Former Steamboat city manager cautions city council about annexation proposal
July 17, 2017
There were more questions and concerns than harmony and agreement at the 14th meeting between the Steamboat Springs City Council and real estate developers who want to get 444 new homes built and annexed into west Steamboat.
Last week, several of the city's elected officials continued to express concern about how affordable the homes would be.
Councilwoman Kathi Meyer pressed the developers on why the latest drafts of their housing proposal appear to put some rental units, which might be built for lower-income residents, on the backburner.
And some residents and former city officials questioned how the city could even afford an annexation without a property tax to pay for the additional city services the homes would require.
Former city manager Paul Hughes said the city, which doesn't collect a property tax, can't currently afford to annex even one more home into the city limits.
"If the city annexes a project such as Brynn Grey without having a way to help pay the ongoing costs of service, it will be making a truly dangerous financial decision — one that will have far-reaching and unfortunate consequences," Hughes said.
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Hughes urged the council to consider asking voters to pass a property tax to help pay for future growth.
Hughes’ comments came after elected officials raised separate concerns about how affordable the homes in the new neighborhoods would be.
Brynn Grey is proposing a mix of housing units with different price points.
It was the stock of units that might be built for low-income residents that dominated much of the discussion.
Meyer said she heard the developers were considering a restriction that would prevent any low-income units from being built in the Brynn Grey neighborhoods until half of the 444-unit housing development was completed.
CEO David O'Neil said the property owner who is planning to sell the land to Brynn Grey for the development is concerned that, if low-income rental units are built first or too early, the project might be branded a low-income project and hurt home sales in the area in the future.
“We have to be sensitive to that,” O’Neil said.
But the prospect of lower-income units taking several years to come to fruition didn't sit well with Meyer.
"That's what works for you, but it might not work for us and the community," Meyer told the developers.
A majority of the council appears to want to impose deed restrictions on some of the other housing units, which would prevent their value from appreciating beyond a certain rate.
Many of the units would also have to be occupied by residents who work in Routt County full time.
Councilwoman Heather Sloop said, without some form of deed restrictions, the new homes would likely grow out of reach for many Steamboat residents.
She feared the neighborhood would turn into homes valued at $800,000 and not help residents who are currently struggling to find homes they can afford.
Councilman Scott Ford took a different stance than some of his fellow council members, saying he struggled with the idea of distorting the market with deed restrictions.
Following the meeting, he said he was "cautiously" optimistic the council and Brynn Grey would be able to work through differences they might have.
"Up until recently, we have been in the casual dating phase of a relationship," he said. "We are now moving in to the serious side of the relationship. … The challenge is to keep the eye on the ball as to what their particular product is."
The developers will return to the council Tuesday with some revisions to their proposal.
The council and the developers are expected to talk more about how much Brynn Grey should contribute toward traffic-related improvements.
In a letter to the council, the company also notes it is setting aside a parcel adjoining U.S. Highway 40 for a potential grocery store.
"In the event that demand increases to support such a use, there would exist potential for significant retail sales tax revenue," they wrote.
In response to concerns about the city's cost of an annexation, Brynn Grey also claimed the budget impacts would be gradual, because the neighborhoods would take many years to build.
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