"VVI’ to remain affordable housing for some | VailDaily.com

"VVI’ to remain affordable housing for some

Geraldine Haldner

With just 10 months remaining on the town’s redevelopment approval permit, the 36-year-old “VVI,” Vail’s first hotel, will continue to be home to local workers paying as little as $300 per room per month as Prado awaits the last of a series of court decisions that have held up his redevelopment plans for two years already.

The Vail Town Council July 2 approved an extension allowing continued use of the hotel for employee housing on a scaled-back basis.

The permit, granted in October of last year, allowed the hotel’s management to rent out 56 hotel rooms for the past ski season. A recent inspection, however, revealed building- and fire-code violations in the hotel’s western wing.

The council approved the use of 26 other units in the hotel for employee housing, with the caveat that as many as 14 more units could be rented out if the violations are addressed.

Connie Dorsey, the building’s general manager, said tenants in the 30 units in Building 5 – above Craig’s Market – were told to vacate at the end of last month. All leases for hotel rooms are month-to-month.

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Vail Fire Marshall Mike McGee said the hotel’s western wing had to be shut down because it would be unsafe to inhabit.

A recent deal between Prado and the owners of Club Chelsea will further keep the maximum occupancy of hotel below the original 56 units, Vail’s director of community development, Russell Forrest, told the council, and the club’s parking demand translates into 16 fewer units available for rent.

Dorsey said there are no plans to rehabilitate the unoccupied wing in the face of impending demolition.

Regardless of the number, the units have been in high demand, Dorsey said.

Back in October, when he took out an advertisement in the Vail Daily, Dorsey was inundated with calls, filling 56 rooms within a matter of days.

“The demand has stayed that way, so we are glad to continue it,” Dorsey said Thursday.

The housing permit will end in May of next year and coincide with the expiration date of the hotel’s redevelopment approval, granted in May 1999.

“They will have to have applied for a construction permit by then,” Forrest said in response to council members’ questions regarding the project’s troubled schedule.

“I think everyone in town is wondering when is it going to happen,” said councilman Greg Moffet.

Prado said Thursday his plans to raze and rebuild the property as the French Wing of the Vail Plaza Inn are still firmly in place – held up only by the last of litigation that has stalled the redevelopment for the last two construction seasons.

Prado dispelled rumors, however, that the lawsuits have hampered his efforts to secure financing for the multi-million dollar project.

“We cannot contract financing with a legal action pending,” he said. “But we have things in place on the financing side (and) once (the litigation) is cleared we are ready to go,” he said.

The council approved a request for a major redevelopment permit for the 36-year-old hotel in May of 2000. But before Prado’s Daymer Corporation could proceed with construction of the 379,000-square-foot hotel the approval was stalled when a neighboring property owner, Charles Lipcon, a Miami Admiralty attorney, filed suit against Daymer and the town.

Lipcon, who until recently owned a penthouse in the Vail Gateway, directly north of the Vail Village Inn, argued that the town and Daymer conspired throughout the approval process failing to give due notice to adjacent property owners. Among the points of contention were slopeside views, which Lipcon argued would be compromised by the development of the new hotel.

An Eagle County jury concluded in January that Lipcon had breached an existing agreement with Daymer to not interfere with the development, awarding Daymer $7.8 million in damages as part of a countersuit.

Lipcon has filed notice with the Colorado Court of Appeals asking for a further review of the ruling later this year. Lipcon has until Aug. 13 to follow up on the notice.

Lipcon could not be reached Friday for comment.

Prado said he isn’t worried about the pending appeal stalling redevelopment plans past the permit’s expiration date.

“We don’t explore that too much yet, because the town understands that this is not our fault. If it comes to that point where we are past the deadline, we will come before the town to address it in some way,” he said. “It is just a matter of recognizing that the clock is not running while this litigation continues.”

Regardless of the Village Inn’s persistent legal woes, Prado said financing is in place to begin redevelopment of the nearby Chateau at Vail – west of the Village Inn – next spring. The 30-year-old hotel, which Prado also plans to demolish, is slated to become the Italian Wing to the Vail Plaza Inn hotel complex with another 116 rooms of luxury accommodations, along with 40 fractional fee units.

The $100 million project has not been the subject of any litigation since it was approved by the town a year ago. Prado said he plans to have the Italian Wing of the Vail Plaza Inn completed by the winter of 2004.

“It will go ahead next spring,” he said. “Everything is in place, the Chateau will move ahead and the VVI site will go, too, depending on what happens with the appeal.”

Geraldine Haldner covers Vail, Minturn and Red Cliff. She can be reached at 949-0555, ext. 602, or at ghaldner@vaildaily.com.

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