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Potential traffic impacts on Four Mile Road would raise a "pretty significant red flag" for Garfield County if Sunlight Mountain Resort is sold for development, county building and planning director Mark Bean said.
Water, sewer and geological constraints also would be among the considerations if a development proposal is submitted to the county, Bean said.
Sunlight was put up for sale last fall for $50 million. The asking price is based largely on the potential for residential development on some 400 acres owned by the ski area. An existing master plan for the resort calls for 780 homes to be built there, but it hasn't been subject to county review.
Bean said the county already has in place "some pretty significant road impact fees" that would be assessed against the project and help pay for road improvements associated with it. The fees would be calculated based on estimated average daily trips the development would generate.
He said it's possible a consultant for a developer would argue that the traffic impact would be less because some of the residences would be families' second homes.
"I guess that's the debate we would have to get into," he said.
Jerry Jones, the real estate agent handling the Sunlight sale, said he thinks a lot of home owners would be likely to fly in to area airports and get to the resort by vans.
"There's not going to be as many cars if they're destination people going to Sunlight," he said.
Four Mile Road is steep and windy in spots and already can be a problem for Sunlight, thanks to icy conditions that sometimes shut down access to and from the resort for hours at a time.
Neither Jones nor Bean envisions the road being expanded to four lanes. Bean said a study of the corridor around the mid-1990s assumed it would remain two lanes, largely because there's no room to add lanes.
Jones notes that a two-lane road serves the Snowmass ski area. "So it's not a major deal," he said.
A 2002 site development plan for Sunlight states that county sales tax revenues also would contribute to road improvements, as would state and federally generated payments in lieu of taxes designated to the road. Some of those funds would come from Sunlight, which pays fees to the U.S. Forest Service for use of its land. The Forest Service and other public lands agencies pay local governments funds under the PILT program to help make up for the fact that they don't pay property taxes.
Bean said water is "certainly another big issue" for the ski area. He noted that tight water supply is an issue throughout the Four Mile drainage.
Jones says the resort has enough water for development. Its 2002 plan proposed to augment flows when necessary through a proposed 52-acre reservoir in Babbish Gulch. Bean said the question will be whether augmentation would be adequate for the needs of a large development.
Meanwhile, last year, Sunlight, together with Sunlight Mountain Inn and Brettelberg Inn, completed a $1.5 million sewer-system upgrade. The existing 30,000-gallon-per-day plant was operating at capacity, but the improvements have increased capacity to 50,000 gallons per day.
Bean said while the upgrade would accommodate some additional development, it's hard to speculate on sewage treatment needs until a development application is filed. Jones said the system has been designed so it can be expanded further with little difficulty.
Bean said he's sure some level of development is possible at the resort. How much will be determined by water, traffic and other issues.
The current zoning in the area is agricultural/residential/rural density, which allows minimum lot sizes of two acres. There is some commercial zoning right around the ski area, Bean said.
The county's comprehensive plan recognizes the area's further development potential as a ski and commercial area, Bean said. "But it really doesn't go beyond that, unfortunately."
Said Jones, "I think everybody has anticipated that something is going to happen there."
He said the selling price is likely to be contingent on what kind of development approval might be obtained from the county. The asking price is based on the assumption of a 780-home project.
"The due diligence is important, that the buyers understand the process that they have to go through with the county to get approvals for any development. That's going to end up determining the contract that we come up with," Jones said.
Jones said more than 200 parties have requested information packets about the property. Around a dozen prospective buyers have visited the resort. Jones said at least three "are what I call real good for the community and real good for the development. They make the most sense for the community. They understand development. They understand the hospitality industry. They understand the Glenwood Springs area and Aspen and Vail area."
Among interested parties are investors from Turkey. One party that decided against pursuing a purchase is an outdoor sports group looking for a sporting-lifestyle community development, Jones said.
He said he also has talked with some area golf courses interested in reaching a cooperative agreement providing course privileges in association with a Sunlight development.
Sunlight is on sale at a time when prospective buyers may be asking harder questions than once was the case.
John Norton, a former ski resort executive at Aspen and Crested Butte, said that in the 1980s and early 1990s, "it seemed lot of people in the market for ski resorts had stars in their eyes and assumed that business would go up forever and ski resorts were being bought on very large multiples of current earnings. I think that time has passed."
Investors are more realistic today in their expectations for increases in national skier numbers, Norton said.
Sunlight and other Western Slope resorts can't attract skiers through cheap passes as much as resorts closer to the Denver area can, Norton said. And a problem with basing a sale largely on real estate is that real estate sales represent a short-term profit stream.
"Once the real estate's gone your operations have to work. ... The skier operations are a renewable resource," he said.
Jones thinks a key for a Sunlight buyer would be to capitalize on a resort trend toward vacation club units. Instead of just selling residences, it also could sell club memberships in lieu of deeded properties.
Those clubs tend to run at 90 percent occupancy, Jones said. He said 300 club units could help Sunlight reach 200,000 skier days per year, primarily by boosting weekday activity.
"When you start putting that kind of occupancy in there that really makes the other profit centers for a ski area much more successful," he said.
Last season, Sunlight had 72,000 skiers after opening late due to a lack of snow.
Contact Dennis Webb: 945-8515, ext. 516
dwebb@postindependent.com
Water, sewer and geological constraints also would be among the considerations if a development proposal is submitted to the county, Bean said.
Sunlight was put up for sale last fall for $50 million. The asking price is based largely on the potential for residential development on some 400 acres owned by the ski area. An existing master plan for the resort calls for 780 homes to be built there, but it hasn't been subject to county review.
Bean said the county already has in place "some pretty significant road impact fees" that would be assessed against the project and help pay for road improvements associated with it. The fees would be calculated based on estimated average daily trips the development would generate.
He said it's possible a consultant for a developer would argue that the traffic impact would be less because some of the residences would be families' second homes.
"I guess that's the debate we would have to get into," he said.
Jerry Jones, the real estate agent handling the Sunlight sale, said he thinks a lot of home owners would be likely to fly in to area airports and get to the resort by vans.
"There's not going to be as many cars if they're destination people going to Sunlight," he said.
Four Mile Road is steep and windy in spots and already can be a problem for Sunlight, thanks to icy conditions that sometimes shut down access to and from the resort for hours at a time.
Neither Jones nor Bean envisions the road being expanded to four lanes. Bean said a study of the corridor around the mid-1990s assumed it would remain two lanes, largely because there's no room to add lanes.
Jones notes that a two-lane road serves the Snowmass ski area. "So it's not a major deal," he said.
A 2002 site development plan for Sunlight states that county sales tax revenues also would contribute to road improvements, as would state and federally generated payments in lieu of taxes designated to the road. Some of those funds would come from Sunlight, which pays fees to the U.S. Forest Service for use of its land. The Forest Service and other public lands agencies pay local governments funds under the PILT program to help make up for the fact that they don't pay property taxes.
Bean said water is "certainly another big issue" for the ski area. He noted that tight water supply is an issue throughout the Four Mile drainage.
Jones says the resort has enough water for development. Its 2002 plan proposed to augment flows when necessary through a proposed 52-acre reservoir in Babbish Gulch. Bean said the question will be whether augmentation would be adequate for the needs of a large development.
Meanwhile, last year, Sunlight, together with Sunlight Mountain Inn and Brettelberg Inn, completed a $1.5 million sewer-system upgrade. The existing 30,000-gallon-per-day plant was operating at capacity, but the improvements have increased capacity to 50,000 gallons per day.
Bean said while the upgrade would accommodate some additional development, it's hard to speculate on sewage treatment needs until a development application is filed. Jones said the system has been designed so it can be expanded further with little difficulty.
Bean said he's sure some level of development is possible at the resort. How much will be determined by water, traffic and other issues.
The current zoning in the area is agricultural/residential/rural density, which allows minimum lot sizes of two acres. There is some commercial zoning right around the ski area, Bean said.
The county's comprehensive plan recognizes the area's further development potential as a ski and commercial area, Bean said. "But it really doesn't go beyond that, unfortunately."
Said Jones, "I think everybody has anticipated that something is going to happen there."
He said the selling price is likely to be contingent on what kind of development approval might be obtained from the county. The asking price is based on the assumption of a 780-home project.
"The due diligence is important, that the buyers understand the process that they have to go through with the county to get approvals for any development. That's going to end up determining the contract that we come up with," Jones said.
Jones said more than 200 parties have requested information packets about the property. Around a dozen prospective buyers have visited the resort. Jones said at least three "are what I call real good for the community and real good for the development. They make the most sense for the community. They understand development. They understand the hospitality industry. They understand the Glenwood Springs area and Aspen and Vail area."
Among interested parties are investors from Turkey. One party that decided against pursuing a purchase is an outdoor sports group looking for a sporting-lifestyle community development, Jones said.
He said he also has talked with some area golf courses interested in reaching a cooperative agreement providing course privileges in association with a Sunlight development.
Sunlight is on sale at a time when prospective buyers may be asking harder questions than once was the case.
John Norton, a former ski resort executive at Aspen and Crested Butte, said that in the 1980s and early 1990s, "it seemed lot of people in the market for ski resorts had stars in their eyes and assumed that business would go up forever and ski resorts were being bought on very large multiples of current earnings. I think that time has passed."
Investors are more realistic today in their expectations for increases in national skier numbers, Norton said.
Sunlight and other Western Slope resorts can't attract skiers through cheap passes as much as resorts closer to the Denver area can, Norton said. And a problem with basing a sale largely on real estate is that real estate sales represent a short-term profit stream.
"Once the real estate's gone your operations have to work. ... The skier operations are a renewable resource," he said.
Jones thinks a key for a Sunlight buyer would be to capitalize on a resort trend toward vacation club units. Instead of just selling residences, it also could sell club memberships in lieu of deeded properties.
Those clubs tend to run at 90 percent occupancy, Jones said. He said 300 club units could help Sunlight reach 200,000 skier days per year, primarily by boosting weekday activity.
"When you start putting that kind of occupancy in there that really makes the other profit centers for a ski area much more successful," he said.
Last season, Sunlight had 72,000 skiers after opening late due to a lack of snow.
Contact Dennis Webb: 945-8515, ext. 516
dwebb@postindependent.com
