St. Regis plan wins OK from City Council
Aspen Times Staff Writer
Owners of the St. Regis-Aspen will pay $449,552 to the city to offset the anticipated loss in tax revenues when they convert 98 of the hotel’s rooms into timeshare units.
The payment was the one unresolved aspect of the luxury hotel’s application to convert some of its accommodations into 24 timeshare units and create a new spa within the facility.
The City Council accepted the fee and unanimously approved the development application on Monday. The sum will be paid within a year, in quarterly installments, after construction begins.
The fee was arrived at through a complex formula that is part of Aspen’s new timeshare regulations, adopted last fall, according to Paul Menter, city finance director.
It was not the subject of negotiations with the St. Regis and its owner, Starwood Hotels and Resorts Worldwide, but rather was a matter of calculating a sum using the established formula, he said.
“This is kind of new territory for the city,” Menter said. “We had some lively discussions about the law and how you apply it.”
The code requires an applicant to calculate the tax impact of a conversion of hotel accommodations to timeshare or fractional-ownership units over time. A development gets no credit for increasing tax collections in one area to offset the loss of taxes in another, since the city’s various taxes are dedicated to different purposes, Menter explained.
The $449,552 reflects lost revenue from lodging and sales tax, as well as the conversion’s impact on property tax collections.
While the new fractional suites, to be sold to buyers in one-eleventh shares, will generate an estimated $1.1 million in additional real estate transfer taxes, fractional-ownership units aren’t expected to produce the sales and lodging taxes that 98 standard hotel rooms would generate.
Starwood Hotels and Resorts Worldwide plans to create a new 15,300-square-foot spa in the St. Regis, Aspen’s largest hotel, to replace its existing 4,800-square-foot spa.
In addition, 98 hotel rooms will be converted into 24 timeshare units and one residential unit, while unfinished space elsewhere in the hotel will be developed as 20 new, standard hotel rooms.
The roughly $30 million project has been proposed to make the St. Regis competitive with luxury hotels in other resort markets, according to Richard McLennan, St. Regis general manager.
In a presentation to the council last month, he said the St. Regis failed to lure about $3.4 million in business to the hotel last year, largely because it does not offer a world-class spa.
[Janet Urquhart’s e-mail address is email@example.com]