Massive makeover to raise a new Vail
Publication: DenverPost.Com; Date:
06/20/2004
By Jason Blevins
42-year-old resort takes first
steps in $1 billion renovation A joint effort among
the town, developers and Vail Resorts aims to secure
the ski area as the most popular in the nation.
Vail - A dump truck crawls down the
pedestrian mall outside John Kaemmer's toy store,
making the delicate dolls on the shop's shelves tremble.
 |
Post
/ Jerry Cleveland
Summer visitors can walk around Vail Village,
but traffic is restricted as a major reconstruction
effort gets underway. The town of Vail, private
developers and Vail Resorts Inc., operator
of the Vail and Beaver Creek ski slopes, are
cooperating on the projects. |
Kaemmer, who this summer celebrates
25 years working in Vail Village, doesn't flinch.
In fact, he could not be happier with the diesel-belching
behemoth a few feet from his shop window.
"We are ready," he says. "We need
this urban renewal. Vail was getting a bit worn. We
have the best ski area in North America, and our village
needs to keep up with that."
The town of Vail has a new theme song
this summer: a cacophony of growling, beeping backhoes,
bulldozers, cranes and dump trucks. Private developers,
the town and Vail Resorts Inc. all are working in
a massive $1 billion renovation of the 42-year-old
resort.
In the next three years, the three
will launch dozens of projects aimed at transforming
the ski town into an amenity-laden luxury village.
Parking will go underground, and clubs, lodges and
homes will sprout from today's lots.
It is unquestionably the most aggressive
development effort in the valley's history. Local
leaders hope that when the final nail is hammered
sometime around 2010, Vail will secure its reign as
the most popular ski resort in the country. In 12
of 16 annual Ski Magazine rankings, Vail Mountain
has won top honors.
"I think this has to be done," says
Eagle County Commissioner Arn Menconi. "It's really
needed. Guests today are not necessarily skiing as
much on their vacations, and they want other activities
around town."
New Lionshead
The architect of the so-called Vail
renaissance is publicly traded Vail Resorts, the owner
and operator of the Vail and Beaver Creek ski areas
in Eagle County and the Breckenridge and Keystone
areas in Summit County, with $710 million a year in
sales.
For 10 years the company has pined
for a new Lionshead Village, the blocky, concrete
cousin of the alluring, faux-European Vail Village
to the east. Last month, the company began a four-year,
$480 million effort to revitalize the 34-year-old
Lionshead, which sprang from an embarrassing hiccup
in architectural history in 1970 that featured quick
construction, lots of concrete and view-blocking buildings.
"If we could only get a time machine,
we might not have to do all this," said Jack Hunn,
vice president of development for Vail Resorts Development
Co., the real estate development arm of the ski company.
Lacking a time machine, Vail Resorts
next summer plans to level two giant buildings it
owns in Lionshead: an old, three-story gondola building
and the older Sunbird Lodge, which is now used for
company offices and employee housing.
In their place, the company will erect
a pedestrian plaza, surrounded by an outdoor ice rink,
restaurants, shops and a 162-unit luxury hotel. A
portion of the hotel's rooms will be sold as high-end
condos.
This year, the company is replacing
the venerable bridge that ferried skiers across Gore
Creek and into Lionshead Village. Above the bridge,
on the long-fallow site of a snowmaking shack and
five tennis courts, the company is developing four
home sites, which have each sold for $10.5 million.
Just west of Lionshead, more tractors
churn dirt in a parking lot long used for Vail Resorts
employee parking. That lot will become 16 high-end
condo residences, which will be offered for sale this
month at prices ranging from $3 million to $4 million.
The parking structure next door, which Vail Resorts
acquired when it bought the Vail Marriott for $49.5
million in 2001, will become another hotel, with some
units offered for fractional ownership. An operator
for that hotel has not been named.
Vail Resorts owns only a portion of
Lionshead. The company hopes to persuade other building
and land owners to follow its lead. The company is
providing its architectural consultants to owners
mulling a renovation that could complement the hotel
and plaza.
"I actually think there is a business
opportunity for Vail Resorts to go into partnerships
and redevelop those buildings with their owners and
homeowner associations," Vail Resorts chairman and
chief executive Adam Aron said in a conference call
with analysts last week.
Rob LeVine, general manager of the
Antlers at Vail, beat Vail Resorts to the punch. He
oversaw a $20 million renovation of the privately
owned, 92-room Lionshead Village lodge in 2001.
"Each new project makes the next one
easier," said LeVine, who begins a $2 million pool-
area renovation this summer.
"Front Door" sprucing
In Vail Village to the east, the ski
resort company is planning another overhaul, albeit
more modestly priced at around $100 million. The area
is dubbed Vail's "Front Door."
The company is burying hundreds of
parking spaces and wants to resculpt a couple of acres
where the mountain and town meet. The project hinges
on the company's ability to negotiate a complex land
swap with the Forest Service.
The plan includes shifting the Vistabahn
chairlift, building a 30,000-square-foot skier services
facility, developing a new 5,000-square-foot exclusive
club, renovating the company's Lodge at Vail and developing
13 fractional-ownership units. More than two-thirds
of the project will be underground.
On the east end of Vail Village, a
block away from the gondola, the company is digging
a gigantic hole on the site of a 20-spot parking lot.
In the 40-foot hole, the company is burying 109 parking
spaces. All have sold for at least $100,000 each.
Vail Resorts will finance most of
the construction by reselling time-share units, home
sites, parking spaces and club memberships. This method
limits the company's risk and has been honed by Vail
Resorts' chief rival, Intrawest Corp., which pre-sells
at least 50 percent of any project before ground is
broken. Beyond pre-sale construction financing, the
company expects to finance its larger projects with
project-specific private loans.
Jeff Jones, the company's chief financial
officer, said the staged revenue and pre-sales from
the projects will boost the company's cash flow enough
to push its debt-to-cash-flow ratio down throughout
the five-year building spree.
"Our financing depends on our ability
to pre-sell," Hunn says. "The demand here is incredibly
strong. I think the pent-up demand for new product
in Vail is significant."
Six hotels renovating
The ski company has company in its
efforts to revitalize the aging Vail Village. At least
six hotels are adding rooms, renovating or leveling
buildings and starting fresh.
The venerable Tivoli Lodge has been
razed. It will be replaced with a new 61-unit Tivoli.
The 59-room Swiss Haus will be gone by mid-July. In
its stead, the Vail-based Sonnenalp hotel company
and an Arizona developer are building 23 units, 13
of which will be sold as fractional units to a total
of 107 owners, and 5,000 square feet of retail, all
called One Willow Place.
A New York developer is eyeing the
village's Crossroads Mall for renovation. An estimated
270,000 square feet of new residential development
and 70,000 square feet of retail are planned for Crossroads.
Four Seasons wants to develop 159 new units at the
old Chateau at Vail in the village. The Vail Mountain
Lodge is adding 20 more units. A new employee housing
facility with 142 rental units is under construction.
By 2008 or sooner, Vail could see
more than 1,000 new residential and hotel units. The
flood of new residential units on the Vail market
could attract buyers who have spent the past decade
flocking down the valley to new homes and condos in
Bachelor Gulch, Beaver Creek, Arrowhead and Edwards.
"There will be a huge new surge of
people coming back to Vail," said Joni White-Taylor,
a local Realtor. "Everyone has left because there
has not been any new homes here in years."
The town is jumping into the makeover,
too, with a list of projects and public improvements
worth $60 million.
"I hope all this changes the whole
mentality here in Vail," says Ernst Larese, owner
of the 34-year-old Swiss Hot Dog Company in Lionshead,
who moved to Vail in the late 1960s. "I think the
town has lost its ambience. Ambience is 55 percent
art and 45 percent business. We need to grow our art,
and business will follow."
Staff writer Jason Blevins can be
reached at 303-820-1374 or jblevins@denverpost.com.
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