Proposal would create six metro districts controlled by the resort and allow bonding capacity to fund upgrades to skiers arrival to the mountain.
Steamboat Ski & Resort Corp. presented a plan to Steamboat Springs City Council on Tuesday that would set up several metro districts on resort-owned properties near the base area and provide a mechanism to fund significant improvements to how skiers arrive at the mountain.
While the properties proposed for the metro districts are all currently owned by the resort, they are expected to be sold to third-party developers in the near future. Setting up the metro district now puts a dedicated funding mechanism in place that would pay for a part of an overhauled Gondola Transit Center and a new gondola to and from the Meadows Parking Lot, with work starting as soon as next year.
“We have incredible on-mountain facilities, great snow, great guest service not only at the resort but in the community and all the way out to Yampa Valley Regional Airport,” said Rob Perlman, president and CEO of the resort. “Now we need to move further towards the base of the resort.”
Perlman said Steamboat Resort is somewhat unique among its peers as nearly all skiers arrive to the base in the same location, which makes these improvements to the transit center a priority for them. He said the goal is to continue the momentum started by the resort’s investment of more than $220 million into its on-mountain facilities, uphill capacity and expanded terrain.
On Tuesday, City Council directed staff to keep working with the resort on the service plan that would be required to set up these metro districts. Council would see the finalized service plan on June 1, with approval being needed before Aug. 22 to allow landowners that are part of the metro districts — currently just the resort — to vote in November.
Andrew Lang, vice president of strategic planning and development for Alterra Mountain Company, said the proposal is essentially a self-imposed tax. If not done now, the districts become more difficult to set up as developers purchasing the land from the resort may not be as willing to impose these additional property taxes.
“With that self-tax, we create bonding capacity that we can use to fund public improvements,” Lang said. “The critical timing factor here is that we are in the process of changing ownership of those parcels to other developers and third parties and once that happens it becomes more difficult to set these metro districts up because, to be frank, not many developers are willing to tax themselves to benefit others.”
The resort estimates that the initial phase of development would include the Gondola Transit Center and the new Meadows Gondola, costing roughly $26 million. About $10 million of that would come from the Mountain Urban Redevelopment Authority, which expires in 2029, and the remaining $16 million from these metro districts.
Lang said the mill levy imposed on these districts would have a maximum of 50 mills and that properties closest to the base will remain in Ski Corp.’s ownership will pay that maximum. Other properties would pay a lesser tax rate, for now, to allow development to take place. Imposed mills could be increased in the future to create additional bonding capacity for more improvements, such as an overhaul of the Meadows Parking Lot. By creating six different districts, the resort can set different mill levies at different properties.
Currently, many homeowners within the city who are not part of another metro district pay about 55 mills in property taxes, so these districts could nearly double that property tax rate. Lang said the proposal mimics the Riverside Metro District, which also assesses 50 mills and was approved by the city in 2017.
“We do intend to tax ourselves most,” Lang said. “We’re looking at probably a range of 15 to 30 [mills] on the individual development parcels [being sold off] depending on the products, whether they’re commercial, hotel or residential.”
For the district to be formed council needs to approve what is referred to as a service plan, which outlines the purpose for the district and what it can do. That plan would not specifically outline all projects though. A different plan — a public improvements agreement — would outline those specifics and would not need to be approved until the metro districts are set up.
City Attorney Dan Foote said council could delay approving the service plan until the public improvements agreement is in place, but that would likely push the vote until November 2024 and delay projects from starting until 2025. Until the public improvements agreement is approved, the metro districts wouldn’t be able to secure bonding, Lang said.
The most recent version of the draft service plan was submitted to city staff just before Tuesday’s meeting. Robert Rogers, a lawyer for Alterra, said the latest addition to that service plan includes projects that are also part of phase three of the URA projects plan, though their inclusion does not necessarily mean they will be completed as the service plan itself is not binding. The public improvements agreement would be binding though, Lang said.
Lang said is possible that the public improvements agreement is in place before the November election, though having it before the Aug. 22 date that the service plan needs to be approved may not be realistic. While important procedurally, the November election seemingly has a known outcome, as the resort is the only voter.
“We’re intending to use this as a mechanism to fund improvements that we’re willing to self-impose taxes on,” Perlman said. “So that we can continue, as I said, the momentum and start really creating a great benefit to the Gondola Transit Center, to the traffic flows, to the Meadows, to the gondola.”
Funding from the metro districts may not come right away, as development of the parcels may need to occur before bonding is secured. Lang said Ski Corp. is willing to fund projects upfront if they know the metro districts could eventually reimburse the resort.
An important piece of future development will be the Meadows Parking Lot, which serves as the largest parking area for the resort and may be more important in the future as other parking is consumed by development. Lang said plans for Meadows are still “hazy” and are not part of the initial phases of improvements the metro districts would fund.
Council member Dakotah McGinlay was particularly concerned with the potential loss of parking around the base area early plans proposed could facilitate. All development would be subject to the city’s parking requirements, though the development code does not require parking lost to be replaced elsewhere.
Council directed staff to continue working with the resort to move the metro district proposal forward on the resort’s timeline. While not every member expressed support for the overall idea, none of them expressed opposition.
“It’s a win-win situation,” Council member Michael Buccino said. “I just haven’t seen any red flags. … There’s some questions here and there, but this seems like it’s a very unique way of funding this.”