As rental market tightens, Steamboat’s defunct hotels become affordable workforce housing
January 23, 2015
Steamboat Springs — The rental market is so tight in Steamboat Springs that two of the city’s biggest lodging operations are taking charge of their workforce housing needs by leasing old empty hotels.
In a similar arrangement, local property management company Resort Group secured housing by leasing the empty Alpiner Lodge on Lincoln Avenue.
Before the Alpiner became available to rent out, Resort Group was looking as far away as Hayden and Craig for places to house its seasonal employees.
Resort Group President Mark Walker called the local housing situation a crisis, and he was thankful an empty hotel was available this season.
“Thank goodness the Alpiner wasn’t occupied, and we were able to get it,” Walker said. “We were scrambling this fall to try and determine where we were going to put some of our seasonal workforce. The Alpiner has worked out very well for some of our seasonal employees.”
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Seasonal employees who take care of things like housekeeping and snow removal at the properties Resort Group manages now are living in the hotel that is across the street from a grocery store and near the bus lines in the heart of downtown.
Alpiner owners Jon Wade and Chris Paoli closed the 33-room motel in 2013 because they wanted to re-evaluate their options for the property after Paoli said the hotel “just wasn’t working.”
Walker said his company’s employees now are occupying more than half of the motel under a rental agreement that runs through April 15.
Like the Sheraton, Resort Group was forced to scramble to look for guaranteed employee housing this season after Steamboat Ski Area needed more units for its own employees at The Ponds at Steamboat condominiums.
Resort Group and Sheraton used to have employee housing at the complex, but the ski area’s demand meant that less units would be available this year.
“We are in a crisis as far as employee housing, not just for foreign workers but for anyone in this valley,” Walker said. “We’ve heard from quality people who would love to take the job with us, but they don’t because they can’t find a place to rent.”
City investigating possible code violation
Alpiner owner Paoli was hesitant Friday to discuss any details of how his property now was being used in Steamboat.
The manner in which the owners of the Alpiner have been renting out the motel has attracted the attention of the city’s Planning Department, which suspects the owners currently are violating the city’s code by offering the long-term rentals in what used to be a motel.
“We think that what is going on there, they don’t have the latest approval to do that,” City Planner Rebecca Bessey said. “We have cited them with an enforcement action to understand what it is they are doing. We’re waiting for some additional information to determine what the use (at the motel) is and to see if they can come into compliance. If there is a way to get them into compliance, we’ll work with them on that.”
Paoli said he was working with the Planning Department to address the compliance issues.
To accommodate long-term rentals at the Iron Horse Inn this winter, the city had to get approval from the Planning Commission and the Steamboat Springs City Council to change the property use from a hotel to a dormitory.
Bessey said the same process couldn’t be used at the Alpiner because the motel is in the commercial Old Town zone where dormitories are not allowed.
Paoli said rooms at the Alpiner initially were being offered on Craigslist for $200 per week, and it made more financial sense to do long-term rentals than revert back to nightly rentals.
Asked how the motel was being used today, he said rooms were being rented out on a weekly basis, and “some people were staying longer than a week.”
He did not mention the rental agreement with Resort Group.
Sheraton General Manager Dan Pirrallo mentioned Resort Group’s lease with the Alpiner on Tuesday while he asked the City Council to help address the issue of affordable housing.
“We are going to need help with this,” Pirrallo said about the housing situation. “It’s going to be a problem as soon as this summer for the hospitality industry. That is why we have leased the Iron Horse during the winter season and why Mountain Resorts is using the Alpiner. It’s going to be a very large problem come next winter in 2015-2016 season. We need to look at a short-term fix, that may mean transportation to other local communities so we can provide housing for the associates coming in, and there may be a long-term fix.”
He said the long-term fix could include incentives to build affordable housing.