Snowmass developer WestPac cuts quarter of workforce
Aspen, CO Colorado
SNOWMASS VILLAGE, Colorado ” Citing the global credit crunch, Snowmass Village, Colorado developer Related WestPac announced Tuesday that it had laid off 25 percent of its staff and delayed three buildings scheduled for construction this fall.
The developer will continue work on the Viceroy Condominium Hotel and the Residences at the Little Nell, according to President Pat Smith and Vice Chairman Ken Wong. They also stressed Related WestPac’s commitment to the roughly 10 restaurants and retail outlets still scheduled to open in Snowmass’ Base Village this fall.
The developer is currently building the $1 billion Base Village project, and it has plans to spend billions more redeveloping the Snowmass Center and West Village, site of the Snowmass Mall.
The global financial crisis had dried up financing for construction of Buildings 4, 6 and 7, which include the Key Collection condominiums and the Hospitality Center, Smith and Wong said. Related WestPac had just received building permits and expected to begin work on the buildings this fall. The condominiums went on sale July 1, and there are already a few reservations for them, the officials said.
Laid-off employees were told personally Tuesday morning. Those dismissed were offered severance packages.
“It really, really hurts,” said Smith.
Stating that they did not want to compromise the privacy of the newly jobless, Smith and Wong declined to give information regarding the number of layoffs, when the layoffs will take effect or whether they include both part-time and full-time employees.
However, they called the layoff an “across-the-board” cut, though spokeswoman Joanna Rose clarified that the cut does not include any workers in the new Snowmass Hospitality arm.
Noting that two of the Base Village financiers are Hypo Real Estate Holding ” the recent recipient of a $69 billion bailout from the German government ” and the now-bankrupt Lehman Bros., Smith and Wong characterized Tuesday’s news as the direct impact of the recent international financial crisis as it moves down the system to Snowmass Village.
And while they said they would continue to seek out construction financing, they suggested it would be impossible to guess when the world financial markets ” and thus their project ” will rebound.
But they argued that Related WestPac is “luckier than most,” because it has financing in hand to complete the two buildings currently under construction. Throughout the world, many development firms are trying to figure out how to continue current projects, they said.
Rose cited the recent developments on a Telluride project as an example. The Telluride Watch reported last week that workers had walked off The Capella Telluride ultra-luxury hotel, at least for the short term, over concerns about being paid. Lehman Bros. had been financing the project, the newspaper reported.
Smith and Wong also contacted town and community leaders to tell them about the decision, they said.
“I think this is happening in companies and to families all over the country,” said Town Councilwoman Sally Sparhawk. “It touches us all when it’s in our own community. A lot of these people in Related are our friends and our neighbors.
They’re hardworking members of our community.”
But Councilman Arnie Mordkin, a mayoral candidate, suggested the delay wouldn’t make a huge dent in the progress at Base Village and noted that it was important not to panic.
“Let’s not do the Chicken Little thing because the sky is not falling yet,” he said.
Mordkin also stressed the importance of not letting Tuesday’s news influence the Town Council’s decisions about the next phases.
“That’s the biggest danger,” he said.
He said that he was worried about any tendencies to grant something to the developer that the council might ordinarily not grant.
“This [credit crunch] is a temporary thing, as far as I’m concerned, for Base Village,” he said. “But whatever they build is permanent.”
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