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MOUNTAIN VILLAGE, CO-The largest resort in the Telluride region has changed hands for approximately $20 million in a deal that includes additional land. Blackstone Group sold the two entities that own the property to newly formed group that includes local investors and two principals of Grand Heritage Hotels and Resorts, an Annapolis, MD-based hospitality company that operates 11 properties in the US and abroad. The property came to market two years ago with an asking price of $50 million.

A 140-unit hotel with a 42,000-square-foot spa and fitness center, a full-service restaurant, a coffee shop and dozens of additional units owned by individuals, the Peaks was the first major resort project near Telluride. Developed in 1992 by Doral, the Peaks has changed hands several times through mergers and been sold twice. Previous owners in chronological order include Carefree Resort, which purchased the property; Patriot American, which bought Carefree; Wyndham, which merged with Patriot; and then Blackstone, which acquired the property in 2005.

The new ownership includes local investors Ted and Todd Herrick, the latter being president of Highlands Resorts; Mike Theile, a local real estate agent; and Bruce MacIntire and Kevin Jones of LuxWest, a local brokerage and development company. The out-of-town ownership includes Grand Heritage principals John Cullen and Brian Martin.

Since Blackstone took over, according to the new ownership, the Resort’s reputation and performance has been plagued by shifting strategic goals and a challenging economic environment. Over the last four years alone, in addition to several aborted sales attempts, the Resort has experienced a substantial renovation of the spa, a full condo-sales program, temporary closure and a re-opening as a hotel, according to the new ownership. At the present time, $4.8 million in renovations is underway related to the settlement of a lawsuit between Blackstone and the Resort’s HOA.

“As locals who have watched the Peaks through all of its permutations, we are fully aware that this has been a difficult property to own,” said the group’s managing member and Telluride resident Todd Herrick in a prepared statement, “but we are confident that our group finally brings the right mix of local oversight…and highly experienced management… .” Herrick did not respond Thursday to a request for an interview.

At least two recent attempts to sell the property fell through for Blackstone. A JV of Fairmont Hotels and Manhattan-based Thor Equities pulled out of a $46 million deal to buy the property in late 2007. A New York firm called HP Hotel Capital put down a deposit in spring 2008 but never closed; according to published reports company principal Adam Hochfelder was arrested that summer and indicted on several charges after allegedly misrepresenting the value of his personal and professional holdings in order to borrow approximately $17 million from partners, family members, friends and banks between late 2002 and early 2008.

“We think The Peaks has strong operational upside in a world class destination,” Cullen said. “Both ski and summer offer great recreational opportunities and the airport modernization that is nearing completion will open Mountain Village, the Town of Telluride and the Peaks to a wider audience. To me the bottom line question is ‘If it were not here now, would you build it again?’ My unequivocal answer is ‘yes’.”

Instead of substantial debt financing for the hotel acquisition, which wasn’t yet available on reasonable terms, Herrick said the investor group put up a big chunk of the purchase price in equity and obtained a small loan through an affiliate of Bixby Bridge Capital, LLC, a Northbrook, Illinois based private lender. “Many investors are paralyzed by the current news headlines and are either out of this sector all together or are taking a wait-and-see approach,” he said. “This allows some very attractive opportunities to slip through the cracks. We think Peaks is one of these.”

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