Dillon hotel project goes back to drawing board after construction costs setback
Developers working on a hotel proposal in Dillon trimmed and squeezed to get their project in line with height restrictions after the town rejected their pitch early last year.
Now it appears they may have cut a little too much.
Local businessman Danny Eilts and his partners pulled their proposed five-story hotel from the Dillon Town Council’s consideration Tuesday night, saying high construction costs were forcing them to make major changes.
It was a setback for the Crossroads at Lake Dillon, a project billed as a vehicle to remake the entrance to town and jumpstart investment, but developers said it was only temporary. They plan to have a new pitch before council in early March allowing them to get in the ground by the summer.
“I’ve been working on this for five years, and it’s still a great project, but we’re trying to get things right,” Eilts told the council. “So we’re just having some issues here and decided to withdraw from the project and we’ll come back to you with something better.”
A year ago, Eilts pitched a larger, six-story version of the hotel and conference center, but the town council balked at its 90-foot height. The Dillon Planning Commission approved the latest 58-foot iteration after a public hearing in December.
Some residents were still concerned about the size of the building, which they feared would block mountain views and disrupt Dillon’s quiet charm.
John Frew, a Denver developer and partner on the project, tried to address those concerns during a December public hearing, saying hotel projects need high room volumes to be financially viable because 95 percent of their revenues come from room rates.
On Tuesday, Frew told council that at 103 guest rooms, the project wouldn’t bring in enough revenue to cover the estimated building cost of $300,000 per unit.
“We know what we need to do, that’s the good news,” Frew said. “But we did not want to ask you to approve something that we knew we would have to come back and amend. So this is a mid-course correction. It happens.”
The latest proposal called for 103 guest rooms, a conference center, recreation deck, indoor pool and rooftop bar-restaurant. The developers plan to stick with the basic design but will be doing some major retooling to make the numbers work.
“We’re going to downsize some things and make some major changes to the project,” Eilts said, reached by phone Wednesday. “We have a great base and we’re still optimistic that we can get this started by the spring.”
The new plan will need to be approved again by the Planning Commission before advancing to the town council, which could vote on approval as early as March 2.
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