Tuesday, May 13, 2008

Resort Group Possibly to Manage Iron Horse

Resort Group courts Iron Horse
City in final negotiations for inn’s private management
By Brandon Gee (Contact) - Reporter
Saturday, April 19, 2008

Steamboat Springs — Steamboat Springs officials are close to finalizing an agreement that would provide for the private management of the city-owned Iron Horse Inn, a move that could save the city about $62,000 a year.

The Iron Horse Inn was purchased last year in a deal ap­­proved by the previous Steam­boat Springs City Council. The city initially planned to spend $1 million — of the $5.3 million borrowed for the purchase — to renovate the hotel’s 52 rooms into 40 traditional apartments that it would rent as affordable housing.

The current City Council, however, directed city staff not to spend the money and to solicit private-sector partnerships and ideas for the management of the inn. Central Park Management and Resort Group submitted plans for continuing to run the inn as both work force housing and a lodging operation. Resort Group also submitted a second option to use the Iron Horse for work force housing only, and that’s the proposal a team of four city staff officials decided was the best option for the city.

The agreement as currently proposed would result in a $38,000 annual subsidy from the city after expenses and debt service. Finance Director Lisa Rolan said the subsidy under city management is about $100,000. In addition to saving money, a city staff report notes that private management is beneficial because it reduces the workload for city employees and reduces the negative perception of the city competing with the private sector. Twenty units would be reserved for city employees.

These terms are tentative; final negotiations are under way.
“As the manager of the city, I think as we go forward in the future, without having some seasonal and transitional housing, recruitment for us is going to be virtually impossible,” City Manager Alan Lanning said. “Going forward, having housing available to us in a variety of styles is going to be like having vehicles.”

Lanning said his involvement in professional organizations such as the Colorado Association of Ski Towns has given him some perspective on the issue of work force housing.
“This is really a concern that we all share,” Lanning said. “From those who are a little more advanced in the problem, I think I understand where this is all headed. … A number of (officials from other ski towns) have said to me that they thought our purchase of the Iron Horse was a really good idea.”

Resort Group Vice President Tom Simmins said management of the Iron Horse Inn fits his company’s profile.
“That’s what we do,” Simmins said. “We also manage the employee housing for Ski Corp.”
Simmins is not concerned about working for a governmental entity for the first time.
“We have multiple clients, multiple situations, and we feel we’re able to adapt to anything,” Simmins said. “We can’t foresee any problem. Managing employee housing is one of the things we do, and we do it well.”

Simmins said it’s too early to say what the fate will be for Iron Horse employees. He said Resort Group has its own full-service staff and resident managers. Resort Group contracts for housekeeping work.

“If they have a maintenance guy there and he’s a good guy, I might hire him,” Simmins said. “If there’s good people there and I can fit them in, I’ll evaluate that.”
Simmins said the work force housing model is less profitable than one that keeps nightly rentals in play, but he said the demand for work force housing is so great that the company is willing to take less money. Simmins said that between the city’s and his own employees, there might not be any rooms left to rent.

“There’s such a great need for employee housing that all of us were willing to take a little less to get employees,” he said. “If I have a need, then yes, I will pay full market rates for my employees to live there as well.”

Any leftover units will be open to the public, Simmins said. Resort Group is expected to assume management June 1. The city’s next step with the Iron Horse is to consider redevelopment opportunities, Lanning said.
— To reach Brandon Gee, call 871-4210
or e-mail bgee@steamboatpilot.com