SNOWMASS VILLAGE, Colo. – Stalled development projects,
lagging real estate sales, and brows furrowed over the coming ski season
continue to dominate the news in ski towns.
Double-digit gains in real estate have been replaced by
declines that are just as unrelentingly in double digits. A new Land Title
Guarantee Co. report says sales volume was down 36 per cent for the year
through September in Aspen and surrounding Pitkin County, while dollar volume
plunged 46 per cent.
Construction activity is also being affected by the credit
constriction. In Snowmass Village, real estate developer Related WestPac has
announced that shaky credit has delayed three buildings scheduled for
construction this fall at the $1 billion Base Village project. However, work
will continue on two buildings now under construction.
Financing WestPac’s projects are Hypo Real Estate Holding,
which recently received a $69 billion bailout from the German government, and
Lehman Bros., the U.S. firm that filed for bankruptcy protection in September.
Lehman Bros., the nation’s fourth-largest investment bank, was
also in the news in Telluride, where it was the financier of the swank Capella
Telluride Hotel. The division of Lehman responsible for the financing was
acquired in September by Barclays, the London-based global financial services
However, moving into October, Barclays had not confirmed that
it would extend financing of the hotel. As the general contractor jockeyed to
ensure payments, subcontractors began pulling out. The result, reports the
Telluride Watch, was silence at a work site that before had been a cacophony of
The construction trades returned to the project after about a
week, when the financing extension was confirmed. The hotel, the first North
American operation by Horst Schulze, who previously founded the Ritz-Carlton
chain, is scheduled to open in February.
Lehman Bros. was also involved in financing the Fortress
Investment Group acquisition of Intrawest, the operator of three major resorts
in Colorado plus Whistler-Blackcomb. A $1.7 billion loan due Oct. 23 was
causing apprehension, but the refinancing was accomplished.
Jackson Turner, an analyst with Argus Research, told newspapers
that the debt costs had undoubtedly increased. The result, he suggested, will
be reduced service and restricted capital investments at Intrawest’s various
Intrawest spokesman Ian Galbraith
brushed aside that idea, reports the Steamboat Pilot & Today. Chris
Diamond, president of the Steamboat ski operation, one of the three ski areas
in Colorado operated by Intrawest, dismissed Turner’s comments as “nothing more
than outside speculation.”