Kinder Morgan to sell Colorado retail gas operation to GE unit
DENVER – Kinder Morgan Inc. has agreed to sell its Colorado-based retail natural gas distribution business to GE Energy Financial Services for $710 million.The business, based in suburban Lakewood, has 260,000 customers in Colorado, Nebraska, Wyoming and Hermosillo, Mexico.The business will remain in Lakewood, Houston-based Kinder Morgan said Monday. The gas unit could add up to “a couple dozen” new jobs to the 45 now in place, said Dan Watson, president of the division.The deal is expected to close in the first quarter of 2007. The operation will get a new name, which has not been chosen, officials said.The business was operated by KN Energy until the $1.1 billion merger of KN and Kinder Morgan in 1999.Kinder Morgan’s main business is transporting and storing petroleum products across 43,000 miles of pipeline and 150 terminals. It has 600 other employees in Colorado and is a partner in the $4 billion Rockies Express pipeline planned from northern Colorado to eastern Ohio.The retail gas unit “is a good business that produces stable cash flow,” Kinder Morgan chief executive Richard Kinder said. “However, given our small retail footprint within the United States and the proceeds (Kinder Morgan) will receive, the sale makes sense for our shareholders.”Kinder Morgan stock was down three cents at $100.96 in midday trading on the New York Stock Exchange Tuesday.Richard Kinder is taking Kinder Morgan private in a $22 billion buyout.Jury still out on Aspen fractionalsASPEN – Sales of fractional-ownership condominiums have quadrupled nationally over the past three years. Fractional ownership is the 21st-century version of the timeshare: Someone can buy an interest in a property, such as an eighth or 12th share that translates into a several weeks a year at the fractional-ownership resort.Aspen, with a quarter of the 32 fractional projects in Colorado, is at the epicenter of the crunch to build more.Questions remain, however, about the impact of fractionals on the community. In fact, the Aspen City Council has recently questioned the need for more fractional projects in town, such that developers are hesitant to propose them at this time. “There’s a feeling the city council isn’t sure they like it,” said Mitch Haas, a private land planner based in Aspen. “The focus is more on that than why they meet the code requirements. [Developers] want to [build fractionals], but now they’re weighing other options.”The skepticism is not based on any hard statistics, although the city is studying fractional projects and their effect on the resort economy. City council members have a number of concerns about fractionals, from crowding the offseason, to creating empty bedrooms, to loss of tax revenue. What they could agree upon, though, is that fractionals are hot. To give some idea of the booming nature of fractionals, nationwide sales went from $513 million in 2003, to $1.5 billion in 2004 to nearly $2 billion in 2005, according to a study by the National Association of Realtors. The Residences at Little Nell, for example, a $380 million development of 26 residences (19 three-bedroom and seven four-bedroom) are selling for prices unheard-of in the fractional industry. A one-eighth share of a three-bedroom condo is going for $1.37 million, and a one-eighth share for a four-bedroom unit is up to $2.25 million. The Ritz-Carlton, with a fractional at the base of Aspen Highlands, has doubled its fractional portfolio with four new properties under construction in Maui, Lake Tahoe, San Francisco and South Beach, Fla. Aspen Mayor Helen Klanderud doesn’t want to see empty bedrooms and recognizes that more people in the offseason would help small businesses survive the offseason. That coin has another side. “Those of us who live here need offseasons,” she said. “There may be a diminished offseason due to fractionals.”These ideas are exactly that, ideas. That’s why the city is moving forward on collecting information from the various fractionals around town to get some data on the customers and their habits. “We’re going to survey the fractional owners,” said Paul W. Menter, finance director for the city. “Assertions were made in the application process about economic activity. We’re testing those assumptions.”It remains a question how much fractional owners spend in town and how often they actually use their designated days. For instance, it has been suggested they would spend more in town because they don’t have a big lodging bill at the end of the stay, the lodging is already paid for. “For me personally, the downside is more that you’re dependent on one strata of tourists,” said councilwoman Rachel Richards. “It’s definitely high-end, people willing to buy in advance, pay a mortgage for a vacation in your community.”Indeed, Ritz-Carlton says that its member demographics are in the top 1 or 2 percent for wealth, with a net income at $300,000 or higher, and a net worth of $3 million or more.For Richards, the main issue comes down to a healthy mixture of various beds for tourists. “Who is your bed base? Are there too many fractionals dominating your market?”Vail Daily, Vail, Colorado
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