Fairmont pulls out of Peaks deal ( Telluride )

The Daily Planet ^ | Dec 02, 2007 | Pat Healy

[george76]

Fairmont Hotels and a New York investment firm pulled out of a $46 million deal to buy the Peaks Resort, leaving Telluride’s largest hotel in long-term limbo as it prepares to reopen for the ski season.

Two people with direct knowledge of the negotiations — one from each side of the table — said the hotel’s expensive infrastructure problems had torpedoed the deal.

After examining the Peaks, buyers Fairmont and Manhattan-based Thor Equities concluded that the hotel needed $6-7 million in repairs, on top of a planned $60 million renovation...

The impasse didn’t break, and on Friday, Fairmont and Thor walked away from their contract to buy the Peaks. They even withdrew their deposit — a sign that the companies aren’t likely to return to the bargaining table.

The collapse of the deal will disappoint local brokers, government officials, Peaks condo owners and others who had pinned their hopes on Fairmont taking over and sprucing up the Peaks, a 170-room luxury hotel and a fulcrum of the local economy.

The Peaks is still on schedule to open Dec. 15, as promised. But its future beyond this ski season is as opaque as a glass of milk.

The hotel still needs a $60 million renovation that had originally been scheduled for last spring. Work crews had just gotten started when Blackstone called off the massive remodel and announced that the hotel was up for sale.

All summer, buyers from big-name hotel chains like the Marriott Group, Hyatt Hotels, Loews Corporation and Fairmont toured the empty hotel, kicked its tires, contemplated a bid.

The buyers found major signs of physical distress, including leaky roofs and water seeping through the exterior wall...

[george76]

Who are they going to blame now ?

Themselves or someone else ?

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