East West, partners buy Snowmass Base Village
December 22, 2016
ASPEN — Avon's East West Partners, Aspen Skiing Co. and an affiliate of KSL Capital Partners completed their purchase of a lucrative property at the base of Snowmass Ski Area on Thursday.
The joint venture acquired the Snowmass Base Village project from Snowmass Acquisition Co., an affiliate of Related Companies.
The deal included a substantial amount of undeveloped ground that already has approvals for a hotel and condominiums, commercial space and community facilities, such as an ice rink. The complicated transaction also included the sale of Snowmass Hospitality, a property management company, and the Viceroy Hotel operations, which includes the unsold condominium units.
The purchase price hadn't been recorded with the Pitkin County Clerk and Recorder's office as of Thursday afternoon. The real estate — separate from the property management company and Viceroy operations — sold in the mid-$50 million range, according to a source familiar with the transaction.
“Everything we’re building in the village has the potential to be hot beds.”Andy GunionChief financial officer, East West Partners
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The joint venture will start construction of the Limelight Hotel this spring, according to Andy Gunion, the chief financial officer for East West Partners. He will be the managing partner in the Roaring Fork Valley for his firm and oversee construction and day-to-day operations of the joint venture. He and his family are relocating to the Roaring Fork Valley.
Aspen Skiing Co. will purchase the 102-room hotel and 15 residences from the joint venture once they are completed, according to a prepared statement released by the joint venture. Skico will operate the hotel. It will also purchase a Four Mountain Sports ski shop, which will be built next to the hotel in a small building.
Adding 'hot beds'
Gunion said construction will start on multiple buildings in the village core in 2017, headed by the Limelight in the spring. The next phase will be construction of the public plaza and ice rink as well as the Four Mountain Sports building in the summer.
Buildings 7 and 8, which feature 48 condominiums between the two of them, will get underway later next year.
Aspen Skiing Co. has coveted the development of Base Village since 1999 as a way to add tourist accommodations so that Snowmass Ski Area can boost business. Company officials will soon get their wish for "hot beds."
"Everything we're building in the village has the potential to be hot beds," Gunion said.
The trend has been for condominium owners in mountain resorts to rent out their property for extra income. He suspects that will be the case with the vast majority of condos in Snowmass Base Village because so many are ski-in, ski-out.
The buildings in the village core combine for 102 hotel rooms, roughly 55 residences with 170 bedrooms, according to Gunion. Up to 11 of the residences are required to be fractional ownership units.
In addition, the existing buildings in the project, which include the Viceroy Hotel, have 241 units with 369 bedrooms.
Outside of the village core will be an additional five buildings that will be constructed by East West Partners and its team. When everything is constructed, Snowmass Base Village will contain an estimated 600 residences and hotel units comprising more than 1,000 bedrooms, Gunion said.
Putting the 'there' there
Gunion said East West's goal is to do more than add units at the project. Snowmass Base Village "needs heart and soul that's missing today," he said.
The development firm, which was founded in 1986 to initially develop property at Beaver Creek, has undertaken numerous projects at other Western ski resorts. It will apply the lessons it has learned in other resort villages without taking a cookie-cutter approach, Gunion said.
East West Partners gets approached with numerous opportunities to get involved in development projects but turns down about 90 percent of them, he said. Snowmass was different because of the high potential of creating a signature project at the base of a successful ski area.
"As cheesy as it sounds, we consider ourselves place makers," Gunion said.
In its partially built state, Snowmass is vibrant and active at the base with its current slopeside amenities, he said. But once the sun goes down, the village is a ghost town. East West Partners hopes to change that with the ice rink and plaza and space designated for public uses, which the town of Snowmass Village is considering for a Discovery Center. The center would showcase the mammoth fossils and other discoveries at Ziegler Reservoir.
Long time coming
Snowmass Base Village has been plagued with problems. Skico bought 500 acres of prime ground in 1999. A wholly owned Skico subsidiary formed a partnership with Intrawest Corp. in 2001 and they earned land use approvals from Snowmass Village in 2004.
The partnership started construction in 2005 but sold to Related WestPac in 2007. Related lost the property to foreclosure during the Great Recession but was able to reacquire it.
Related received approvals from the town government for a reworked project in September. Skico, East West Partners and KSL Capital Partners announced they were negotiating to buy the property immediately after the approvals were granted.
If everything goes as planned, Gunion said, then the Limelight Hotel will be substantially completed by Nov. 1, 2018 and the hotel will open for the 2018-19 ski season. That will be the first step undertaken by the joint venture.