Aspen boutique hotel project on ice for now
Site at former Crystal Palace Theatre quiet as owner makes changes
What once was billed as an early fall opening of Aspen’s newest luxury hotel instead resembles an unfinished construction project downtown in the height of summer.
Construction has stopped indefinitely on the raze-and-replacement project at 300 E. Hyman Ave., home of the Crystal Palace Theatre Restaurant from 1957 until 2008. The site was closed July 1 after seeing sparse if any activity during the second half of June.
“The tenant is making some changes to their plans,” said Linda Manning, an Aspen representative for developer Mark Hunt. “They are pretty much some tenant-driven changes that have to be approved by the city.”
By “tenant,” Manning said she was referring to Hunt’s firm, Aspen-based M Properties. The changes eyed for the interior are “minor,” she said, adding they’re “significant enough” that they’ll require the city’s review and approval.
Responding Thursday night by email, Hunt said, “Things should be back up and running shortly.”
Chicago-based Centaur Construction is the general contractor on the 20-room boutique hotel that RH (formerly known as Restoration Hardware) will operate. The lodge will be called RH Guesthouse at the Historic Crystal Palace. Some parts of the old palace building are being preserved, such as the Owl Cigar mural facing Monarch.
Centaur officials weren’t talking this week.
“At the moment, Centaur Construction cannot comment on the Crystal Palace,” said Brad Hirbar, who is both the safety officer and project manager for the redevelopment.
Garrett Larimer, a senior planner with the city, said the project’s building permit remains active and there are no pending applications for project revisions. He added, however, that Hunt’s team has been in verbal contact with the city about potential revisions. The extent of those alterations, beyond that they are for the building’s interior, were unknown to Manning and Larimer, they said.
BendonAdams, the Aspen planning firm navigating the project through the review and approval process, did not respond to a telephone message this week.
Manning said she did not know how the delay will impact the project’s construction timeline or the hotel’s opening date.
A website for the project and its progress last updated visitors about a third-floor concrete pour, scheduled March 30, which was expected to generate heavy truck traffic in the area. That same website — http://crystalpalaceproject.com/ — as of Wednesday had the project’s fourth and final phase slated for completion in August or September.
Meanwhile, RH’s quarterly report for the period ending May 1 said it is partnering with three limited liability companies that “have the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado.”
Those LLCs are controlled by Hunt. RH’s filing also noted the level of its role in the Aspen developments.
“As we do not have a controlling financial interest in the Aspen LLCs but have the ability to exercise significant influence over the Aspen LLCs, we account for these investments using the equity method of accounting.”
Equity method accounting is used by investors that have between 20% and 50% of the voting stock in a company. According to SEC filings, RH’s “equity method investments represent our 50 percent membership interests in three privately-held limited liability companies in Aspen.”
The company also said its investment into Aspen Ecosystem is a high risk/high rewards deal.
“Although our strategy in assuming greater risk and responsibility for real estate, development in certain projects such as the Aspen project is designed to achieve greater financial returns and a higher overall return on investment, we could face increased downside risks if we encounter difficulties in implementing these strategies such as cost overruns or delays in construction,” the form said.
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