Base Village buyout nearly a done deal
December 26, 2006
Aspen, CO ColoradoSNOWMASS VILLAGE Intrawest is out. Pat Smith and The Related Companies are in.The Aspen Skiing Co. has announced a joint venture agreement between Smith’s WestPac and The Related Companies of New York to purchase and develop the residential component of Base Village; Skico will remain as the long-term operator and manager. The deal is expected to close in February.”This is the closure that we’ve been looking forward to since our discussions about Base Village began with Skico last summer,” Smith said. “This takes us one step closer to seeing Snowmass reach its potential. I’ve always said that I think Snowmass is the greatest ski mountain in the country.”With this agreement, Smith adds the bulk of Base Village to his growing local development empire, and he gains a significant financial and operational partner in The Related Companies. In November, Smith closed on the commercial portion of Base Village. Previously, he and financial partners have purchased the Snowmass Center, Offices at Snowmass, the site of the Conoco service station, and he holds an option for a majority of the Snowmass mall area.
In Aspen, Smith is partner in the Residences at The Little Nell, and he recently purchased the Cornerstone Building on Main Street, where he has installed his Aspen office. “We are signing a letter of intent with Pat that makes the deal more firm than the conversations that we’ve had since last summer,” said Skico managing partner Jim Crown. “This agreement is a bulk purchase of units that we always planned on selling one by one. It’s important to emphasize that all of Skico’s planned Base Village assets remain.”The Related Companies President Jeff Blau is no stranger to the area: He said he has been coming here at least since college, and he owns a condominium in Aspen.”We look at this as an incredible opportunity to assist Pat and be part of the redevelopment and growth of Snowmass,” Blau said. “We think we can bring our development expertise to Snowmass and make it better than what was originally planned.”
According to Blau, The Related Companies and WestPac will form a joint company whose day-to-day operations Smith will head. The Related Companies is the nation’s largest privately held development firm, and Base Village would be its first ski resort development. Intrawest’s destination resort properties include Winter Park and Copper Mountain in Colorado; Squaw Valley, Calif.; and Whistler-Blackcomb, British Columbia (the site of the 2010 Winter Olympic Games). Fortress Investment Group, a New York equity company, acquired Intrawest earlier this year, before an announcement last week of Intrawest’s $265 million purchase of the Steamboat ski area.When the residential component closes, WestPac and The Related Companies will be responsible for the overall development of Base Village, including both residential construction marketing and sales and the commercial programming and leasing. The new joint venture must comply with all previous covenants and conditions.The agreement phases Intrawest out of the Base Village project. It also creates an uncertain future for Michael O’Connor, Intrawest’s vice president of development. Though Intrawest is concluding its initial involvement in Base Village, years of construction still remain, and there is the potential that O’Connor, his team and the major subcontractors could remain on the project.
“Until I sit down with Pat Smith, there’s some uncertainty to how we are going to proceed,” O’Connor said. “The one thing that can be said is that the acquisition of Base Village could be beneficial to the overall sequencing and staging of development in Snowmass. I think that’s a good thing.”Controlling all three main commercial hubs in Snowmass gives Smith flexibility that would not exist with three competing companies developing the Snowmass Center, Base Village and the Snowmass Mall area.”This agreement allows us to integrate the entire Base Village, and it will have benefits in commercial planning and construction management,” Smith said.The agreement between Skico, Smith and the Related Companies does not affect any current residential contract purchasers. And, at least at the moment, there are no changes planned in the build-out schedule for Base Village, with the completion still planned for 2011.