Denver-based developer planning 200-unit, new-construction hotel in Avon
The pace of building
2008: The Westin Riverfront Resort & Spa in Avon opens.
2010: The Four Seasons in Vail opens.
2020: Possible opening for a Marriott Residence Inn hotel in West Vail.
2021: Possible opening for a new hotel-condo project in Avon.
AVON — The parcel of property east of The Ascent condominiums in Avon has been for sale for a long time. Now, a Denver-area builder says he has an ambitious plan for the land.
Branko Mocevic is the principal of a pair of Denver-area firms, Colorado Homes and United Construction. Mocevic said this week that United Construction will submit a plan for the property to town of Avon officials in the coming days. That plan calls for a 200-unit luxury hotel-condominium complex on the property.
Mocevic said instead of working with an established hotel brand, he intends the complex to be an independent brand.
“If you have the best product, you’ll succeed,” Mocevic said.
Mocevic said his company in 2008 looked at a project on the property, but the national economic meltdown that year derailed that plan.
Anticipating an approval process that could take 10 months, and a construction schedule that will stretch “at least” two years after that, Mocevic said he owns a condo in Avon’s Chapel Square building. He said he’s also building a personal home in Cordillera.
The property east of The Ascent is steep, so Mocevic said the plan for this project will stair-step up the hill, from a two-story, partially buried underground parking structure.
But there will still be plenty of excavation involved. Mocevic said United Building — which is currently building 130 homes in Brighton, north of Denver, and a hotel in Parker, on the south side of the metro area — has the ability to do most of the work.
“If you go there and build, and you have to hire me, you’re going to lose money,” Mocevic said. “We own our own machines.”
Mocevic said the project still carries a $70 million estimated price tag.
Mocevic said his firm has already hired landscaping and electrical subcontractors. “There’s no way out — we’ve made the commitment,” he said.
Deal still pending
That said, the sale of the parcel still hasn’t closed.
Local Realtor Mike Budd represents the property seller. Budd confirmed that Mocevic and his financial partners have the property under contract. But, Budd said, the window is starting to “tighten” on completing the deal.
Budd has been the listing broker on the property for the past two years. This is the fourth time the land has been under contract for sale.
None of the first three potential buyers could find a way to close the deal, Budd said, adding that “nobody has been particularly diligent about putting a proposal before the town (of Avon).”
Budd said he has seen enough of the seller’s side of the deal to know there’s adequate financing.
“But until the money changes hands, we won’t know for sure,” he said.
If the deal is done, and the town ultimately approves the project, then the Vail Valley could have two new hotels open in a roughly two-year span.
The Vail Town Council earlier this year cleared the way for a Marriott Residence Inn — and nearly 100 deed-restricted apartments — on the old Roost Lodge site in West Vail.
Local planner Dominic Mauriello has represented that Chicago-based developer Peter Dumon’s Harp Group in the town approval process. Mauriello said the last step in that process is completing a development agreement for public improvements and fees.
Those agreements take time, and Mauriello said if all goes well, then construction on that project could begin in the fall — “optimistically” — or in the spring of 2018.
A long time coming
It’s been some time since brand-new hotels were built in the valley. The last big project, the Four Seasons in Vail, opened in 2010. Mauriello said financial markets now seem to be responding more positively to ideas for new lodging.
Ralf Garrison is the co-founder and principal of DestiMetrics, a Denver-based research firm that tracks lodging occupancy in mountain resorts across the western United States.
Garrison said that the economic foundation is starting to firm up for adding hotel inventory in resorts that are becoming more balanced in summer and winter occupancy.
“Their rule of thumb is sustainable, year-round occupancy,” Garrison said, adding that his company puts that seasonal occupancy level at about 65 percent.
Alternatively, markets that aren’t hitting that rate of occupancy need to show strength in seasonal rates.
“If you don’t have enough occupancy, but you have (pricing power), you can get to your revenue numbers,” Garrison said.
With more hotel rooms — “hot beds” in lodging jargon — Garrison said that can ease pressure on rent-by-owner condos. Garrison calls that competition between hotels and rent-by-owner units a “pillow fight,” something that could put more residential units back into the long-term rental inventory.
The numbers apparently make sense for investors in these projects.
And, Mocevic said, growth in the Denver area means economic opportunity for those building hotels and condos in mountain resorts.
Current estimates show about 10,000 people per month moving to the Front Range, primarily into the Denver metro area.
“Let’s say that lasts another five years,” Mocevic said. “How many of those people want to go ski or do outdoor things? It’s a big demand.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com and @scottnmiller.