$29M building permit issued for Sheraton Steamboat Resort remodel
STEAMBOAT SPRINGS — The city of Steamboat Springs will get a big chunk of change from a major renovation project scheduled to begin next month at Sheraton Steamboat Resort.
The Sheraton, which is converting a majority of its remaining hotel rooms into timeshares, recently pulled a building permit valued at $29 million for the remodel of its west tower.
As a result, the city will rake in $1 million in building use and excise taxes from the project.
All the tax money supports the city’s capital improvement budget.
The expected tax revenue for Routt County wasn’t available Monday.
The city’s expected tax infusion does come with a caveat.
Last year, Sheraton officials told city Finance Director Kim Weber that the city might see up to a $200,000 reduction in sales tax revenue this year due to some hotel rooms being unavailable as they are converted into timeshares.
Sheraton General Manager Dan Pirrallo said Monday the renovation project is slated to get underway about April 24.
The renovation plans cover 94,000 square feet and call for 188 hotel rooms in the West Tower to be converted into 112 timeshares.
Some portions of the exterior balconies on the property will be filled in to add more square footage inside the timeshares, and upgrades to the roof will prevent snow from piling up in the plaza below.
The hotel will continue to operate during the construction, Pirrallo said.
“The permits have been pulled and approved, and the project is going to move forward,” he said.
Pirrallo said he still could not comment on broader plans for the base area.
Some business leaders in the community have reported that the Sheraton is getting out of the group conference business and will eventually convert meeting rooms into amenities for timeshare owners.
While the city will see a sizable boost in tax revenue in the short term from the renovation project, the long-term revenue implications from the big changes at the Sheraton remain to be seen.
With a majority of the hotel rooms at the property moving to point-based timeshares, some community members have wondered whether the city might take a hit in sales and lodging tax revenue that hotel guests pay on nightly rentals.
But some business leaders have predicted that having the rooms convert to timeshares could actually serve as a boon to the city, because they might be occupied more days of the year, and their occupants would, thereby, be spending more and generating additional sales tax revenue outside the property.
City Councilman Scott Ford said Monday the point-based timeshare system still results in a taxable transaction.
But what does it look like?
Ford said it’s more difficult to figure out.
“The challenge is, these points have value, but their value is variable,” he said. “Points are not like dollars.”
Ford said it requires a bit more algebra to determine the value of these points for taxing purposes.
What impact will the Sheraton remodel have on the availability of lodging this summer?
Ford said he thinks the city has enough supply.
“There might be a little bit of supply and demand on the rate, but we’ve got capacity,” Ford said. “It’s not like (trying to find a room during the winter) in condoland.”