TELLURIDE – A temporary sign announcing the Hotel Madeline Telluride is now in place in front of what was, until late January, the Hotel Capella Telluride.
The permanent sign “was supposed to be done today,” said Ira Kleinrock, one of the three-member on-premises Manhattan Hospitality Advisors team facilitating the transition of the 100-room luxury hotel, in a telephone conversation Wednesday, “but our sign manufacturer became ill over the weekend, so that’s been held up, a little bit.”
The hotel’s luxury spa has been renamed “Spa Linnea,” Kleinrock said, after “a flower that is I think the flower of Sweden, and is also prevalent in Colorado, so we thought that was quite fitting.”
Spa Linnea will be run by world-renowned Blu Spas, full-service spa consultants with 250 spas in 25 countries.
But the Swedish connection doesn’t stop there – the facility’s new name, Madeline, is an homage to Sweden’s Princess Madeline, and the construction loan on the property is held by Swedbank, the leading bank in Sweden, Estonia, Latvia and Lithuania with operations in Denmark, Finland, Norway, Western Russia, Luxembourg, Ukraine, China, Japan and the U.S. Swedbank acquired the loan in 2008, after the bankruptcy of Lehman Brothers, the original lender on the biggest construction project ever built in the Telluride region.
Swedbank invested $60 million to finish construction on the 100-room, $200 million Capella in 2008, going on to invest another $5.9 million – because it “believed in the project,” a bank official explained at the time – to keep the Capella operational.
Late last year, when foreclosure proceedings began against property owner Robert A. Levine, Swedbank hired MHA founder Jack Westergom, in a “third-party position as an officer of the court,” he told The Watch, to manage the asset.
“I do not represent Robert Levine or the bank,” Westergom said at the time; rather, “I was brought in to protect and preserve the estate.”
Earlier this year, Westergom rocked Telluride with the announcement he would be closing the Capella, citing financial constraints – including, presumably, a 2011 budget that forecast a $2 million loss.
But a few days later, it was announced that the operating agreement with Capella had been terminated and Westergom’s group would keep the property open.
The Capella Telluride, the first hotel in North America to be operated under the brand started by longtime Ritz-Carlton CEO Horst Schulze, opened in 2008 with 100 units, and 50-plus condo rental units selling for $1,200-1,500 per square foot.
When those units didn’t sell, Levine found himself unable to service the construction debt, and last October, foreclosure actions were launched.
Despite the Capella’s demise, Kleinrock said Wednesday, “We think there’s a very, very strong market for this hotel.
“To be honest with you, everyone has their opinion as to why [Capella] didn’t make it, but at the end of the day, the timing was just poor.”
This week, MHA fired and then hired back most of the hotel’s 100-plus employees. “Most of the people that left are management people,” Kleinrock said, “who have been with Capella a long time, and have chosen to stay with them.”
A new general manager arrives Saturday, he added. “His name is Daniel Barr, and he is coming from Rome.”
Barr, Kleinrock said, is half-American, half-Italian, and has spent the first half of his work career in the U.S., in the hotel business, and the last part of his career in Italy, where he has worked at high-end luxury properties in Rome. Kleinrock himself is a 35-year veteran of the hotel business, and MHA founder Westergom’s background includes asset management, hotel/resort operations, international marketing, investment relations and real estate.
“We are absolutely going upscale, not downscale,” Kleinrock said, of the firm’s plans for Hotel Madeline. “We have a lot of new and creative ideas and we have a lot of marketing expertise behind us.”
To get the word out about the luxury Hotel Madeline, MHA has hired the “world-renowned” New York City-based public relations firm, Hawkins International, he said, to represent the property; other Hawkins clients include the top-flight Dorchester Collection, “and a lot of ski areas in North America and in Europe.
“We think there is a very, very strong market for this hotel” in South America and in Europe, he added, “and we’re certainly not forgetting where our bread is buttered, in the good old USA.”
On the U.S. front, he said, “We think there is real opportunity on both the East Coast and the West Coast” for the development of new clientele. “Telluride is a great mountain; I remember Telluride from the old days, when it was the extreme skiers’ mountain” in the U.S., and even today, “there’s nothing like it.”
Kleinrock reported he has already “had some meetings with [Telluride Ski and Golf CEO] Dave Riley” and is in the process of “working in conjunction with Telski to see how we can help market each other.
“This is a world-class resort,” he reiterated, “and if anything, Telluride hasn’t done a great job of marketing itself.”
“Interestingly enough,” said Kleinrock, a native New Yorker who will divide his time between Telluride and Los Angeles, “if you pick up any one of the newspapers in Los Angeles, you never see an ad for Telluride.”
Meanwhile, although the hotel lost “some reservations” in the wake of MHA’s January announcement that Capella doors would shut on Jan. 31, an announcement soon rescinded, reservations are continuing strong, Kleinrock said.
“In fact, I just now got off the phone with John McGill,” who brings Gay Ski Week to Telluride later this month. “We are hosting a number of his people here, and we are hosting Gay Ski Week après ski events in the Suede Bar” every night, during the week-long festival.
Except don’t call it the Suede Bar. Although the firm is not yet ready to announce a new name for Suede Bar, it has rechristened Onyx “M’s,” short for Madeline’s, and the Suede Bar’s new name should be official next week, along with menu changes that will, Kleinrock promised, “be more on the traditional side” than in the past, with an emphasis on “American” cuisine, under longtime Telluride restaurateur Jake Linzinmeir.
“We think very highly of him,” he emphasized of Linzinmeir, “and we’re excited to have him working with us.”
As for plans to sell the facility’s languishing condos, Kleinrock said, “because of the legal stuff, we’ve had to put that on hold…until there is a formal foreclosure,” now slated to take place June 2.
“I believe, once that happens,” he added, “we will have some new marketing direction in there that hopefully will kick into high gear to sell some units.
That said, he added, “we have our team in place, and we’re actually answering the phones and answering questions.”
In other words, the Hotel Madeline Telluride is ready for business.