top of page
  • Dylan Anderson

Steamboat snags 11 housing units for city employees in exchange for favorable $2.6 million loan to developer

Deal gives developer Gorman and Co. a 2% interest rate on the loan and the city gets first dips on 11 of the units in new Riverview Development in downtown Steamboat.


The city of Steamboat Springs will get first access to 11 affordable housing units in a new downtown development in exchange for offering developer Gorman and Co. a $2.6 million loan with favorable terms, according to a deal that got initial City Council approval on Tuesday.


The project, Riverview, already has planning approval and is located on the east end of downtown near Natural Grocers. These 11 units would be deed-restricted for people with incomes of 80% Area Median Income or less, with city employees having the first chance at the units. If staff didn’t fill them, they could then be offered to other local workers.


“I’m on board with it,” council member Joella West said. “I think it is a good investment on our part. I realize there is a risk involved with that, but it does address needs in the short term and at this moment this is the thing that we have to address, short-term needs.”


Council approved two steps on first reading Tuesday, the first on a 7-0 vote and the second on a 6-1 vote with council Member Dakotah McGinlay voting against. Her objection was that council intended to use Short-term Rental Tax revenue for this project and council has not yet created a system for how to consider proposals to spend that money.


The decision to move forward with the loan deal came after council discussed other ways it planned to address housing, with one of those being inviting private developers to submit proposals that use STR funds to create housing. In that discussion, council directed staff to bring back a proposal for how they could solicit potential project and consider them in a transparent and consistent way.


“We’re trying really hard to develop a process for allocating these short-term rental taxes,” McGinlay said. “To go out of this process just doesn’t seem right. I know that it seems like a good deal, but we also just backed out of a really bad deal. … It seems like maybe it’s not as good of a deal as we think it might be.”


The Riverview proposal had not been discussed publicly by council until Tuesday, though a potential workforce housing deal with Gorman has been the subject of two executive sessions in recent months. The deal arose around the same time Council abandoned its More Ranch employee housing project after partner UCHealth Yampa Valley Medical Center found another way to address its housing need.


The deal would put deed restrictions on 11 units — three studios, four one-bedroom units and four two-bedroom units. Rents for these units would be priced based on what would be deemed affordable for someone making 75% of the Area Median Income.


Rent for the studios are projected to be $1,564 a month, for the one-bedroom would be $1,675 a month and the two-bedroom would be $2,010. This do not include a $200 a month charge for parking or utilities.


Gorman and Co. has been developing affordable housing units in Colorado since 2014. Kimball Crangle, the Colorado Market President for Gorman, said they have developed 800 units in the high country and have another 450 units under construction when including projects in Denver. Gorman is working on a project in Hayden currently.


“This is a free market deal, 104 total apartment homes,” Crangle said. “We saw an opportunity to add some affordable housing here in town.”


Gorman was also the developer partner on the Yampa Valley Housing Authority’s Sunlight Crossing Development, which targeted incomes from 80% to 120% area median income. That development included 44 units at 80% AMI, 23 units at 120% AMI and 22 units at market rate rents. YVHA contributed a total of $1.6 million in that deal for 90 units, according to data from YVHA.


The difference here is that the $2.6 million would be repaid over a 15-year period. The loan would be subject to a 2% interest rate — a rate city attorney Dan Foote said was lower than inflation and much lower than current interest rates on the market. He noted the risk to the city is that when paid back, the money with interest will be worth less than it is now.

In public comment, local Developer Jon Sanders with Ski Town Commercial Real Estate encouraged council not to do the loan deal for the units, saying that he felt Gorman didn’t need that to make the project work. Sanders said he felt council could better spend the money elsewhere.

.

“We don’t need to do $2.6 million for a handful of units in downtown.” Sanders said. "I think your project is beautiful, it is amazing. But I also think that you could easily deed restrict these units without any harm or additional subsidy.”


While acknowledging Sanders comments, Council approved the deal on first reading.


“I still like this plan,” Council member Buccino said. “I still think that this is one of those examples that we as a community can show the development community that we are serious about doing stuff even outside of the housing authority. … We now have some funds that we didn’t have before.”


City Council intends to consider the deal on second reading at its April 16 meeting next week.  


Top photo caption: A rendering of part of the Gorman and Co. Riverview project on the east side of downtown Steamboat Springs. (Gorman and Co./Courtesy)

Comentários


bottom of page