fairly clear.
With regard to the need of experts, I think when orgs such as this get into the development business it definitely needs that sort of expertise. The development side of the real estate business is the most profitable but also that with the greatest risk; no surprise there.There are plenty of experienced developers who are no longer around because of misjudgements of the depth and length of this last market. And, as in every boom, there are folks who were are in for the first time and are carried along. Most generally get culled when the downturn hits. It happens every time. This time the boom was the best and longest and the bust worse than I've ever seen.There were those who knew this couldn't last and got out because they had the experience to foresee it. Not all of them,of course, but my point is that you have practically no chance to pick your proper entrance and exit without having lived in that environment for a lengthy period of time and preferably have survived a bust. That's the great educator. Experience isn't the "end all" of the business but crucial for success.
The real problem would be to get the level of expertise necessary given the budget that is available to the YVHA. I think it would likely take their entire income from the City and County to achieve that and ,even then, that person would be looking over his/her shoulder for a development opportunity. I believe the developer that built the affordable housing south of town took that route; I'm sure he worked for the authority but I don't know in what capacity. Even the program of granting money for downpayments/2nd mortgages requires higher than normal capacity of knowledge in that field from its director. If the authority sticks to running properties like Fish Creek Trailer Park then you need only management experience which is less demanding and therefore less expensive and obviously less risky. Too bad the YVHA didn't have enough experience to know its limits.
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
sorry about the typo "lost cost housing" instead of low cost
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
I have not been a fan of deed restrictions for all and more of the reasons you mention. I'm unaware of YVHA's role in that. A down payment/second mortgage program would yield market interest rates to offer a chance of ongoing cash flow. The risk is having to take over payments on a first mortgage and for that reason I'm skeptical of an organization like this watching their "downside". To be run properly it needs to be run by people versed in the business. Since the real estate market is so depressed I would think someone who is competent in this field could be found; at least until the next boom. Overall I wonder if this approach of setting up an organization is truly workable in the long run. It needs attention from experts in the field every day all day and they are hard to find. I'm beginning to think tha SBS would be better off using simpler ways although I haven't thought about it long enough to have any concrete ideas. Tax policies ? Redevelopment areas for lost cost housing? I'd love to hear some ideas from all
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
When interviewing for the board position I was asked about how they could create cash flow. I said I thought the second mortgage scenario could work if properly done. Now I wonder.
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
I talked with Michael Schrantz yesterday at the Pilot and asked if they were looking at this story strictly from the firing of Mr. Krawzoff. He assured me that they were looking at this at the editorial board level and that would include the allegations made by Mr. Krawzoff. Their timing would be somewhat restricted due to legal considerations; he promised to keep me informed. They have asked the Authority board to "waive" the 90 day rule that evidently applies to the time limit for the Authority to maintain copies of meetings; exactly what limits to what type of meetings, I am not sure. He said that they would interview the auditor to whom Mr Krawzoff refers. Overall, I was pleased with the level of interest he expressed on behalf of the Pilot. We should all stay tuned; I would not like to see this get lost since they have leveraged a quasi-government entity into a money losing proposition that disproportionately effects those they were supposed to help. Think Fannie Mae and Freddie Mac. Not good. Note that approximately $120,000/yr of the $168,000/yr, in total, given to the Authority by the City and County is spent on interest on the loan which is currently at least $500,000 "underwater".
Bob Schneider 8 months, 3 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
I tried this 2 days ago so here goes again
August 7, 2012 Dear Council President Kounovsky and the Steamboat Springs City Council, Thank you for hearing my comments tonight. My name is George Krawzoff. Many of you know me because I was your Transportation Services Director from 1996 until 2007. Before that, I was with Snowmass Village for 13 years. I’ve served on the Pitkin County Board of County Commissioners and founded the Basalt Children’s Recreation Foundation. I have served as Chairperson of the Colorado Association of Transit Agencies and was appointed to the Colorado Department of Transportation Commission by Governor Ritter. Last April 16th, I became the Executive Director of the Yampa Valley Housing Authority. On July 12th, the YVHA convened an executive session to discuss my job performance. I was not allowed to participate. Following that executive session, I was fired by YVHA President Richard Lowe. I do not understand why. I have received nothing in writing from the YVHA and the YVHA has made no public announcement regarding my firing. The YVHA is formed by City and County IGA and relies on your combined appropriation of $168,000 annually to operate. The YVHA also receives federal funds and acts as an agent of the federal government. The YVHA has an obligation to operate with transparency and accountability. Please ask the YVHA Board to explain to you and to the citizens of the Yampa Valley why it was necessary to fire me after three months employment at the YVHA. I spent long hours doing everything I could to succeed. When I identified discrepancies in the YVHA books, I received no thanks for my efforts. On the contrary, President Lowe and Treasurer Catherine Carson seemed determined to hound and mistreat me. On Friday July 6th, Ms. Carson presented a spreadsheet to me and President Lowe accusing me of errors in YVHA tenant accounts of over $20,000. This spreadsheet was false, my accounting was correct, as auditor Chris Catterson confirmed on July 10th, but Mr. Lowe and Ms. Carson remained determined to fire me on July 12th. Please demand an explanation from President Lowe. Once you have the facts, please ask President Lowe to apologize, to issue my pay since July 12 and to reinstate me as YVHA Executive Director. I was doing a great job and will happily continue to do so. If I am not allowed to, I will seek every remedy available in law and in public opinion. Please direct your staff to discuss this situation with me and to help me find a remedy. Thank you, George Krawzoff 1200 Manitou Avenue Steamboat Springs, CO 80487 970-870-6278, gkrawzoff@yahoo.com
Bob Schneider 8 months, 4 weeks ago on Former Yampa Valley Housing Authority executive director questions his firing
Former Yampa Valley Housing Authority executive director questions his firing
I come down on the side of Scott's remarks regarding the YVHA being lucky in the best real estate market I've seen in my 40+ years in the development business. I made 5-6 attempts to get inside that group over the last 6-7 years, including trying to get on the board last year. My idea was to give them some access to my experiences since I've been thru 2 downturns, the inflationary bubble of the 70's and the S&L bust in the 80's. It doesn't take a genius to see that the last boom wouldn't last forever but experience can help predict closer to the bust than non-experience. So now they face a loss of maybe $1,500,000 if they pay off the loan and include the $700,000 in interest and a $22,000 principal payment, At the last public meeting I asked if the City & County were liable if they defaulted. Nancy Stahoviak said "No, but there could be 'perceived' liability". My impression from the meeting is that no one had talked to the lender; this loan was funded in 2006 !!! By the way it's due at the end of 2013. No way to get even in that time frame. They were talking at that meeting about trying to find a joint venture partner or a trade. How do you do that when you have a negative equity of perhaps $1,500,000 [including interest paid]? Obviously there was no one there who understood that aspect; or at best they were silent. I have a copy of the statement that George read to the SBCC; it follows in part:
"Please ask the YVHA Board to explain to you and to the citizens of the Yampa Valley why it was necessary to fire me after three months employment at the YVHA. I spent long hours doing everything I could to succeed. When I identified discrepancies in the YVHA books, I received no thanks for my efforts. On the contrary, President Lowe and Treasurer Catherine Carson seemed determined to hound and mistreat me. On Friday July 6th, Ms. Carson presented a spreadsheet to me and President Lowe accusing me of errors in YVHA tenant accounts of over $20,000. This spreadsheet was false, my accounting was correct, as auditor Chris Catterson confirmed on July 10th, but Mr. Lowe and Ms. Carson remained determined to fire me on July 12th." This was provided by the Pilot. It does NOT appear in SBCC's minutes online; only a reference to his appearing and asking for his job back. The long and short ? An authority like this does NOT belong in a complicated business of real estate development !! I'll post George's letter in it's entirety if anyone wants it.