City of Steamboat will entertain redevelopment and purchase proposals for Iron Horse Inn
January 8, 2015
Steamboat Springs — Developers and other community members interested in purchasing or redeveloping the city’s Iron Horse Inn soon will be able to submit their proposals to the city.
The Steamboat Springs City Council on Tuesday night voted unanimously to seek proposals for the possible purchase or redevelopment of the hotel.
The council also wants to hear from potential partners who may be interested in managing the property.
City staff will bring back a draft of a request for proposals, or RFP, to put out to the community by the end of February.
After the RFP is approved by the council, the city then will accept the proposals.
The city now has many more options to sell or repurpose the Iron Horse because the council recently agreed to move the collateral from the debt of the Iron Horse off of the hotel itself and onto other city facilities.
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In recent years, several developers have approached the city about buying and redeveloping the property.
With the Sheraton Steamboat Resort’s lease of part of the property set to expire in the spring, the city turned to the council to ask what the city should do with the property.
“It’s an easier conversation to have once there are some real possibilities out there,” council member Kenny Reisman said.
Council members showed they have differing views on what the hotel should be in the future.
Sonja Macys said she was attached to the idea of having the building serve as affordable housing.
“I do think what’s happened is the needs and purposes for which we’ve acquired (the hotel) are very real,” Macys said referring to the city’s decision to purchase the property in 2007 for affordable housing. “The needs are real, and they’re back.”
At a time the local rental market is getting tighter, Macys raised the possibility of the hotel again serving as workforce housing for city employees like bus drivers.
The city did just that in 2006 and 2007 and rented out housing for drivers at a cost of $40,500.
Driver recruiting challenges this year led the city to cut back bus service.
“If we can solve our own problems as a city and an employer first, wouldn’t that be nifty?” she said.
Tony Connell said there was no silver bullet for the future of the Iron Horse, but there “may be a development opportunity from someone strong, that’s not risk-based, and that makes sense and would be the best possibility.”
He added he “wasn’t married to the idea” of having the property serve as affordable housing.
Council member Scott Myller said perhaps it was time to give management of the property over to an entity like the Yampa Valley Housing Authority.
Council President Bart Kounovsky wanted to “get some ideas rolling from the community.”
“I don’t want to constrain it to only affordable housing,” he said.
Scott Ford said the conversation about the future of the Iron Horse would be made easier if it was decided first whether the city should be in the affordable housing business.
Ford himself said offering affordable housing wasn’t a core function of a city government and isn’t a business the city should be in.
The city purchased the hotel in 2007 thinking it would be a prime property for workforce housing.
Today, one of the hotel buildings is being rented out to the Sheraton for just that purpose while the other building is full with apartment tenants who have month-to-month leases.
Regardless of what the city decides to do with the Iron Horse, it will pay $480,000 per year until 2032 to pay off the debt on the property.
The city also could pay $5 million in 2018 to pay off the debt in full.