VAIL, Colo. – Vail proper is mostly built out, but redevelopment is in full force. Some $1 billion has been logged in the last five years, mostly at the base of the ski area on Vail Mountain, with $2 billion more in the development pipeline.
But the slowed economy is also slowing, although not yet stopping, those new projects, reports the Vail Daily.
One project, the Roost Lodge, a low-cost relic of the late 1960s, is slated to become a condo-hotel operated by Marriott. Lack of sales, however, has delayed construction, scheduled to start this spring, for at least a year.
Another project, Cascade Residences, has only a 50-50 chance of starting construction this year, as the last sale necessary for the work to go-ahead is now being wrapped up.
Vail Resorts, the ski area operator, has also pushed back the projected construction start for its $1 billion Ever Vail to the winter of 2009-2010. Rob Katz, the chief executive officer told the newspaper that buyers of luxury real estate offered by his company are “somewhat” insulated from the country’s economic downturn, and he expects a rebound within a year or two.
“Buyers are taking their time and being picky,” he said. “But plenty of people are still buying real estate.”
Sales statistics compiled for the Eagle Valley and Vail say the same thing. Sales through March were down 42 per cent compared to last year, but average sales prices were up 40 per cent.
Projects coming through the pipeline in future years, however, will face new rules for employee housing. Rules adopted by the town last year require 10 per cent of new residential projects be set aside for employees. A new law being adopted by the town goes on to mandate that one-half of that requirement be met with on-site housing.
That will cut profit margins, but some of the large projects of the last decade had begun to do so anyway. Ever Vail, for example, planned to integrate 123 employee housing units into its base-area project.
Layoffs at Mammoth
MAMMOTH LAKES, Calif. – Mammoth Mountain has laid off 15 year-round employees, most of them in middle management. They collectively were paid about $1 million in salaries and benefits and were about 5 per cent of the year-round workforce, reports The Sheet.
“The company is stable,” said Rusty Gregory, the chief executive officer at Mammoth Mountain Ski Area, “but the current credit environment is difficult, and we need to be in a position to service our credit line.” He added: “Demand for our products and services is down, and looks like it will be down for the foreseeable future.”