Poor market cited
Crested Butte Mountain Resort (CBMR) officials announced they are postponing the Cimarron base area project once again this summer, citing a weak economy and the ongoing mortgage crisis as factors that make Cimarron a tough sale to prospective buyers.
Cimarron is a proposed upscale condominium and skier facility building at the base area that will serve as the replacement for the Gothic building, which was demolished last fall. Cimarron is planned to hold 95 condominium units, which ranged from $875 to $1,500 per square foot during the initial sale. The building will also house a cafeteria and bar with a slope-side deck, ticket and rental facilities, retail shops, a private swimming pool and locker rooms.
On Monday, March 24, CBMR announced the Cimarron project would not be moving forward this spring as anticipated. CBMR vice president of real estate and development Michael Kraatz says the decision to hold off was based on several factors, including the nation’s weak economy and the mortgage crisis. Kraatz says these factors are “impacting a number of people interested in buying real estate.”
In order to finance the project, CBMR anticipated having a certain percentage of the building already sold to prospective buyers before construction began. “We wanted to be somewhere between 70 percent and 80 percent under contract before we pull the trigger. I think we’re around 45 percent—that is, of the dollar volume—of the building under contract,” Kraatz says.
Cimarron has a storied history of delays. CBMR’s former owners pitched the concept of demolishing the Gothic building to make way for a new slope-side facility, but the project was no more than an idea until the Muellers purchased the resort in 2004.
Early plans for the Cimarron building were presented that fall to the Town of Mt. Crested Butte as a second phase in the re-development of Mountaineer Square, which also included plans for the Lodge building. At the time Cimarron was planned to have only 51 units. Mt. Crested Butte approved the Cimarron project in the summer of 2005.
In the summer of 2006 CBMR planners changed the building’s interior design to house 44 additional units without increasing the overall size of the building, and the plans were re-approved by the town.
In February 2007 CBMR announced that the demolition of the Gothic Building would take place once the lifts closed for the season, after they reported that 75 percent of the Cimarron condominium units went under contract between January 31 and February 2.
Later, it was revealed that the units were not under hard contract, and a number of potential buyers had backed out. On March 23, the resort announced it would postpone taking down the Gothic, citing weakened sales on Cimarron.
But in June, the resort set the demolition of the Gothic building in the fall, leaving the parcel of land open during the winter ski season. On June 20 the Mt. Crested Butte Planning Commission granted an extension of Cimarron’s design approval, which was set to expire on November 20.
The Lodge at Mountaineer Square was completed in the summer of 2007, the Gothic building was torn down and the building site was filled back in by November. Construction of Cimarron was set for this spring, until last week’s announcement.
The recent postponement of Cimarron means the area formerly occupied by the Gothic building will remain an open field this summer and next winter. Kraatz says they may lay some topsoil and grass seed to cover the recycled concrete fill from the old Gothic foundation, and next winter the site may hold a more extensive snow play area for kids.
The delay will not affect other proposed projects at CBMR, Kraatz says. “This is really isolated by itself. We’ll still be moving forward with Red Lady Lodge,” he says. The Red Lady Lodge is a 22,000-square-foot on-mountain dining facility planned for the top of the Red Lady Express lift.
Kraatz says Cimarron will not undergo design changes to reflect the results of the branding study, as is the ongoing Mountaineer Square North re-design.
Mt. Crested Butte town manager Joe Fitzpatrick says the design approval of Cimarron will expire on June 20. He says CBMR will have to arrange a meeting with the town before that date in order to get an extension; otherwise they will have to go back through the town’s design review process. Fitzpatrick says the size and location of the building still has a valid approval as part of the Mountaineer Square Planned Unit Development, a special development area in the town of Mt. Crested Butte.
Between the town’s special use tax, impact fees and building permit fees, Fitzpatrick says Cimarron would generate more than $400,000 in revenues. After the initial delay, Fitzpatrick says the Town is not including the possibility of Cimarron’s related fee revenue in its yearly budget. The projected revenue is being included as part of the town’s Five Year Financial Plan, he says.
Fitzpatrick says the Town isn’t expecting many other development projects to move forward this year. “We definitely are expecting a slowdown for 2008,” he says. “The real estate market across the country is struggling, but there’s a percentage of the population that isn’t affected. Higher-end things and some second homes may continue … There’s an opportunity here.”
“We could get an extension (of the design approval), but I don’t think we’re going too,” Kraatz says. “We’ll probably let it lapse, and next winter if it looks like the situation nationally is better we will be moving forward in 2009 to look for renewal.”
He says in the meantime CBMR is not taking any sales on the building, but instead will be compiling a list of prospective buyers to judge interest in the project.
Kraatz says the resort has been contacting those buyers who currently have contracts. He says, “So far, the majority of buyers that were under contract want to stay under contract. They understand what’s going on in the economy and how it affects projects like this.” Kraatz says some buyers have pulled out and the resort is refunding their earnest deposits.
“There is no question we want to move forward with the project, but it won’t happen until we get where we need to be,” Kraatz says.