Out of bankruptcy, Snowmass Base Village eyes the future
Its foreclosure firmly in the rearview mirror, Base Village’s owners are taking small steps to restart the dormant project at the base of Snowmass ski area that it reclaimed from bankruptcy in September.
Snowmass Acquisition Co. LLC’s recent application with the town to build the second phase of the Viceroy Hotel signaled the first forward motion on the stalled base-area development in five years. (Related Cos. owns Related Colorado and its collection of real estate assets, including Snowmass Acquisition Co. LLC.)
Fueled with confidence — and cash — from the sale of 49 units between Dec. 2 and today in the Viceroy, Related plans to start work on the second building of luxury condos and an enhanced workout facility by next year.
Dwayne Romero, president of Related Colorado, said the condos in 13A, finally untangled from litigation and bankruptcy, sold for an average of $877 per square foot. That’s a far cry from their pre-recession contract price of $1,725 per square foot but welcome in the current Snowmass Village market.
“One piece of good news leads to the next step,” Romero said.
The 67 ski-in, ski-out units in 13B will rise from a concrete pad, one of several faceless slabs in the Base Village neighborhood that are continuous reminders of the foreclosure.
The minor planned-unit- development amendment that Related is asking for, a mix in the size and makeup of condos in Viceroy’s next phase, actually could amount to a major deal for the town.
“Watching the foreclosure, I don’t think there was great value placed on Base Village other than on the Viceroy,” Town Manager Russ Forrest said. “I don’t think there’s significant value on the unfinished parts because it’s unclear what the developer and the community want.”
Out of balance
Construction on the second phase of the Viceroy is expected to bring residential development more in line with the amount of commercial square footage necessary to make Base Village viable.
“In this pause (since the project stalled), there’s been an imbalance,” said Forrest, who is leaving the town government in August for a position in Gunnison County.
Right now, just 35 to 40 percent of the dwelling units are complete, he said. That compares with “about 50,000 of the 70,000 square feet of commercial” finished space.
Businesses have felt the imbalance; even stalwarts like Sneaky’s, an Aspen Skiing Co. restaurant in business since Base Village’s opening, couldn’t make it.
The Viceroy might take over Sneaky’s space: At press time, Maureen Poschman, who handles marketing for the hotel, said, “There are discussions, but nothing is final.”
First to bail from Base Village was the Sweet Life, an ice-cream parlor/candy store that looked to be the perfect business for a family resort. After three winter seasons, owner Jennifer Hayes closed her doors in the red barn and returned to Telluride.
Among Snowmass’ tri-nodal commercial districts, Base Village finished dead last in sales per square foot, behind both the (newly spiffed-up) Snowmass Center and the Snowmass Mall. Forrest said sales in Base Village were below $200 per square foot, indicating weak performance. Town Finance Director Marianne Rakowski said she couldn’t confirm that figure as the survey still is under way.
Fake buildings/trust issue
While it’s still better than plastic flapping in the breeze, as was true when the project first paused, any temporary comic relief offered by the fake building fronts has lost its appeal. Building 8, once envisioned as the Snowmass Little Nell, is most egregious because of its proximity to the resort’s entrance.
Tim Johnson, a Snowmass Village resident and hotel manager, said he wants the town to demand more accountability from the developer as it returns to the negotiating table.
“I just feel the town has an obligation to stand up to Related or at least request they fix the exterior of that Disneyland-looking plaza and all. What an embarrassing base camp,” Johnson said.
Related has made some circulation and interior changes to the transit center, but it still looks temporary.
These kinds of frustrations might be aired during the planned-unit-development discussions, Mayor Bill Boineau said. In addition to dialogue about roadwork and Snowmass Water and Sanitation District mandates, “We’re going to have to have some larger, more complete discussions of the future of Base Village,” he said.
In the document that the Snowmass Village Planning Commission reviewed last week, the applicant mentioned its interest in reopening certain discussions: “(We) are prepared to have a separate conversation about the phasing of the Brush Creek Road/Wood Road roundabout in connection with a broader discussion about the vesting of the Base Village (planned unit development).”
The first topic that might be tackled is trust.
“They need to redevelop credibility and a relationship in the community. The test will be over the next year,” Forrest said. “If a building starts, how do we guarantee it’s completed?”
Road and roundabout
Before a single new Viceroy unit can be built, Related must fix a sewer that has reached capacity.
The director of water and sanitation, Kit Hamby, estimated the cost of the fix, which the developer would like to make during fall offseason, around $1 million. It involves tearing up Brush Creek Road and replacing water lines.
“(Viceroy Building) 13B definitely affects that section of the sewer line,” Hamby said.
Construction of a roundabout by the gas station, Town Hall and Carriage Way Road was mandated as part of the original Base Village approval, but its timing likely will be a negotiating tool between the town and developer, as will improvements to Wood Road.
The Snowmass Conoco station sits at ground zero of the future roundabout, and owner Jeff Jandegian knows it’s been a messy corner for years. The intersection is really no picnic for the gas-delivery guys.
“It’s scary coming out of the bottom (entrance),” Jandegian said.
Overall, he and co-owner Jeff Head are happier guys these days, finally having bought the ground under which their retro filling station operates for $800,000 from Alpine Bank.
Used as collateral for other Related WestPac purchases, the Conoco was wrapped up in the bankruptcy with so-called “toxic assets” that tangled other longtime business owners, including Mark Moebius, whose parents built some of Snowmass’ original hotels.
What the approval says
Ordinance 21, series of 2004, granted planned-unit-development approval and established zoning-development parameters for the Base Village development. With a 10-year vesting set to expire in November 2014, Base Village could include 1 million square feet of development, including 611 residential units.
Its original phasing was changed to permit the start of the Viceroy and included a public improvement, the bridge above the future roundabout. Within the approval is a gondola to link the Snowmass Center with a landing pad in Base Village, a transportation mitigation that might not ever get built.
Pat Smith, a California developer who brought Related to Snowmass, currently is developing student housing in California and was the impetus behind bringing the Viceory to Snowmass.
He’s not surprised it’s the gem of Base Village.
“We had it right, and the town got their beloved Westin, anyway,” Smith said.
When Aspen Skiing Co. sold the commercial space for $169 million to his Related WestPac partnership in 2007, it retained a few parcels: the three-level Treehouse kids’ center, the ticket office near the gondola and the coveted beachfront property known as the Fanny Hill Townhomes, where as many as 11 units may be built.
Currently the most fake-looking structure in Base Village, Building 8, could have been a Little Nell. Skico let the long-term management license expire, the company’s Don Schuster said.
“Over time, the concept is still correct,” Smith said. “The Nell is a legacy brand, and it defines Aspen/Snowmass as a class destination.”
Skico isn’t sitting by idly even if a Snowmass Nell isn’t in the plans.
“We’re obviously very, very interested in Base Village. We’re continuing to have discussions with Related,” Schuster said.
The Planning Commission also is not sitting idly on the sidelines. During its recent meeting with the developer, member Jim Gustafson reminded Romero that units in the Viceroy always were seen as “hot beds,” without large kitchens that invited holiday sit-down dinners and encouraged eating out.
Romero begged to differ.
“We’re not growing kitchens and living areas at a massive scale. … These are not mini-McMansions,” he said.
Just before review of the original Base Village application, then-Town Manager Gary Suiter was removed from his job by a new Town Council eager to find its guy. Mike Segrest was hired for the job.
Earlier this month, Forrest announced that he was leaving his job as town manager, which opens the possibility that politics could play into the selection of his replacement. Both Segrest and Suiter are among the candidates being talked about for the interim post, sources confirmed.
Newest Councilman Chris Jacobson noted that it’s not just the town manager’s job that will have to be filled but also the public-works director and marketing director.
Two council seats and the mayor’s job are up in 2014, and approaching subsequent applications with a new Town Council “is extremely concerning” said Boineau, who is term-limited.
Watchdog Jeff Tippett, who once led a referendum against the project he believed was at least one-third too big, said there are fewer risks now than during the original, protracted review process.
“I really don’t think we’ll see a do-over on Base Village,” he said. “I suspect Related will submit one building at a time starting with Viceroy Part B.”
Romero said this Base Village restart is actually “one of several steps of a tactical business plan. We’re taking baby steps. Crawl, walk, run.”
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