Popular lodging business asked to cease operations due to zoning

Complaint could send town into legal dispute

A popular bed and breakfast lodge in Mt. Crested Butte may be forced to close due to a zoning violation on the underlying property. The town has notified the owner of the property at 39 Whetstone Road that he must cease operating the lodging business known as the Crested Butte Retreat or the town will ask the court to enjoin the property from violating the town’s zoning code.

 “The owner is being told he is violating the current zoning by running a bed and breakfast at that location,” says Mt. Crested Butte town manager Joe Fitzpatrick.
The Crested Butte Retreat is being operated on a parcel of land that is zoned for single-family use. According to the town’s zoning code, commercial lodges and bed and breakfast  operations are not allowed in single-family zoning.
Fitzpatrick says the town sent a letter to the owner asking to close the business after the town received a complaint from a neighbor.
“The neighbors are pretty adamant that they don’t want to see this as an inn,” says Mt. Crested Butte community development director Bill Racek.
The owner of the Retreat, California resident Fred Studier, believes the neighbor’s complaint occurred after several people attending a recent pro-bono event for the Chamber of Commerce parked along the street, instead of the property’s designated parking spaces.
“The fact that one unidentified neighbor… can shut down such a valuable local business with a complaint that has nothing to do with our business operation, and negatively impact so many residents is a travesty,” Studier says.
Fitzpatrick says he cannot specifically say whether the complaint was traffic-related. “The complaints are related to the zoning or use of the property,” Fitzpatrick says.
Studier says after he received a letter of complaint from the town a few months back he started working on a re-zoning application and sent one to the town about two weeks ago. Studier says the business has never received a complaint directly from a neighbor.
This is not the first time the property’s use has been called into question.
Racek says the town had received similar complaints about the operation of a commercial lodge on the property under the previous owner, who performed an extensive remodeling in 2004. When the town asked the previous owner to cease operations, the owner filed an application to re-zone the property.
Fitzpatrick says the town never approved that application. “I don’t think we totally understood how [the business] was going to be run,” he says. Shortly after, the property was put on the housing market.
Prior to being the Crested Butte Retreat, Studier says, the property was rented out as a multi-unit condo complex called the Shenandoah Buttes for 20 years.
Studier says when he purchased the property in December 2006 it was already being operated as the Crested Butte Retreat. The building had nine bedrooms attached to a central living area. Each of the rooms had individual door locks and bathrooms. There were also two more “rooms” in the building—an owner’s unit with its own kitchen and bathroom attached to the garage, and a studio unit above the garage.
Studier says the previous owner did inform him that the property was zoned as single-family. “He contended that due to the over 20 years of operation as a multi-family commercial business, it was likely to be, although not guaranteed to be, allowed to continue that way indefinitely,” Studier says.
But Fitzpatrick says there is a difference between renting out a property and running a lodge. “It has been a rental property for many, many years. It has not been what it is today for very long,” he says.
Racek says the zoning code allows for single-family residences to be rented out to a maximum of four people. Racek admits that there may have been more than four renters at the property in the past, but that could be the case for many buildings in Mt. Crested Butte. “We really only respond to these things on a complaint basis,” Racek says.
The code does not allow a commercial business, such as one that has employees and pays sales tax, in a single-family zone.
Studier doesn’t deny that the business is being operated in a single-family zone, but he believes the benefits the business provides to the community speak for themselves.
In the nearly three years of operation the Crested Butte Retreat has been quite successful. Twenty-nine of 32 reviews on tripadvisor.com gave the Retreat a five-star, or excellent, rating. It has been featured in magazines such as Outside and Travel and Leisure, as well as being Ski Magazine’s Inn of the Month in January 2008.
Studier says they had rented more than 2,000 room nights last year. Prices range from $150 to $500 depending on the room and season.
Studier says since acquiring the property the business has spent more than a million dollars on employees, contractors and local business services, and generated more than $30,000 in sales and lodging taxes to the town of Mt. Crested Butte. The Retreat currently has three full-time employees, as well as several contractors such as delivery and concierge services, and a part-time chef.
“It seems really odd [the town] would go to all this trouble over one complaint about parking on the street, especially with all the town has to lose by shutting us down,” Studier says. “This property has been operated as multi-family for over two decades and through at least two prior owners. It is adjacent to several multi-family properties, so it is not changing the character of the neighborhood by operating this way.”
Studier says he hasn’t heard back from the town on the re-zoning application.
“If he has one, fine, it will go through the process,” Fitzpatrick says. “If the council would change the zoning on that site, things would be different.”   
Studier does have the property currently for sale on the housing market.  On Wednesday, August 12 Benson-Sotheby’s International Realty had the Crested Butte Retreat listed at $4,995,000.