Aspen Skiing Co. to buy the Limelight Lodge
ASPEN – The Aspen Skiing Co. this week signed a contract to purchase the Limelight Lodge from its longtime owners, the Paas and Woolery families.
The announcement was made Tuesday. The sale is scheduled to close in March, and the Skico will assume daily operations at that time.
Neither party would disclose the purchase price of the 126-room hotel or the land it sits on. According to the Pitkin County Assessor’s Office, the property has an actual value of nearly $50.7 million.
Dale Paas, owner of the Limelight Lodge, told The Aspen Times in late December that the hotel was having financial difficulty and he was looking to infuse more capital into the operation. At the time, Paas said the last resort would be to sell the property and he was hoping to find a partner to invest capital or secure more financing.
“It’s with sincere regret that we had to do this,” Paas said Tuesday. “I don’t know whether I want to cry, throw up or celebrate.”
Paas said debt on the property has been mounting, and the cost of doing business has been rising. That’s coupled with the recession and the fact that two of the 14 condos at the adjacent Monarch on the Park haven’t sold. The proceeds from the sales of the condos were designed to pay for the debt on the 100,000-square-foot hotel.
Paas said his company will retain ownership of those condos, which are still on the market and have the potential to generate an estimated $16 million.
Paas said he hopes that the sale of the Limelight will cover the majority of the operation’s debt. He added that the timing of the newly built hotel and the economic downturn is unfortunate.
“It was our dream to keep the Limelight in our family forever; however, the timing of our rebuild and the difficult economy has forced us to seek other alternatives,” Paas said in a prepared statement.
Mayor Mick Ireland said he had heard rumors that the property was up for sale or under contract, fearing that the rental rooms would eventually get condominiumized so that each room was individually owned.
Ireland said Skico CEO Mike Kaplan called him early Tuesday morning to inform him of the pending sale and the company’s intentions.
“I’m glad they bought the Limelight because they won’t condominiumize it,” he said. “Cold beds wouldn’t be good for them.”
Kaplan said the Skico intends to keep the Limelight a hotel with moderately priced rooms – a sector of the lodging inventory that has shrunk in recent years as affordable lodges have disappeared.
“We believe that tourist beds remain critical to maintaining and enhancing the vibrancy of this valley,” Kaplan said in a prepared statement.
On Tuesday, Kaplan elaborated. He said having midpriced hotel rooms is paramount to a successful ski resort.
“Hot bed base is key to our business and the valley’s economy,” he said, adding the Skico had been looking at other hotel opportunities outside of the valley as an investment. “We started looking around our own neighborhood, and then this opportunity came up.”
Paas said he had discussions with the Skico a “long time ago” about being financially involved in the Limelight, but more serious negotiations about purchasing it only happened in the past seven or eight days.
He added that the Skico approached him after an article appeared Dec. 22 in The Times, which chronicled the Limelight’s financial plight.
Kaplan said Limelight owners approached the Skico six or seven months ago about a possible purchase. But that conversation went dormant until recently, when Skico representatives struck up negotiations with Paas and his business partners.
Paas said he believes the Skico is the best owner and operator to continue his family’s business.
“We think Skico and the Crown family (Skico’s owners) are the ideal group to carry on the Limelight legacy,” he said. “We feel the Skico has the community’s best interests at heart … it’s evident that they aren’t looking for a quick profit.”
The Limelight is attractive to the Skico because it’s newly built, well-designed, has limited services outside of the hotel operation and is in a great location, Kaplan said.
He added that the Skico recognizes its investment won’t pay off right away by renting rooms at a price point lower than many other downtown properties, but said the company is looking at the long term.
“We’re making this investment so we can operate the hotel and drive visitation to the resort,” he said. “It’s a good niche and is in the middle of the price spectrum.”
The Paas family will stay involved and take an active role in running the hotel. Skico and Limelight owners are currently negotiating whether the hotel’s 35 employees, including longtime workers and family members, will be the “right fit” for the operation, Paas said.
Kaplan said the hotel’s operation, including its free continental breakfast and apres ski offerings, as well as the staff, will be examined during the due-diligence period. Whether the Skico decides to keep any or all of the current offerings and staff has not yet been determined.
The Skico’s hospitality division, led by Senior Vice President Paul Cherrett, will manage the property.
Ownership of the Limelight is a departure from the other, high-end lodging that the Skico owns. Skico’s hospitality division currently manages The Little Nell hotel and The Residences at The Little Nell, both at the base of Aspen Mountain, and the Snowmass Club.
The lodge is located at 355 S. Monarch St. It offers accommodations ranging from standard rooms to two-bedroom, two-bathroom suites with kitchens, fireplaces and balconies. The hotel has 1,800 square feet of meeting/conference space, as well as several outdoor spaces that are available for events.
The lodge – which cost tens of millions of dollars to build – was approved in 2006 after years of review and controversy in the community over its size and impacts to downtown.
Paas told The Aspen Times in October 2008 that he and his family liquidated most of what they owned and financed the rest to pay for the new hotel. He said at the time that it might take 10 years to pay off the hotel and get the business to break even.
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Eagle County will go to Stage 2 fire restrictions Friday, joining Pitkin County and other state and federal lands in the area.