TSG to Operate Conference Center?
by Martinique Davis
Nov 01, 2012 | 893 views | 0 0 comments | 5 5 recommendations | email to a friend | print

MOUNTAIN VILLAGE – The Telluride Ski and Golf Co. might get into the business of conference center management, with Mountain Village Town Council’s vote Friday to assign management of the Telluride Conference Center to TSG.

After an hour-long executive session, during which town staff and government considered a  proposal from the ski resort operator to take over management of the Conference Center, Councilor Dan Jansen made a motion for Mountain Village to approve the assignment of the Conference Center management contract to TSG.

Cadence Hospitality has operated the Conference Center since Mountain Village assigned operations to that local group, then called Alchemy Hospitality Group, in 2009, in an effort to reduce Mountain Village’s expenditures on the town-owned (and at that time town-run) Conference Center.

The motion to approve assigning the Cadence contract to TSG was subject to four conditions, to be mutually agreed upon by the Town and TSG, before the transfer. The conditions include the identification of a set of performance requirements: that TSG assume of all of Cadence’s rights, duties and obligations under the Management Agreement; that terms would include the possibility of TSG investing capital into the facility and preservation of the Town’s options upon paying off the bonds on the property (with TSG given the right of first refusal)

and that TSG enter into good faith efforts to work with Marketing Telluride Inc. to market the facility.

The Town’s consent to assignment together with these conditions will be reflected in a               separate agreement between the Town and TSG.

Most members of council expressed support for the proposal at Friday’s meeting, as did members of the public, including the Telluride Science Research Center Executive Director Nana Naisbitt, who said that the nonprofit group would benefit from TSG taking over the Conference Center’s operations.

“We are a nonprofit that desperately needs meeting space, and I believe Chuck Horning and this company understands TSRC’s needs,” Naisbitt said, referring to the annual TSRC meetings which bring around 1,250 visitors – scientists and their families – to Telluride, bringing in an estimated $4.5 million for the local economy.

John Howe, the sole councilor who voiced opposition to the motion, cited concerns that the ski area operator had no experience in managing a conference center. He also noted his concern that the company was “in disarray,” after a number of management-level employees left the company in the months since CEO Dave Riley was transferred to another company owned by TSG’s owner Chuck Horning.  (Riley has since taken the COO position at Sunshine Village in Alberta, Canada.)

“Consenting to this agreement… would be like jumping from the frying pan to the fire,” Howe said.

TSG’s new Director of Sales and Marketing Ken Stone (who has returned to the company after a five-year hiatus, while holding top positions at Crested Butte Mountain Resort, Gateway Canyons Resort and elsewhere) responded to Howe’s concerns, noting his personal experience operating the ski company-run conference center in Crested Butte.

“In my mind, the ski resort and ski company would be the most stable operation to head this over a long period of time,” Stone said.

TSG’s John Horn was more direct in his response to Howe’s assertion that the ski company was in disarray.

“From the outside it does look like a pretty chaotic situation,” Horn said, referring to the changes in leadership at TSG, “and I’m not here to tell you it’s perfect. But it is moving in a good direction. Recent history has shown that this company hasn’t worked well with the community, on many different levels. But I can assure you, at least from the words I’m hearing from Horning, that he’s absolutely committed to working with the community and putting the era of the last four or five years behind us.”

Horn and Stone both suggested the ski company could work through the outlined conditions,  and create a mutually beneficial partnership.

The Town of Mountain Village signed a five-year contract with Cadence in November of 2009, assigning the group as the Conference Center’s exclusive manager and operator. Under that agreement, Cadence was responsible for most of the facility’s associated costs while the town remained the owner of the facility and its assets. Cadence kept 100 percent of all gross revenue derived from its operations of the Conference Center but was obligated to pay the town up to a maximum of 5 percent of revenues. The town continued to pay all Franz Klammer HOA dues and was responsible for any major capital repairs and replacements required.

The 12-year-old Conference Center, with 16,000-square-feet of rentable space, has historically experienced financial losses, due to fixed operating costs unmet by sufficient revenues. At the time of the Cadence agreement in 2009, the town had projected a nearly $500,000 annual subsidy to continue operating the Conference Center. 

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