Key issues like ballot language, regional park and water rights remain for Brown Ranch annexation
Steamboat Springs City Council and the Yampa Valley Housing Authority are working to have a finalized agreement approved via resolution on Sept. 5.
After setting an aggressive timeline in January to pull a Brown Ranch annexation agreement together in a fraction of the time previous deals have taken to be struck, things are now getting down to the wire.
Steamboat Springs City Council will meet Tuesday for the first of two crucial meetings in the coming weeks. In these final two meetings, council and the Yampa Valley Housing Authority need to finalize an annexation agreement that can be referenced in a ballot measure allocating funding from the local short-term rental tax to construction of Brown Ranch.
While the agreement doesn’t have to be finalized to get this question on the ballot, council has indicated a desire to have an agreement approved by council resolution on Sept. 5, and referenced in the ballot question itself. Sept. 8 is the deadline to get a question on to the ballot, a process that requires two readings from council.
(Note: A resolution approving the agreement does not approve the annexation. That will need to be done by ordinance and will require a planning commission hearing as well. That process is in the works, with the current timeline putting an ordinance approving annexation before council toward the end of October, ahead of election day and the seating of a new council.)
Several issues still stand in the way of a finalized agreement though.
The housing authority has requested that the city refer a ballot question to voters that would commit future revenues from the local short-term rental tax passed last year, but the specifics of the actual ballot question are still in flux.
The two sides have agreed to ask voters to allocate 75% of annual STR tax revenues to the Brown Ranch, but that is where the agreement stops.
The city’s version of the question would put a cap on that funding of $10.5 million each year, with that figure growing at a rate of inflation. This means in years where the tax does better than projected, the housing authority wouldn’t see that extra windfall. The city’s question doesn’t include a floor for funding, so if the tax struggles to meet revenue projections, YVHA would see less money than anticipated.
The housing authority took issue with a cap, feeling that if they are taking the risk of a percentage of the tax rather than an identified level of funding, they should be able to capitalize on the good and the bad. This cap hadn’t been part of previous discussions and was first brought up last week when the city proposed ballot language.
“If we are going to take the downside risk, we’re certainly going to take the upside risk too,” said YVHA Board President Leah Wood. “We are aware that those tax dollars are going to vary each year so we’re willing to vary with you in the good years and the bad years, but to limit it so that then we just get the bad and there isn’t a way to make that up doesn’t make a lot of sense.”
Council member Joella West, who is representing the city in negotiations, said without a cap the funding allocated could end up being much higher than they anticipated. Council president Robin Crossan, who is also representing the city, said she was concerned a question without a cap could draw opposition from voters who feel more money is going to the project than has been previously said.
“Maybe we need to have full council weigh in on the $10.5 million, high, low, whatever it might be,” Crossan said.
The city’s question also includes specific unit trigger points that funding is reliant on, with funding potentially dropping below the 75% metric if those are not met. The metrics require 450 units to be constructed in the first six years and then 1,124 units in 10 years. Those benchmarks were first presented by the city last week.
This is not part of the housing authority’s version of the question at all. YVHA Executive Director Jason Peasley said they didn’t need these metrics in the actual ballot question. He pointed to when the housing authority got its mill levy passed, saying while they did commit to delivering 600 housing units in 10 years (a promise they are on pace to deliver), that was not part of the question itself.
The city’s concern is that there wouldn’t be a way out of providing this funding if the Brown Ranch project itself were to fail to deliver housing as expected. While the best option to provide affordable housing right now, Foote said this would give the city options if that were to change. These metrics are also discussed in Section 9 of the annexation agreement, which is about the commitment of STR taxes and is also still in flux.
The housing authority’s version of the question also would restrict council from reducing the rate of the STR tax below the current 9%, something the city did not include in their version.
The thought behind this is that even if voters approve allocations for Brown Ranch, that funding quickly dries up if council opts to lower the tax or effectively remove it by setting it to zero. City Attorney Dan Foote said he was not opposed to adding that language into the question and felt council may run into issues lowering the tax rate if the question was passed.
“We can’t reduce the rate in any way that would impair that payment, so I don’t think that language is necessary but I don’t have an objection to it, at least in the annexation agreement,” Foote said. “I certainly have no trouble putting that statement into the annexation agreement itself.”
(The housing authority expressed some disagreement with Foote’s interpretation, noting that the measure only commits the city to a percentage of funds and not any specific amount.)
The potential concern among council members though is that as they crafted the STR tax last year, they emphasized that the rate could be lowered in the future. This was meant to ease fears of people who thought 9% was too high and would negatively impact the local tourism economy.
Crossan indicated she could support adding the 9% to the question because it would make things clear with voters that this would lock the tax in place.
“Whatever way we go we have to truly spell it out, the facts to the community so they know,” Crossan said. “The whole point of taking this ballot to the voters now is because we’re here to craft it. So we need to do the best job we can to make these words work with the backup, with the facts so the community will feel positively about this.”
Caption: The area identified for a potential regional park at Brown Ranch could have impacts on wildlife. (Yampa Valley Housing Authority/Courtesy)
The Regional Park
Whether the city will be getting land for a new regional park in the Brown Ranch annexation deal remains to be seen and will be a key aspect of the remaining negotiations.
The city has demanded land for a 46-acre park throughout the annexation process, saying it is a requirement for new annexations laid out in the city’s broader Parks, Recreation, Open Space, Trails and River Master Plan. The housing authority had long resisted providing the land, but eventually pivoted to offer 46-acres on the north side of the property outside of the Urban Growth Boundary.
That offer came in exchange for the city’s commitment to bring a ballot question to voters that would commit 75% of STR revenues to the Brown Ranch.
But that plan has grown more uncertain. There are unanswered questions about putting a park there in general like how will it be accessed, when would the parcel be ready for park construction to start and how would a park estimated to cost roughly $70 million to build get funded. (Based on that Parks Plan, the city would pay for the full construction of larger-sized parks like community and regional parks.)
The city is also waiting for comments back from Colorado Parks and Wildlife about the impacts a developed park in that area could have on wildlife like elk, mule deer and sage grouse, among others. Council has received several public comments from local organizations like Keep Routt Wild and the Colorado Crane Conservation Coalition expressing concerns about the parks potential impacts on wildlife.
“We have asked CPW to please jump into this and CPW jumps pretty slowly, so we won’t know that answer to that until Aug. 31,” said council member Joella West at Friday’s annexation committee meeting. We are absolutely not comfortable moving forward on that without having answers to whether or not there really is a problem there.”
Complicating the matter further, the land for the park is not part of the Brown Ranch annexation, keeping it under county planning regulations. The Routt County Commissioners have signaled approval of such a park would not be guaranteed, as a developed regional park with sports fields isn’t the passive park space called for in the county’s master plan.
The housing authority has indicated that they are not willing to further adjust their parks proposal, which has seen them increase parkland from what was in the initial development plan.
If not in the proposed location, there seem to be few plausible alternatives for where a regional park at the Brown Ranch could go. Another option proposed by the housing authority was a more than 20-acre area closer to U.S. 40, but the terrain really isn’t suitable for sports fields. The city has pushed for it to be on the west side of the development near County Road 42, but the housing authority has argued a park in that spot would significantly reduce the amount of housing they could provide.
Overall park space may still be an issue as well, after it appeared that had been settled. The housing authority has worked with the local group trying to build an indoor sports barn near CR 42, but that land wouldn’t be transferred over to the city. While that would fulfill the need for a special use facility called for in the city’s parks plan, not counting that land as a park lowers the total acreage at Brown Ranch for parks by about 8 acres, dropping it below overall park metrics identified by the city.
“The parks issue is obviously one that is still, it’s been an issue, it continues to be an issue and will have to be resolved over the next couple council meetings or else this will, it won’t be moving forward this fall,” said third-party facilitator Jason Lacy at Friday’s meeting.
Caption: Initial results from a 1,600-page traffic study will be presented on Tuesday, which expects to better the understanding of what improvements are needed on U.S. Highway 40 and when. (Yampa Valley Housing Authority/Courtesy)
The housing authority has agreed to use a variety of funding sources (real estate transfer tax, metro district, its own mill levy) to pay the city to cover the budget shortfall when it comes to ongoing costs to provide services. This payment will amount to about $1,200 a year, per unit.
The capital funding part of the fiscal analysis still has some holes though. Part of the issue is a lack of specificity on some of the costs. For example, a water treatment plant along the Elk River is projected to cost between $40 and $58 million.
These capital costs are shared between the housing authority and city, with different improvements having a different share for each. With the water plant, YVHA has a much larger share of the cost allocated to it than the city, as it probably wouldn’t be needed without the development.
When it comes to U.S. Highway 40 improvements, it is the other way around. The road needs work down the line regardless of whether the Brown Ranch gets built, so in this case the city’s share is larger than YVHA’s.
But the exact breakdown is still somewhat fuzzy, as a traffic study conducted to refine those percentages has only recently been completed. City Public Works Director Jon Snyder noted that the study is 1,600 pages long, and it won’t be fully analyzed by Tuesday.
“We are going to do our absolute best to at least have something to present to council on Tuesday,” Snyder said. “What I’m hoping to find is specific levels of service for specific road segments and the thresholds that would require capacity improvements.”
Identifying the funding to pay for the city’s share of these upgrades is difficult as well. While YVHA could conceivably pay their share with STR revenues, the city’s share of the upgrades are not tied to Brown Ranch and therefore not eligible.
The Brown Ranch does not have any of its own water rights to bring to the city as part of annexation. The city has a policy that requires any rights be turned over to the city upon annexation, that a development acquire water rights or that they pay a fee in lieu of bringing water rights to the city.
The city has set that fee in lieu at $10.5 million, a number that was arrived at after consultation with the city’s water lawyers. This number has been called unreasonable by the housing authority, though there has been little robust discussion at the annexation committee level about this issue.
“I circled up with Jon (Snyder) and talked to him. It didn’t necessarily change our position,” Peasley said.
Top Photo Caption: A rendering of the Brown Ranch. (Yampa Valley Housing Authority/Courtesy)