Triple threat: Centurion Partners

Aspen’s ongoing hotel renaissance is bringing a very visible transformation to the resort, much of it from a relatively invisible source – a trio of businessmen known collectively as Centurion Partners.The California-based company has ties to both Aspen’s future and its past. Two of its partners are behind the largest of the resort’s new hotel projects, while the third helped make Aspen’s largest hotel a reality more than a decade ago.Few Aspenites are familiar with the names of Scot Matteson and Michael Smith, but the names of their projects – Lodge at Aspen Mountain and the Residences at The Little Nell among them – likely ring a bell. So does the name of their local partner: John Sarpa.Matteson and Smith, based out of Centurion headquarters in Newport Beach, Calif., brought Sarpa into the fold about a year ago. A longtime local developer who also chairs the Aspen Valley Hospital board of directors, Sarpa is the familiar face of a partnership that is bullish on Aspen. The trio recently sat down to discuss their interests in the resort, both figuratively and literally.The three partners estimate they have $30 million in private funds – including their own – and up to another $60 million from their banking partners invested in Aspen development opportunities. Goldman Sachs, a New York-based investment banking, securities and investment management firm that is helping finance Centurion’s local projects, has committed another $50 million to the partnership, according to Matteson.Aside from the two hotel projects, Centurion is pursuing a development of three spec homes, a single-family residence and a duplex, at Gibson and South avenues, and an employee housing project at the base of Smuggler Mountain associated with the Lodge at Aspen Mountain.And there are another three or four projects in the works, Matteson added.”They’re pretty significant in size,” he said.

Sarpa, heading up the Aspen office, will be the point man for other development opportunities as they arise in Aspen and the Rockies.Smith and Matteson, Centurion’s co-founders, have long taken ski vacations in Aspen. Matteson purchased a home here in the early 1990s.Before they joined forces five years ago, Matteson compiled an extensive résumé in investment banking and development, while Smith pursued a career in commercial and industrial development.Sarpa, meanwhile, was managing director of Snowmass Land Co., a company with a string of developments to its credit in Snowmass Village and elsewhere in the Roaring Fork Valley. He had previously been involved in the development of the Ritz-Carlton Hotel in Aspen, now the St. Regis, by Savanah Limited Partnership, a group that eventually spun off the old Grand Aspen Hotel property, where another of Aspen’s new luxury hotels, the Hyatt Grand Aspen, recently opened its doors.Centurion, the majority partner in the Residences at The Little Nell, now under construction, and the developer behind the proposed Lodge at Aspen Mountain, didn’t need to look far to find the man to head up its Aspen office and regional operations in the West. At one point, Savanah held the South Aspen Street property that is now slated for the Lodge at Aspen Mountain.”We decided we needed to have a local partner … started talking to people and getting referrals. John’s name kept coming up for some reason,” Matteson said.

Centurion is hardly focused solely on Aspen – its $1.4 billion portfolio includes two high-rise condo towers under way in San Diego and plans to build a residential/golf course resort development in Cancun – but the town has been on the partnership’s radar since Centurion purchased the old Tippler nightclub several years ago with an eye toward following through on the prior owner’s plan to build four townhomes there.”The initial concept was, we would buy it, build four, keep one and sell three,” recalled Smith with a laugh.Before they were through, the developers had amassed 29 separate properties, including the 12 Tipple Inn condos, for a prime development at the base of Aspen Mountain, to the skier’s left of the gondola. Centurion is the majority owner, along with two other partners, in the Residences at The Little Nell, rising up alongside the ski slope. It will contain two residences, eight luxury hotel rooms and 24 suites to be sold in fractional shares.The Residences won’t open until winter 2007-08, but about 40 percent of the fractional shares, each worth six weeks of use, are already spoken for and the project has set new price records in the fractional market. A one-eighth share in the four-bedroom suites is now selling for $2 million, Matteson said.The fractional component in both of Centurion’s local hotel projects is driven both by the consumer – buyers are interested in a piece of Aspen real estate for less than the cost of a mansion that sits empty much of the time – and lenders, who won’t finance a straight hotel project, Matteson said.Centurion’s projects, however, are far from the only fractional ownership opportunities coming into the Aspen market. At some point, Matteson conceded, there will be enough.

“We don’t think it’s getting saturated yet, but it has potential to,” he said.Meanwhile, the demand for Aspen real estate, and the market’s relative stability, is apparently fueling investor confidence.”If the economy goes soft, there still seems to be a group of buyers out there that will invest in this marketplace,” Matteson said. “In other marketplaces, we don’t see that.”Aspen’s reputation both drives the demand for a $380 million project like the Residences and makes it possible, he added.”It’s just the most elite ski resort in North America, in our opinion,” Matteson said.But the resort had another factor working in Centurion’s favor – a shortage of new, high-end accommodations. A ongoing hotel overhaul that extends beyond Centurion’s projects, however, won’t leave Aspen lagging behind for long.”We saw a gap in the marketplace we thought we could fill,” Matteson said. “This resort needed to catch up with the Beaver Creeks, Vails and Deer Valleys of the world.”That’s not to say building a large hotel in Aspen is easy, Sarpa interjected.

“To build a hotel at the base of the mountain is a very expensive proposition,” he said. It can also be controversial.Initial opposition to the Lodge at Aspen Mountain meant multiple revisions to the conceptual designs – even after the developers spent a year working with the neighbors to lessen the project’s impacts on surrounding residences and appease their concerns.Aspen’s lodging upgrades may smack of other ski resorts, but the process of getting there does not, Sarpa said.”How we do it is very different. Aspen’s process forces you to be different,” he said.But working with the community is one of Centurion’s goals, Smith added.”We’re not the California developers coming into Aspen and just trying to redevelop it,” he said. “We care about the town, and we think the right thing is a hotel at the base of the mountain.”Believe me, we try to make money, but it’s not at all costs.”Janet Urquhart’s e-mail address is janet@aspentimes.com