Steamboat Resort, City council considers $50M deal to build new transit center, gondola next week
Public Improvements Agreement is part of the resort's metro district funding proposal and includes a provision that pays $13 million of the city's contribution for a new transit center back over the next two decades.
A deal Steamboat Springs City Council will consider on Tuesday with Steamboat Ski & Resort Corp. would see the city initially pay $20 million to reconstruct Gondola Transit Center while the resort uses $30 million to construct a new gondola and overhaul the Meadows Parking Lot.
That $20 million will come from funding from the Mountain Urban Renewal Authority, but part of that — $13 million in 2023 dollars — would eventually return to the city as the deal includes a promissory note. These payments would likely start in 2030, be completed by 2042 and would grow with inflation, but otherwise wouldn’t have an interest rate.
The deal, referred to as a Public Improvements Agreement, is part of a plan from the resort to set up several metro districts and collect property taxes on resort-owned property around the base area to help fund these upgrades. Resort leaders say this is the logical next step after more than $200 million has been invested into on-mountain facilities through the resort’s Full Steam Ahead projects.
“The dominoes are falling in the correct order. Full Steam Ahead, the Wild Blue Gondola, that is going to create a lot of ability for us to spread people around the mountain and capacity means we’re going to have more people,” said Loryn Duke, Director of Communications with the resort. “Now we need to make sure that our transportation mechanisms or our transportation, in general, can handle the capacity changes.”
The 72-page Public Improvements Agreement, or PIA, will be considered by city council at its meeting on Tuesday and is being reviewed in coordination with the metro district proposal, which is on a tight timeline to make it onto the November ballot. Council will consider first readings for creating the district Tuesday, with the second reading coming on Sept. 5, three days before the deadline to get language to a ballot.
(Due to a packed agenda that is projected to last at least seven hours, Tuesday’s Council meeting is set to start at 3:30 p.m., earlier than the usual 5 p.m. start.)
If the PIA is approved as currently laid out and the metro district proposal is referred to the ballot, almost no voters would see the question in November though. That is because the question is only considered by owners within the boundaries of the proposed district, which currently is just Steamboat Ski & Resort Corp.
The timing is important though, Duke explained, because the resort intends to sell several of these properties to third-party developers, who would be subject to the additional taxes if it is approved. If these sales were to happen before metro districts are put in place, those developers would be part of those voting on whether to put the district in place and may not vote to tax themselves.
(Businesses that are not currently owned by the resort, but that are located in the metro districts will not be subject to the additional property taxes. This means resort owned businesses in the base area like the new Range Food Hall would pay into the metro district while businesses owned by others like Christy Sports would not)
“If we can get the metro districts established before sales start happening and building starts happening, we’re taking advantage of the most opportune time to capitalize on (the resort’s) contribution and future developers’ contributions,” Duke said. “Only people in the district tax themselves, only people in the district vote on it.”
City staff recommends that council approve both the PIA and the metro district proposal in documents prepared for next week’s meeting.
Caption: A rendering of a redesigned Gondola Transit Center shows how pedestrian movements are being prioritized over vehicular traffic. (Steamboat Ski & Resort Corp./Courtesy)
A $50 million project
The whole project, including what is in both sides’ scope of work, is estimated to cost about $50 million. The city’s $20 million will go toward renovations of the Gondola Transit Center and round-a-bouts at Mount Werner Road and Mount Werner Circle.
The resort will use $30 million — money that will be generated by the metro districts — to support the addition of a new high-speed, eight- to 10-person gondola that could move between 2,800 and 3,600 people per hour. This would be free to use and would be open to the public daily in the summer and winter seasons, and in shoulder seasons depending on demand.
That $30 million will also go toward an overhaul of the Meadows Parking Lot, which would become a new location for skier drop-off, as cars will likely not be allowed to enter the new Gondola Transit Center.
The scale of the project now being considered is much larger than previous iterations. In 2016, a redesigned Gondola Transit Center was projected to cost about $14.4 million, though that did not include a gondola. The city’s contribution (funded by the URA) at that time was $10.5 million.
A 2022 proposal from the resort that also did not include a gondola would have cost about $10 million, with just $2.5 million coming from the city (URA). With the addition of a gondola, the project is much more expensive. Still, Duke said this would go a long way to relieve congestion at the base area, similar to what Breckenridge has done to get people onto the mountain.
“The Wild Horse Gondola is a band-aid,” Duke said. “We’ve always known that we need to fully flesh out the real concept and now is the time for us to do that.”
Caption: A rendering of a redesigned Gondola Transit Center shows how public transit is prioritized in the base area, with public skier drop-off being moved to the Meadows Parking Lot. (Steamboat Ski & Resort Corp./Courtesy)
The promissory note
The initial contribution from the city (or URA) is much higher than previous proposals, but the PIA includes a promissory note that would return $13 million to the city over the next two decades.
The promissory note is tied to what is referred to in the PIA as “Lost SSRA Opportunity Cost,” with the acronym there referring to the Steamboat Springs Redevelopment Authority. (The redevelopment authority makes decisions with URA spending, but SSRA’s governing board is city council. To put it simply, SSRA is city council.)
This lost opportunity cost references projects that are included within the scope of the URA’s work that will need to be delayed or forgone because of increased spending from the city’s side on a new Gondola Transit Center.
“In order to ensure that (the city) recovers its Lost SSRA Opportunity Cost, (the resort) shall use its best efforts to cause the districts to issue a promissory note to the city,” the PIA reads.
In total, the resort will pay back $13 million in 2023 dollars that will be adjusted for inflation over time. This promissory note does not have any other interest added though, rather it will grow based on the Denver-Boulder consumer price index. This $13 million has grown in recent weeks, as when council was given an update in July it was only $10 million.
Duke noted that because of this, the city’s contribution in the long run is essentially $7 million, all of which will come from the URA and not the city’s general fund. When considering that the resort is one of the largest taxpayers in the URA and will contribute about a million to it in the coming years, Duke said only about $6 million of the total $50 million would come from someone other than the resort.
(That $1 million would have still gone to other taxing entities if it did not go to the URA though, so the resort would pay that $1 million regardless. In this situation, the resort has more say in how those tax dollars are being spent.) “In a community like ours where we’re pretty sales tax heavy and sales tax impacts the locals as much as visitors sometimes, the funding mechanisms that we’re proposing for the GTC and the gondola really do not impact the local community,” Duke said.
Where is resort money for housing?
Duke acknowledged that the resort’s efforts with Full Steam Ahead will increase the number of people coming to the resort, which is why improving the transportation to get them there is so important. This growth will also likely facilitate the need for more employees.
The more than $200 million in Full Steam Ahead projects — funded by the resort’s parent company Alterra Mountain Company — did not include new employee housing, and neither do the projects proposed here.
Duke said addressing housing shortages locally is certainly an issue the resort needs to play a role in, but this project is really about addressing transportation deficiencies.
“We can certainly aid in finding solutions. Child care was first for us, now transportation and yes workforce housing in our community is absolutely an issue that we need to play our role,” Duke said, referencing the child care facility the resort opened last year. “It’s why we support Brown Ranch, (and) it’s why we support transportation as a short-term solution to workforce housing.”
Duke noted that the resort is very supportive of a Regional Transportation Authority and regional passenger rail that could improve transit into Steamboat from other population centers in the Yampa Valley where housing is more affordable.
Steamboat Resort also has about 600 beds for its workforce, Duke said, which is more than many of Alterra’s resorts. Investing more in workforce housing is a potential solution, but not the one being pursued with this project, Duke said.
“Alterra is committed to workforce housing to resorts in our family,” Duke said. “We are not as dire as some other locations, but that’s not to say that we’re not still in a dire situation and housing needs to be addressed. It’s part of our constant conversation, but right now the next domino is transportation.”
Other points in the PIA
The draft agreement outlines that 1% of the city’s spending and 0.5% of the resort’s spending will be devoted to acquiring and installing public art as part of the project. This equates to about $350,000.
The two sides agree that they will collaborate on a study to assess the feasibility of a community-scale geothermal system as part of the Gondola Transit Center overhaul. This system would likely be used to power snowmelt systems at the base area.
If the resort fails to uphold its end of the PIA, the city has an out of the deal. If the project as planned falls apart, the city could revert to a stripped-down, gondola-less Gondola Transit Center concept. In this situation, the resort would pay 50% of the costs of a revamped GTC.
The gondola from meadows to the base area would be free for public use in perpetuity and hours of operation will be agreed upon by the city and resort. This will likely result in a gondola that runs daily during peak winter and summer seasons. If not running in shoulder seasons due to low demand, the resort will operate a free shuttle between Meadows and the Base.
Designs for the new Gondola Transit Center put pedestrians first by removing cars from the area, making Mount Werner Circle no longer a through street and prioritizing pedestrian corridors through the area.
Top Photo Caption: The latest rendering of what a reimagined Gondola Transit Center could look like at the base of Steamboat Resort. (Steamboat Ski & Resort Corp./Courtesy)