11.12.10 – 09:55 am
TELLURIDE – The ownership group of The Peaks Resort and Spa has proposed to adding 90 rooms to the Telluride region’s largest hotel in conjunction with a doubling of immediately adjacent Telluride Conference Center.
The proposal envisions the construction of a new structure on the south side of the existing hotel building, extending across Mountain Village Boulevard to where it would attach to the existing conference center. The new structure would contain the new hotel rooms and conference facilities, an indoor passageway from the existing hotel to the existing conference center, and underground parking.
In addition, the existing tennis courts at The Peaks would be covered, creating not only a year-round indoor tennis facility, but a flexible 80,000-square-foot venue that could be used as an exhibition space, also in support of group business.
The concept presented by John Cullen, C.E.O. of Grand Heritage Hotels, which owns a stake in and manages The Peaks, is to “take the lowest hanging fruit to bring additional demand to Mountain Village.”
The Telluride region, he explained, is evolving from a “trader business strategy to an operator business strategy,” with the economy supported less by the construction and sale of real estate, as it has been for the last several decades, and more by operating tourist-related businesses. As part of that emerging strategy, Cullen explained, an expanded Peaks Hotel attached to an enlarged conference center would allow Mountain Village to host significant group business. Having two separate ballrooms within the conference center would allow one group to meet in one ballroom while another is setting up or breaking down the other.
While the Peaks ownership group has the financial capacity and desire to move forward with the proposal as early as next summer, Cullen and his partner Todd Herrick said, it would first require a decision by the Town of Mountain Village to expand the conference center. Complicating any such decision by the town is the fact that the land identified as most suitable for the conference center expansion is partly owned by The Peaks and partly by the Telluride Ski and Golf Co. That land would have to be transferred to the town for the conference center to be built.
Both Telski C.E.O. Dave Riley and Mountain Village Mayor Bob Delves said on Thursday that no formal talks have begun to discuss a transfer of property. Both said that decisions about the immediate future of Mountain Village would be reached in the next few months in the context of the ongoing Mountain Village Comprehensive Planning process. But each of them also separately stated that he is intrigued by Cullen’s idea because it appears to address a significant number of the town’s goals. Those goals include an improved bed base, economic vitality in the Mountain Village center, more recreational amenities, and an improved ability to host group business.
“I think it’s a great idea,” Delves said. “I am so happy to see the business community show some leadership on this. I applaud them for doing it.”
But, Delves cautioned, it is far too early in the process – with an idea merely having been presented, but not formally proposed – to predict whether it can gain enough support to be incorporated into the new master plan or what obstacles may lie ahead even if it is. For one thing, the town has not yet begun to evaluate the financial feasibility of expanding the conference center.
As for the ski company, “We’ve believed for a long time that to be a more economically sustainable resort a high-performing conference center is a part of the formula,” Riley said. “The existing conference center lacks certain facilities, including breakout rooms, separate ballrooms and a direct connection to a hotel. Mountain Village has been passed over by conference planners time and again. The plan John [Cullen] has presented addresses those problems. I’m excited about it.”
The current local economy would not likely support the construction of a new conference hotel from the ground up, Cullen said, whereas an addition to The Peaks is far more feasible because it would leverage off of existing infrastructure. While new hotel rooms would have to be constructed, other amenities, including the spa, public spaces, and food and beverage facilities, are already in place.
The challenge facing the region, Cullen said, is less a shortage of hotel rooms on the supply side than weakness for them on the demand side.
“I overwhelmingly believe that by adding 90 hotel rooms to the supply we will add a whole lot more than that in demand,” Cullen explained. Right now, The Peaks contains about 170 rooms with direct access to 8,000 square feet of meeting space in the hotel’s ballroom, he explained. The plan he has presented would give 260 hotel rooms direct access to two 20,000 square-foot meeting rooms, plus breakout rooms.
The proposal from The Peaks comes just as the Mountain Village’s comprehensive planning process nears the end of its first phase, with the presentation of a draft plan by a planning task force to the town council expected by the end of the year.
“The ski company view of [the Peaks’ proposal], as well as other parts of the plan, is that it all needs to be addressed in a holistic way,” Riley said. We want to see a comprehensive plan with a strong potential of working in the long run. I’m very hopeful it’s going to happen.”
For their part, both Cullen and Herrick, representing The Peaks, and Mayor Delves similarly expressed hopefulness that the three parties – The Peaks, the ski company and the town, through the planning process, can reach an agreement to move forward.
“If we can’t pull this off,” Cullen said, “nobody can for at least another ten years.”
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