After languishing on the market for more than two years, The Peaks sold on Wednesday to a group of local investors for a reported $20 million — less than half the price of bids in late 2007 and some $80 million less than the hotel was built for in the early ‘90s.
The purchase ends failed deal after failed deal: since hitting the market, Telluride’s largest and best-known hotel has seen many a suitor, none of which saw their engagements to the altar.
And now comes the hard part: Making The Peaks the flagship of a region in need of an economic engine.
“Through the years of corporate ownership, The Peaks has distanced itself from the community,” reads a press release from Todd Herrick, a managing member of Peaks Capital Partners, LLC., which bought the hotel from The Blackstone Group, a New York based private equity firm. “The Peaks was designed to be the cornerstone hospitality property of the area. Our objective is to finally unlock the property’s potential…”
Ted and Todd Herrick, Mike Theile, Bruce MacIntire and Kevin Jones make up the buyers, in addition to John Cullen and Brian Martin, two principals of the hotel’s new management company, Grand Heritage Hotels & Resorts.
Grand Heritage Hotels & Resorts manages other seasonal properties, such as the Stanley Hotel in Estes Park.
“We know that The Peaks needs further work — please be patient,” the release reads.
The company plans to update the lobby, bar and dining room by Christmas, but major renovations will not begin until the spring off-season. The Peaks will remain open through the ski season.
“I see a golden opportunity to help drive more business, not only for The Peaks but for the whole region,” said Brent Truax, who was just named the hotel’s general manager. “There is a lot of work to be done. This property has nowhere to go but up.”
Ascendancy to a lofty hotel will have its price, though the new owners have yet to declare how much money they’ll pipe into The Peaks. Upgrades, Truax said, will include flat-screen TVs in rooms and wet bars, things that are “expected” in upper-echelon hotels.
The Peaks will also get a new continental type restaurant — to be named this winter — and a re-named spa, which recently underwent millions in upgrades under Blackstone.
“I think, immediately, people are going to see service standards changing,” Truax said. “The immediate impact is going to be on the customer service.”
Truax is moving with his 2-year-old daughter and wife to Telluride from the Finger Lakes region of New York. He’s managed properties in Arizona, Vermont and New Hampshire.
According to Telluride Mountain Village Owner’s Association — the entity that collects real estate transfer taxes in the Village — the association will take in a little more than $500,000 in transfer taxes off the sale; that’s no burp for a town that’s had to cut its budgets at every turn.
As of Thursday afternoon, the deed had not been recorded at the San Miguel County Clerk and Recorder’s offices, but TMVOA documents indicate that the taxable “Total Land and Land Improvements and Total Building & Building Improvements” came in at $17.3 million for the sale. The organization can’t collect transfer taxes on “personal property” that changes hands in transactions, meaning the purchase price could have been for more.
Bob Delves, Mountain Village’s mayor, greeted the news warmly. “I think it’s terrific that it’s in local hands,” Delves said. “From what I know of this group, they intend to return The Peaks to its former glory.”
And that, he said, is certainly possible given the hotel’s setting and stature.
“There’s nothing like it. Its location is incredible; the views are incredible … It just needs some love,” Delves said.
George Harvey, a real estate agent with Telluride Properties, said the sale could mean good things for Telluride.
“I do think it makes a difference it’s local owners. They have the passion as well as the money. And that matters. … It’s personal. It’s like a chain restaurant vs. the owner showing up every day,” he said.
The price may have been just right, too: “They bought it right,” Harvey said. “And a heck of a lot of how hotels work is the price. That gives them a huge leg up, when you have less debt to service. So maybe their timing’s good.”