Turning the key to affordable apartments on Steamboat’s south side | SteamboatToday.com

Turning the key to affordable apartments on Steamboat’s south side

The proposed site of 72 new affordable apartments at U.S. Highway 40 and Pine Grove Road being pursued by the Yampa Valley Housing Authority and The Reserves developer Overland Property Group.

STEAMBOAT SPRINGS – If the Yampa Valley Housing Authority gets to build a second income-restricted, affordable apartment complex in the spring of 2019, it will offer some of the best pedestrian connections of any residential development in the city.

And the new 72-unit apartment complex would be on the opposite side of Steamboat Springs from the 48-unit The Reserves at Steamboat, which the Housing Authority completed in 2017.

The estimated development budget for the new project is $21 million.

"The site is something I'm very exited about – it being on the south side of town," Matt Gillam, vice president of development for Overland Property Group, told the Housing Authority on Thursday. "The walkability of the site is off the charts high."

Gillam said his company has mailed a check to the owner of the land to secure an "option to buy" the property.

The 3.6-acre site at the roundabout on the western extension of Pine Grove Road wraps around the west side of the Walgreens store, and Fish Creek flows on its northern boundary. 

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It's a block from the Yampa River Core Trail and a little longer walk to the Yampa River Botanic Park and Emerald Park with its baseball diamonds.

There are plans, as soon as next year, Gillam added, to run a new trail under U.S. Highway 40 in the oversized culvert that contains Fish Creek, providing direct access to the Safeway store and other businesses along the highway.

Federal tax credits are the key

But as it was with The Reserves, none of the apartments will be built unless the Colorado Housing Finance Authority awards federal income tax credits for the project in Steamboat. The credits can be sold to investors to provide a cash infusion to the public/private partnership between the Housing Authority and Overland.

In 2016, American Express bid $13 million to acquire the tax credits the Housing Authority was granted to help fund 48 affordable apartments at The Reserves.

Overland has also proposed broad terms for a development partnership with the Housing Authority, which call for Overland to assume all financial pre-development costs for consultant studies, application fees and architectural and engineering services to the tune of about $100,000 in advance.

In turn, the Housing Authority, now funded with a voter-approved property tax, would be called on to make a $525,000 cash contribution to the construction of the building for 40 percent ownership, 40 percent of cash flow from the apartments, 16.8 percent of the development fee and an estimated $35,000 annually in management fees. Those cash streams are estimated to repay the $525,000 investment within four years.

The partnership would not be formalized until the development partners are closer to breaking ground.

In November 2017, voters in the Housing Authority's district,  including Steamboat and nearby rural suburbs, approved a 10-year, one-mill property tax anticipated to generate $900,000 annually.

The Housing Authority had previously announced its intention to build a 96-unit apartment building in 2019. But the goal of building on the south side of the city comes at a price, Gillam confirmed.

As a result, the number of apartments in the new project was trimmed by 24 to 72.

"The south side of town is expensive," Gillam observed, and he added the chosen site was the only one they could make work.

Housing Authority Executive Director Jason Peasley said he expects to learn the fate of Steamboat's application for the tax credits sometime in September.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1.

Apartments devoted to mixed households:

Eligibility for leasing the proposed new affordable, income-restricted apartments on Pine Grove Road would be based on household income relative to the area median.

The numbers targeting different incomes vary. And for the first time, incomes as high as 120 percent of median would be considered for a finite number of units.

The 72 apartments will comprise 12 one-bedroom units, 36 two-bedroom units and 24 three-bedroom units.