Receiver: Capella Will Continue to Operate
by Karen James
Nov 22, 2010 | 2194 views | 5 5 comments | 12 12 recommendations | email to a friend | print
<b>READY FOR BUSINESS</b> - Despite the foreclosure process, the receiver in control of Capella and Inn at Lost Creek hotel and condominium projects, Jack Westergom, said at a town council meeting last week that the properties will remain open and he is seeking ways to improve them as well. (File photo)
READY FOR BUSINESS - Despite the foreclosure process, the receiver in control of Capella and Inn at Lost Creek hotel and condominium projects, Jack Westergom, said at a town council meeting last week that the properties will remain open and he is seeking ways to improve them as well. (File photo)
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MOUNTAIN VILLAGE – The court-appointed receiver in control of the luxury Capella and Inn at Lost Creek hotel and condominium projects that recently entered the foreclosure process took pains to soothe nerves and allay concerns at the Mountain Village Town Council meeting last week, assuring attendees that both developments will continue to operate despite rumors and speculation to the contrary.

“We will be open for the season,” said Jack Westergom, founder and managing director of the Los Angeles headquartered hospitality advisory firm Manhattan Hospitality Advisors. Westergom recently stepped into the owner’s role in the wake of the late- October foreclosure filing against RAL Mountain Village Lodging LLC by its unlikely lender, Swedbank.

“Our goal to get caught up on all receivables,” he said. Not only have employees not been fired, he said, “They are not going to be fired.”

In fact, “We’re looking for ways to expand the business to employ more people over time…to make this the kind of asset you’ll be proud of,” he continued.

“We want to make sure that community and world know that these hotels are operating,” said Mayor Bob Delves.

“As far as I’m concerned we are status quo or better.”

Swedbank bills itself as the leading bank in Sweden, Estonia, Latvia and Lithuania with operations in Denmark, Finland, Norway, Western Russia, Luxembourg, Ukraine, China, Japan and the US. The bank acquired the construction loan on the Capella property in 2008 (while it was still being built) following the bankruptcy of the original project lender, Lehman Brothers. Lehman had offered both the Capella and the Inn at Lost Creek as collateral on another financial transaction with Swedbank.

“We never asked for this, we ended up with it on accident,” said New York-based Swedbank vice president Anna Hertzman, who separately addressed council at the same meeting.

Although Swedbank is not an active real estate lender in this country, Hertzman said that the bank decided to invest another $60 million in the property following Lehman’s demise.

“We decided we believe in this, we will continue funding the construction,” she said.

“Since the hotel opened, we have funded shortfalls of $400,000 a month, and we continue doing so because we believe the hotel will become successful one day.”

“We just came to a point where to protect our collateral as a bank you file foreclosure – at least you do these days.”

Westergom said that not only will the properties remain open, but he will be seeking ways to improve the quality of their products, services and service delivery.

“I think these assets are viable assets; there’s no reason why they shouldn’t be successful,” he said.

“Our goal is to see what we can do to make these hotels self-sufficient so they don’t have to be supported by a bank.”

Without divulging any specifics, “We’re looking at putting in place a number of things to generate more business and tax revenue,” he said.

While the hotels are going through the foreclosure process, they have not yet been foreclosed upon, Westergom clarified. RAL Companies and Affiliates President and Chief Executive Officer Robert Levine remains the owner of the properties, which are scheduled for sale early next March, and has not filed for bankruptcy, he said.

“We’re really excited about the hotels and the opportunity to make them something special,” he said.

“I was encouraged to see that the receiver was in fact a hospitality professional,” not strictly a financial person with no experience in the hospitality industry, said Delves. “I was encouraged by that right out of the blocks.”

And there’s already a sign that Westergom is thinking big picture.

“We need to help promote Telluride Mountain Village because by doing that we will actually promote our hotel,” he said

“I think we’re in a lot better shape than we could be, given all the moving parts,” said Delves.

“I’m seeing a glass half-full.”

Comments
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ResponsibleFreePress
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November 23, 2010
Mr. Face-I agree on compliance with the law and the line theory; my point was the bending of the knee to explain to a bunch of people who did nothing but get in the way of the builders and contractors.

N O T H I N G.

This is the same bunch who outlawed mechanical delivery of goods to Heritage Plaza businesses...

W A I T U N T I L NO ONE WANTS TO LEASE ANYTHING

IN HERITAGE PLAZA EXCEPT THE GUY STUCK WITH ALL THE OPEN PROPERTY...
Matthew4u
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November 23, 2010
Hi Face and Resp. yes you are correct. I like Delvies a lot but the council gives me a headache. What can you do? Too much unecessary regulation in T-Ride is bad for business.

I could not stop laughing about the comment about the doors banging :-) I deal with that problem all the time, in order to change the overhead hydrolic door closing mechanism you usually have to replace the entire, solid, door because the holes in the door do not match with the new hardware- which is what I am doing now at great expense. LOL. Warmest regards, M4u.
FaceOnMars
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November 23, 2010
As far as I'm concerned a five star hotel ought not earn a fifth star as long as doors from other rooms closing can be heard from within your room. The Broadmore in CO Springs did not pass this test for me.

There is probably oooodles of cash to be earned from a mechanism which closes a door securely, safely, and with next to little noise.

I have no idea how Capella faired out on my personal test as outlined above?

As far as the delay in construction: capella could have easily had their plans approved if they were originally in accordance with LUC parameters & did not engage in the whole exchange of variances for benefits game.

If I want a cup of coffee, I get behind the last person in line and wait my turn ... following the rules ... I don't sing and dance to everyone in line about why I should be entitled to move to the front out of turn.
Matthew4u
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November 23, 2010
The hotel business is something I know a lot about; the Capella should convert from 5 stars to 4 stars, and charge less for the rooms.

The only difference between 5 stars and 4 stars is the number of staff attendees; quite frankly, I can carry my own ski boots just fine.

It will be 5 years, at least, before the economy recovers, there is a huge demand for hotel rooms, although the consumers are much more budget conscious than ever before.

The Capella could make good money, at a lower price point.

The Capella, and the Palais Jamai in Fez Morocco are my two favorite hotels in the world; well worth the extra $$$$$. Put those 2 hotels on your bucket list. Best, regards M4u
ResponsibleFreePress
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November 22, 2010
Why anyone party to this is consulting the Town of Mountain Village members is beyond me..

Here is the entity that actively delayed construction for....how long?

Here is the entity that enforced max height regulations that make the condos feel like you are in a Hampden Inn...

It is my understanding that RAL either paid for the municipal improvement Ice Rink in full or close to it just to get the right to build the units..

It wasnt only the market, it was the delayed construction, it was the egregious building conditions, it was the Town's attitude to RAL a known quality corporate citizen...

Someone send over a mirror to TMV council members..the blame includes unreasonable regulations that discourage investment, a pro harassment enforcement building office..and you kneel before this bunch?