Complaints are mounting for tenants at Main Street Apartments and Flour Mill Apartments who are angry about the Indiana-based company that bought the two properties in February.
Both apartment complexes in Steamboat Springs were built as hotels and later repurposed into long-term housing. For years, the hotels-turned-apartments were considered affordable housing options for Steamboat’s workforce. But among some of the remaining tenants from the previous ownership, tempers are particularly high.
“It’s another one of those absentee landlord greedy situations to be honest,” said Ian Engle, who has lived at the Flour Mill Apartments for two years.
The history of the Flour Mill Apartments is somewhat complicated.
The city of Steamboat Springs bought the Iron Horse Inn for about $4 million in November 2007, in the middle of the election season, in a decision that was widely criticized around the city.
“It’s in direct competition with the private sector’s ability to provide rental housing,” Scott Myler said shortly after winning a city council seat in 2007.
Not long after, however, the housing market crashed and the naysayers turned out to be right. The city paid about $480,000 a year in debt service and struggled to identify the best use for the property.
The city used it as a hotel, but lost money. The city used it as workforce housing, but lost money. Then city officials shut it down and left the property vacant — still losing money. They thought about tearing it down and building a police station, but ultimately city officials wanted it off the books entirely.
In 2015, the city sold the property for $2.5 million, and the Iron Horse Inn became the Flour Mill Apartments. According to a March 2016 article in the Steamboat Pilot & Today, when the new owners took over, they did renovations and raised rents from about $700 for a studio apartment to about $900 — and people were outraged.
“They’re going to make a lot of money out of this place,” a tenant told the Steamboat Pilot in 2016. “I don’t know why the city isn’t up in arms about this. It could have been a revenue-producing asset.”
It’s not clear how profitable the complex was, but the new owners made a lot of money on the sale when they sold the property to an Indiana private equity investment firm – Birge and Held – in February for $14.6 million. The Main Street Apartments were part of the same deal and sold for $9.4 million.
Since the two properties changed hands, tenants at both complexes have been vocal about their displeasure with the new owners.
“My rent would go up to $1,800 at the Flour Mill,” said Chase Unruh, a former tenant who decided not to renew his lease. “This is before I knew about the $175 additional flat fee for utilities, which is completely insane to me.”
Under his lease with the previous owners, Unruh paid $1,600 a month, including utilities, for a small studio apartment. According to Unruh and every other tenant interviewed, no renovations were made in conjunction with the rent increases.
In fact, tenants at both complexes received notices on their doors from Birge and Held saying they would have to pay fixed utility fees. The new costs for utilities came in addition to the general rent increases.
“There’s no way for them to know how much each unit is using — water, electricity, all of that,” said Nicki Silverman, a former tenant at Main Street Apartments who moved in at the end of October. “It sent me off. I’m not paying you $200 extra a month for something you can’t prove. I use less water than people where there are two or three people living in these small places.”
A spokesperson for Birge and Held responded to questions about Silverman’s claims in a written statement.
“The $140/month utility fee charged to all residents includes electricity, gas, water, sewer, internet, pest control and trash services for our residents,” the company spokesperson wrote. “This offsets the increased expenses for the property for these services.”
Documents provided by tenants at both Main Street and Flour Mill Apartments show utility fees ranging from $150 to $185, as the $140/month described by Birge and Held is the base rate.
“A hundred and seventy-five dollars for 300 square feet, right?” Unruh said of the utilities. “Look insane.”
Unruh moved out of the Flour Mill Apartments in August after finding a 550-square-foot studio apartment near Steamboat Resort. He said he pays about $150 in utilities at the new location, and generally pays about the same amount he would at the Flour Mill, even though he lives in a larger unit. Unruh added that he packed up and left amid a cockroach infestation.
Allison Plean, a tenant at the Flour Mill Apartments, describes the complex as “Hotel Hellifornia” and says she sees people so desperate to move out, they’re willing to break their leases.
“Mine comes in March,” Engle said of his lease. “I’m looking hard for somewhere else to go, but you know, as a paraplegic with two service dogs.”
He said even though he remains active in adaptive sports, there are still things he needs help with. He said that his landlords should offer better accommodation as his rents are rising, but feels the opposite is true.
“We pay more for less,” Engle said.
Relying on a manual wheelchair, Engle said since the new owners took over, he has seen less maintenance and support, and communicating with Birge and Held has been frustrating.
“I don’t even feel comfortable asking for them to come in and wipe out the cabinet under my sink so I can roll under it and do my dishes,” Engle said.
Even as rents for studio units approach $2,000, the Flour Mill Apartments and the Main Street Apartments are both still marketed as affordable housing. They were one of the cheapest housing options in town before being bought by Birge and Held, and the same may be true even after the rent increases.
“Costs for housing, labor and supplies have increased more this year than in past years,” the Birge and Held spokesperson wrote to the Steamboat Pilot & Today. “Our average rent increase is very similar to the increase in the consumer price index (CPI) for 2022.”
In February, when Birge and Held invested at least $24 million in the purchase of the two properties, nearly half of the homes sold in Steamboat Springs were purchased above their listed price, according to Redfin.com. The following summer was a historically active time for real estate transactions in Steamboat until the housing market began to come back down to earth in August.
With that, it looks like Birge and Held may have bought high, and for many of the stay-at-home tenants, they feel they are paying for it.
“The Flour Mill is just this little microcosm of things that are happening right now,” Unruh said. “What’s happening with the Flour Mill is very important because it’s part of an overall trend we’re seeing — not sustaining a workforce in this town.”
To reach Spencer Powell, call 970-871-4229 or email him at spowell@SteamboatPilot.com