Aspen Skiing Co., partners under contract to buy Base Village
September 20, 2016
It's back to the future for Aspen Skiing Co. and East West Partners at Snowmass Base Village.
Skico, East West Partners and private equity firm KSL Capital Partners LLC announced Tuesday that they have formed a joint venture and have a contract to buy the entire Base Village project from Snowmass Acquisition Co., an affiliate of Related Cos. The sale is expected to be completed "by the end of 2016," the buyers said in a statement. The purchase price wasn't disclosed.
"The acquisition includes all remaining development parcels, all commercial spaces in Base Village, the Snowmass Hospitality property-management company and the Viceroy Hotel, including the unsold condominium units within the hotel," said the statement by Skico, East West Partners and KSL.
TOUGH GOING IN THE VILLAGE
Aspen Skiing Co. bought 500 acres at the base of Snowmass Ski Area in 1999. A wholly owned Skico subsidiary called Brush Creek Land Co. formed a partnership with Intrawest Corp. in 2001, and they earned land-use approvals from Snowmass Village in 2004.
The partnership started development of the village in 2005-06 and then sold to Related WestPac in 2007.
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The Great Recession stopped Related WestPac dead in its tracks after development of the Viceroy. It lost the property in foreclosure but then later reacquired it. The Snowmass Village Town Council granted approvals for a reworked project this week.
Aspen Skiing Co. Vice President of Hospitality Don Schuster said Skico is eager to get re-engaged with the project with a partner as accomplished in ski-area development as East West Partners.
"We need to make something happen at the base of Snowmass," Schuster said. "It's our biggest mountain."
Skico President and CEO Mike Kaplan told an audience in Snowmass Village in July that it's easy to look back now and say Skico should have stayed involved to see the Base Village project completed. However, he noted it couldn't have completed the new chairlifts and other on-mountain improvements as quickly as it did if it also were trying to develop Base Village. Skico says it has made $100 million worth of on-mountain improvements at Snowmass over the past 10 years.
PLEASED WITH ANY PROGRESS
Not surprisingly, some folks in Snowmass are excited at the prospect of any forward motion on the massive development, which after 11 years is about one-third of the way complete.
"We are optimistic that this joint venture will bring renewed focus and commitment to completing Base Village," said Rose Abello, director of Snowmass Tourism.
Reed Lewis, a Snowmass business owner and former town councilman, said that he thinks the Base Village acquisition is a step in the right direction for everyone in Snowmass.
"We've all been waiting and waiting, and now even if it's more waiting, at least there's some hope that it's actually going forward," Lewis said. "Related has been stagnant for a very long time. Seeing some new energy involved can only be a good thing."
Lewis was quick to note that he doesn't think anyone in Snowmass is holding their breath.
"I think at this point, people will believe it when we actually see stuff happening," he said.
Snowmass Village Councilman Tom Goode said he is relived to see that "the hard work that the Planning Commission and council did to get Ordinance 9 passed (on Dec. 21) has been worthwhile."
"I'm pleased that agreements have been progressing for the community, and I'm happy for the community," he said.
Goode seemed more optimistic in looking ahead at the project's next phase of development.
"Will we have a crane on the hill next April?" he said. "That's what I'm hoping for. I'm hoping we'll have a couple cranes on the hill next April and we'll see some progress happening by next summer. And the community can finally see Base Village moving forward."
BACK IN THE LIMELIGHT
The plan is to start construction on the Limelight Snowmass at the end of the ski season in 2017, Schuster said. It has approvals for 102 rooms and 15 residences in the building.
"Aspen Skiing Co. will purchase the Limelight Hotel and Four Mountain Sports space from the joint venture when they are complete and continues to be committed to operating both," said the statement by Skico and East West.
The buyers' statement said the plan is also to start construction of the events plaza and ice rink in the spring of 2017 as well as Building 4.
Construction of the community-amenities building and buildings 7 and 8 is projected to occur later in 2017.
DeJa VU FOR EAST WEST
This isn't the first time Vail-based East West and KSL Capital were interested in Base Village. They signed a letter of intent to buy the stalled project last fall, but negotiations ceased before the end of the year, in part because of uncertainties over the approvals.
East West Partners will be responsible for all day-to-day operations. Andy Gunion will lead the joint venture. He and his wife will move to the Roaring Fork Valley. He has been with East West Partners for 12 years and led efforts to acquire Base Village, according to the statement from the buyers.
East West Partners was formed in 1986 when it purchased land at the emerging resort of Beaver Creek. It has developed more than 60 projects with more than $3 billion in residential and commercial real estate components. It works on resort and urban projects.
KSL is a private equity firm that specializes in travel and leisure enterprises.