Breckenridge gets first look at possible four-star hotel deal | SummitDaily.com

Breckenridge gets first look at possible four-star hotel deal

Adjacent to One Ski Hill Place at the base Breckenridge Ski Resort, Vail Resorts’ administration building overlooks Ski Hill Road in Breckenridge. The building could be demolished to make room for a new luxury hotel, built in a partnership between Breckenridge Grand Vacations and the Miami-based real estate development firm Lionheart Capital.

Elected officials didn't slam the door on a proposed 150-key, four-star hotel at the base of Peak 8 in Breckenridge, but after hearing preliminary details surrounding the project, they didn't exactly roll out a red carpet, either.

The hotel, which it turns out would come with 50-60 wholly owned residential condos, cropped up at the end of Tuesday's town council work session, as representatives of Breckenridge Grand Vacations offered council a slideshow presentation.

The timeshare company is one leg of a three-pronged development agreement between Breckenridge Grand Vacations, the Miami-based real estate development firm Lionheart Capital and Vail Resorts.

BGV chief operating officer Nick Doran explained the agreement to council, saying Lionheart Capital has the cash on hand and experience building luxury hotels in resort markets to see a large-scale project like this through, while Vail Resorts owns the land and BGV brings longstanding community relationships and a wealth of local know-how to the table.

With development agreements, council also has the authority to negotiate for a “public benefit” component of a proposed project, and the hotel’s developers floated a $50,000 donation toward the preservation of Cucumber Gulch on Tuesday...

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Additionally, because BGV will continue building on the Grand Colorado on Peak 8, foreseeably for the next three to four years, it presents an opportunity to piggyback some aspects of hotel construction with BGV's ongoing work at the Grand Colorado, which is just down Ski Hill Road from the location of the proposed hotel.

The contract with Vail Resorts stipulates Lionheart Capital and BGV would decide the sales team for the condos, and Vail Resorts' subsidiary, RockResorts, would manage the hotel, Doran said.

That revelation came as a surprise to Councilwoman Elisabeth Lawrence, who wanted to know how many new jobs the hotel could bring to Breckenridge, but was disappointed to learn BGV wouldn't be the managing the property.

It should be noted that Tuesday's presentation was purely informational, and no action was taken.

As promised, Councilman Mike Dudick, who's also co-owner and CEO of Breckenridge Grand Vacations, recused himself from the discussions, standing up from his seat and leaving council chambers before the presentation.

For the remaining council members, the initial meeting was important so they could get an idea of the project, how it might fit into its surroundings and what might need to happen on the town's end to make it work.

For the developers, they were trying to gauge how willing council might be to relax some provisions in town code that they say will be necessary to make the luxury hotel project viable.

"Based upon how this discussion goes, (the developers) may or may not decide to file a real application," town staff told council. "If they file the real application, you'll be back with a draft development agreement to look at, that you can then decide how you want to handle it, so this is a little bit unusual."

According to Doran, the hotel would be a branded, four-star hotel — think something like The Ritz-Carlton, JW Marriott or Hilton — and unlike anything that currently exists in Breckenridge.

There would be approximately 150 keys with the possibility that number could rise as high as 200, depending on how many condo owners want to participate in the hotel's rental program.

Doran emphasized the condos won't be timeshares, like other BGV properties are, and said the project doesn't work financially without a little over 100,000 square feet of residential condos, which won't happen without some additional density being added onto the roughly 2.75-acre parcel next door to One Ski Hill Place on Peak 8.

In Breckenridge, any given piece of property is zoned for a certain level of density, but a developer can request additional density, approved by town council or the town's planning commission, as long as that density comes from somewhere else in the basin.

That has the hotel developers looking to buy 58 individual transferrable density rights — or TDRs — from a pool of unused TDRs held by the town and county.

The going rate for each TDR can fluctuate year to year based on the set formula that dictates the price, said a town planner, but TDRs currently cost $47,800 apiece.

That means the developers will need about $2.9 million worth of additional TDRs to build the desired hotel and condo units.

During their presentation, the developers incorrectly labeled the payment a "contribution" to the town's and county's open space funds, a mistake Breckenridge Mayor Eric Mamula was quick to correct.

"I would like to just change one part of your verbiage here," the mayor told the developers. "This is not a contribution — this is what it costs you to buy this density. … Scratch off 'contribution' next time you bring these slides to us."

Developers are also hoping to only build 0.85 parking spaces per unit, a 15 percent reduction from the town's one-to-one requirement. The request was similar to one council approved in 2014 for the Marriott Residence Inn, but as council members noted, the Marriot didn't come with any residential condos tied to it.

In requesting to go under the minimum number of required parking spaces, developers are proposing to commission a third-party traffic study to accurately illustrate how the lower number of spaces might affect the town and surrounding area.

With development agreements, council also has the authority to negotiate for a "public benefit" component of a proposed project, and the hotel's developers floated a $50,000 donation toward the preservation of Cucumber Gulch on Tuesday, a move based on requests previously submitted by BGV for other developers.

Council seemed willing to entertain the requests for added density and were more agreeable for having fewer parking spaces per hotel room, but seemed less willing to go that low for the condos.

For all five remaining council members and the mayor, however, the $50,000 public benefit was far too low.

"The $50,000, I will tell you guys, it's a bit laughable," Mamula said as he echoed other council members' statements after explaining he's not opposed to moving the TDRs as long as "it fits — and it has got to fit."

If it doesn't fit, Mamula said, the hotel won't get the density.

He also urged the developers to consider the tight labor market and where the hotel's employees might live going forward.