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Our view: Risk is part of the game

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We were concerned to learn last week that the 450-unit subdivision proposed for the west side of Steamboat Springs remains stalled at an apparent impasse between city leaders and developer Brynn Grey Partners.

At issue

City leaders remain hesitant to move forward with the proposed 450-unit subdivision on the western side Steamboat Springs

Our view

While risk assessment is vital to vetting any new project, we think the potential repercussions of not taking action outweigh the risk of moving forward

Editorial board staff only

  • Suzanne Schlicht, COO and publisher
  • Lisa Schlichtman, editor
  • Jim Patterson, evening editor
  • Tom Ross, reporter
  • Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com.

During a Feb. 14 meeting of the Steamboat Springs City Council, members — though amenable to the concept of the project — remained hesitant to move forward, despite a new proposal from Brynn Grey designed to allay some of the council’s concerns.

Specifically, the lingering hesitation on the part of City Council seems to be centered around acquiring and funding water infrastructure and paying for the new subdivision’s future water needs.

Brynn Grey has proposed that each buyer of a market-rate home in the new neighborhoods would pay a $16,000 fee to the city that it could use to secure future water sources and infrastructure. The city estimates such a fee could generate $4.8 million.

The developer’s proposal stipulates these fees would be paid when the homes are purchased. But several council members fear such an arrangement would take too long to generate adequate funds, and the city wouldn’t be able to accomplish anything meaningful or impactful with it in the beginning.

Some council members also expressed concern with the proposal’s stipulation to forgo a $1 million secondary water line into the new development until the second phase of the project is underway.

Brynn Grey took a different view, saying the housing units wouldn’t generate additional demands for water until and unless they were built. If they are built, the developer argued, the water fees would be collected.

Both sides, it seems, are operating under the belief that the other doesn’t have adequate “skin in the game.”

Brynn Grey, like any for-profit endeavor, is seeking to maximize the financial gain, and the city, like any municipal government, is looking to minimize the financial risk.

While we understand City Council’s fiscal concerns and appreciate its desire to protect taxpayer interests, housing development is seldom a risk-free proposition.

The bottom line is, we stand at a tipping point with regard to the housing crisis, and if we want this development, we need to meet the developer partway.

At the Feb. 14 City Council meeting, members of the local Young Professionals Network stepped forward to encourage city leaders to work toward a partnership with Brynn Grey and get this project moving forward.

“Will you make room for the future teachers and emergency service workers of this community, or are you guys going to be known as the council that was too scared to move forward, that was too obsessed with fiscal conservatism to think about where to put all the humans?” local realtor and YPN member Matt Eidt asked the City Council Tuesday night.

“I’ve seen a lot of really great people come with fine, great jobs and then not be able to find housing, and they’ve had to leave,” YPN chairperson Reed Jones added.

And while we understand the necessity and the desire to thoroughly vet the proposal, we also agree with the YPN members who spoke in favor of the project.

If we hope to continue growing, we must provide adequate housing opportunities to the burgeoning crop of young professionals and workers who want to make their homes in Steamboat, and if we’re to do that, we have to take a leap of faith at some point.

Brynn Grey has a proven track record of successfully developing the sort of housing we need in communities very similar to our own, and while the risks inherent to such a massive undertaking can never be fully eliminated, we think Brynn Grey’s proposal — and its willingness to make concessions — work to minimize that risk.

Excessive hesitation often has a chilling effect on opportunities — “paralysis by analysis,” as Eidt described it to council members Tuesday; it is our sincere hope that council members will redouble their efforts to find a mutually beneficial way to successfully partner with Brynn Grey on this much-needed development.

Comments

Steve Lewis 1 month ago

Please educate us on the "future water source". Is it via senior water rights we can purchase today? Would these be junior water rights? What is that cost? Etc...

Thank you.

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Stuart Orzach 1 month ago

The Editorial Board fails to articulate why the current housing market conditions create a crisis or put us at a tipping point. These claims need to be substantiated.

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Scott Wedel 1 month ago

Steve,

The cost of water rights is largely unknown because we don't have an active local market for buying and selling water rights. SB is talking about water rights that won't be needed for decades which also makes it difficult to project a cost. With a decent water conservation/efficiency program, those additional water rights might never be used. So there are a bunch of unusual variables in this possible water rights purchase? Would water right calls be limited to when needed by SB City water dept? Or would SB water always take the water and resell water on an annual basis to others until needed by SB?

The whole water issue has largely nothing to with this development. SB Water staff says we have plenty of water for infill and this development. The "urgent" water issue is that a horrible forest fire at the city's main watershed would leave the city for months without enough water to support current exterior watering. We'd be fine for winter peak tourism even after the forest fire. City water is adding more wells that draw from the Yampa River to alleviate that issue. But at some point, we will need Elk River water rights if we are to get through a bad fire in Spring Creek watershed without affecting summer watering.

Stuart,

The idea of a tipping point in housing is nonsensical. Tipping point refers to systems that fundamentally change after a certain point such natural gas becoming cheap and displacing coal for generating power. There would be no new dynamic in SB housing caused by pricing exceeding a certain point. It isn't as if suddenly people are going to buy multiple condos to convert into one luxury condo.

The one tipping point in local housing is that housing prices might finally be reaching the point to support building new housing in Hayden, OC and Stagecoach. That is not a crisis.

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Stuart Orzach 1 month ago

That price point would be called a threshold. A tipping point is an entirely different, and far more ominous animal.

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Scott Wedel 1 month ago

When a tipping point is discussed by those that know the meaning of the term then it will be stated what becomes the new stable situation. There is nothing ominous of a tipping point. There was a tipping point when there were enough people with iPhones that it became worthwhile to develop apps. Once people started making apps then iPhones became more popular and made it even more worthwhile to develop apps. Nokia's mobile phone operating system never became widely enough used to reach that tipping point.

This editorial's usage of "tipping point" is nonsensical because it is never asserted what is the new stable dynamic. Without a description of the new situation then there is no way to understand why it would be a crisis. I think the most likely result of the increase in housing prices are good things such as businesses having to pay workers better and more workers able to afford new houses in the region.

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Stuart Orzach 1 month ago

I'm not interested in debating semantics with you in this forum, Scott. I would simply like to know what the Editorial Committee means by "crisis" and "tipping point" in the context of this editorial.

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Scott Wedel 1 month ago

Stuart,

I am not arguing with you. I am just saying that they used 'tipping point" as a catch phrase without understanding what it means. If they knew what it meant then they'd describe what we on the verge of tipping into.

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Lock McShane 1 month ago

Scott, one solution to the threat of wildfire to the watershed would be to do controlled burns during the winter months so we could get rid of the dangerous dead overstory without harming the understory that protects the watershed. I suggested this to the local Forest Service years ago, but it went nowhere.

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Scott Wedel 1 month ago

Lock,

A generic wildfire would not prevent using the watershed for water. The fire above Stagecoach hasn't caused anyone's water system to be threatened. The big problem would be a fire so severe that they needed to use enough fire retardant chemicals above the levels which a treatment plant can reduce to safe levels.

I think water is just being used as an excuse for those inclined for no growth to find a way to have no growth. The water situation has not changed from when that parcel was put inside the UGB and made part of the WSSAP. Nor does city water dept claim there is not enough water supply or rights to serve the proposed annexation.

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Steve Lewis 1 month ago

Scott, the opposite is true of my interest in "future water". Simply put - water is required for growth, there is increasing competition for water and of course we will need water for later annexations too. The city once held that annexations had to bring their own water. That was a philosophy allowing for MORE growth, not less.

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Scott Wedel 1 month ago

Steve,

The big issue with water is that to deal with a watershed fire that city water dept is looking to get water from the Elk River. Getting some Elk River water rights would not appear to be very expensive, The expensive part is building the infrastructure to hook Elk River water into the city's water system.

The city has a number of policies in conflict. WSSAP and UGB state that area is to be the primary area for future growth. The goal is higher density housing that is at least attainable by local professionals. The higher density housing increases the need for water. So how to solve the issues?

Most of the city council are gravely mistaken and think that developers pay for added expenses. In fact, the home buyers will be paying all costs. If the city adds enough requirements adding costs then soon enough the potential homes would become too expensive to be in the attainable range and will be shifted into the luxury price range. When in the luxury price range then it gets cheaper for the developer to build large lots than don't have to worry about community plans and can survive off of wells or trucked water.

And then city is left with no place for future growth. Strawberry Park and East/South Valley have longstanding plans to remain open and are off limits to development. The west side parcel with no water has been planned for two decades as being the growth area

Brynn Grey has a strong history of building attainable developments in Colorado mountain areas. If city cannot reach a deal with them then there is no reason to think there are other developers in the wings seeking to jump in that would offer the city a better deal.

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Martha D Young 1 month ago

Thanks, Steve. I wish that the city still held that requirement.

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