Breckenridge rejects luxury-hotel deal at base of Peak 8
February 27, 2018
Breckenridge Town Council rejected a proposal Tuesday night that would have allowed developers to proceed with plans to build a branded, four-star luxury hotel at the base of Peak 8 at Breckenridge Ski Resort.
Council's biggest problem with the proposal, framed in a possible development agreement with the town, hinged on an unprecedented ask to move $5.2 million worth of transferable density rights off open-space land and onto the parcel at the base of Peak 8.
Council had problems gauging how a project of such magnitude might exacerbate the town's already strained infrastructure, including the effect the hotel's employees and guests could have on traffic, parking and housing, all of which have been hammered by recent growth.
Another concern was the landowner, Vail Resorts.
The project was set for 1599 Ski Hill Road, where the Breckenridge Ski Resort Administration Building currently sits next to One Ski Hill Place, on land currently owned by Vail Resorts, which also owns Breckenridge Ski Resort.
In the deal, Vail Resorts would have sold the parcel to a two-pronged development team but managed the hotel through its subsidiary, RockResorts, once built.
Because Vail Resorts also owns parking lots in town with unused density attached to them, Breckenridge Mayor Eric Mamula had asked the development team, a joint venture between Breckenridge Grand Vacations and the Miami-based firm Lionheart Capital, to see if Vail Resorts would agree to move density rights from those lots to the base of Peak 8 to make the deal work.
The additional density would be needed to accommodate 110,000 square feet of wholly owned condos. Without them, the 150-room luxury hotel project was not financially viable, developers have told council.
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On Tuesday, the developers informed council that Vail Resorts was not agreeable to shifting the density. When the time came to make a motion so council could vote on the proposed development agreement, no one did.
Instead, the elected officials took turns explaining why they couldn't support the project. Without a motion, the proposal failed.
THREE DOORS, NO DEAL
The development team and town council went back and forth for months. Developers gave council its first look at a possible development agreement during an informal hearing Nov. 14.
Tuesday's final push, led by BGV's chief operating officer Nick Doran, began with him retracing their steps to this point. They've made multiple concessions and fulfilled numerous requests from the town, he said, including undergoing a "fit test," which came back largely in favor of the developers' proposal.
Trying to gain council's support, Doran painted it as the best of three options for the town, which he called "doors," a play on the once-popular game show "Let's Make a Deal."
Behind door No. 1, was "the known," Doran said, a development agreement with BGV, a local company that has a long history of working on large-scale projects in Breckenridge.
Going with the development agreement, he said, would ensure the hotel project more than met town code in many ways, including keeping down the building height, increasing setbacks, breaking up the hotel and condos into multiple structures, including a workforce-housing component and providing more parking than what's normally required, among others.
Previously, the developers had sought a slight reduction in the number of parking spaces for the project, but that request was pulled before Tuesday's hearing to make the agreement more palatable.
On the other side of the equation were Doran's doors Nos. 2 and 3, based on the assumption that someone else would develop the parcel, either with condos and a hotel or just a hotel. Doran said they don't believe a singular hotel is feasible, but perhaps someone might come in and build one below a four-star level.
Under either one of those two scenarios, he warned, the project would have similar or greater impacts than the proposal on the table, but wouldn't be nearly as beneficial for the town as what BGV and Lionheart Capital had put together.
"You guys walk away from this, you're walking away from nearly $5.25 million that is going to the Open Space fund," he pushed as he spoke to one aspect of the deal. "In the other two scenarios, there's nothing there, again because they're not working through the development agreement process. We've checked all the boxes. You guys know exactly what you're getting with us."
At its Jan. 23 meeting, council presented 10 questions to the developers while stalling out the proposal.
One of those sought to gauge how willing Vail Resorts would be to shifting unused density off its gondola parking lots for the project.
"At this point in time, Vail Resorts desires to retain the density currently existing on the gondola lots," states the developers' response included in the town council packet.
Councilwoman Elisabeth Lawrence expressed more support for the project than any other elected official did Tuesday night, saying she does see a need for a four-star hotel in Breckenridge and thinks the base of Peak 8 could be a good place for it.
Still, she couldn't back the development agreement as presented.
"It's difficult because both the seller and the operator — that's not the developer, you guys are in the middle here — but the seller and the operator has available density to transfer, so I don't know how we, with good conscience and our pressured infrastructure right now, can give more density when the seller and operator has that density to transfer," she said. "I feel like that would be shortsighted on the town's part."
When Mayor Mamula opened the floor for public comments, five people expressed concerns or spoke out directly against the project Tuesday, though most were highly complimentary of BGV's role in the community. A few others wrote letters.
"Like everyone else, I really appreciated what BGV means to this community and the role that BGV takes," said Councilwoman Wendy Wolfe, echoing statements of other elected officials and people in the town. "If anyone was going to develop anything up there, I would wholeheartedly support it being Breckenridge Grand Vacations."
Still, she saw the development agreement as "an unprecedented ask" that deserved "an unprecedented amount of scrutiny from our community."
For Wolfe, she just couldn't support the proposal given the current condition of Ski Hill Road and how the additional trips up and down it might affect that already taxed stretch.
Meanwhile, the mayor was perhaps the most critical of the ski resort's refusal to move the density.
"In the end, this is (Vail Resorts') land that you're going to develop for them to use," he told the developers. "This new technique of selling off property and then requiring the developer of that property to go out to the bank and buy additional density — so that remaining density gets concentrated on the property that remains in their hands — I do not support," he said. "In the end, that's my biggest gripe."
Councilman Mark Burke did not attend the meeting, and Councilman Mike Dudick, who's the co-owner and CEO of BGV, recused himself from the discussions.
Reached over the phone Wednesday, Dudick didn't want to comment on the future of the proposal or where his company might go from here.
"The result of last evening was unexpected for BGV," he said before declining to take further questions.
According to town staff, there is no specific timeframe preventing the developers from bringing back a proposal when a motion fails.