Future of Iron Horse Inn back on Steamboat City Council’s agenda
December 31, 2014
Steamboat Springs — The Steamboat Springs City Council will kick off the new year talking about what the city should do with its old Iron Horse Inn when all of the Sheraton Steamboat Resort employees move out of the hotel in the spring.
City staff Tuesday will look to the council to weigh in on the future of the property that hosted an empty hotel building for two years before it was rented out to the Sheraton for $18,000 per month as workforce housing in a tight rental market.
The discussion comes as the property continues to receive interest from potential buyers.
The council now has the option to sell or repurpose the property because it recently moved the collateral on the city’s hefty Iron Horse debt from the hotel itself to the city’s public works, animal shelter and transit facilities.
“Now we go back to the council to ask, ‘What would you like to do?'” said Anne Small, the city’s director of general services.
Small said the Sheraton also has expressed some interest in possibly renting out the hotel again in the summer and next winter.
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Before it was completely rented out, multiple developers were pursuing the Iron Horse.
An Alaska-based developer in 2013 offered the city $915,000 to purchase the hotel so he could renovate it into a successful lodging property.
A few months before that offer, a Chicago-based developer said he was in the early stages of forming a proposal to raze the existing hotel buildings and replace them with an affordable housing project.
City Manager Deb Hinsvark said at the time, the city also got inquiries from about seven other people regarding the Iron Horse.
City staff did not seriously consider the development proposals, saying they first would need an endorsement from City Council to sell the property and then a public process to allow interested parties to bid on it.
The council also was hesitant to consider the proposals at the time.
"This is a bigger discussion that needs to be on a future agenda," council President Bart Kounovsky said in March 2013.
In her most recent City Council report, member Sonja Macys wrote that she talked to a man who was interested in purchasing the Iron Horse, and he asked if it was for sale.
“Is it?” Macys asked her fellow council members and city staff.
The city purchased the Iron Horse in 2007 thinking it would be an ideal property to use as affordable workforce housing.
To pay off the outstanding debt on the property, it is estimated the city will continue to pay from its general fund between $470,000 and $480,000 annually through 2032.
While the hotel operations were ceased because of the cost to run it, the monthly rentals offered at the other hotel building on the property continue to be popular.
The future of the Iron Horse is one of three big discussions the council is scheduled to have Tuesday.
The council also will hear an update on the city’s project to build a new police station and about sustainability efforts.