Things are getting ugly out in Aurora, Colorado, and it doesn’t look like it’s going to get better anytime soon.
In case you haven’t been paying attention to the Jerry Springer-esque drama taking place in the Rocky Mountains, let me quickly bring you up to speed.
The former Gaylord Entertainment Company in 2011 announced it would develop a massive conference center hotel in Aurora, which would use public subsidies to help take the sting out of the development costs.
Fast forward a year, and the Gaylord brand was sold to Marriott International. Hoteliers in the Denver area, blowing their collective microchips over the thought of a 1,500-room property soaking up demand, objected to the project and filed a petition with the state’s attorney general’s office, asking that the developers of the $824-million hotel reapply for subsidies because the development team had changed substantially. (Rida Development Corporation is now partnering with Marriott on the development.)
The petition was denied because it came after the 35-day window allotted for the objection of such deals. The hoteliers, including owners of several Marriott-branded hotels and the Broadmoor, took their battle to the next level and sued the state’s economic development office, its economic development commission and the city of Aurora.
Not to be outdone, Aurora officials last week fired their own lawsuit against 11 of the hotels because, at this point, why not?
Aside from the teams of attorneys involved (who I imagine at this very moment are cackling like mad as they tally up all the billable hours involved in this mess), there aren’t any winners here.
Marriott comes off as a brand that looks like it is divided against itself, with owners of Marriott-branded properties fighting the development of another Marriott brand in their backyards. The hotel owners come across looking anti-competitive. And the politicians in Aurora come off looking like politicians. (Aurora’s mayor was quoted as describing the area’s hoteliers as being “afraid of competition.”)
The biggest loser by far, however, has to be Denver’s hotel industry. The market has been performing well, with year-to-date revenue per available room up 8.4% through September, according to data from STR, the parent company of Hotel News Now. Occupancy and average daily rate were also up a respective 5% and 3.3% through the same period.
As performance has strengthened, there has been a coinciding interest in hotel development activity. There are a total 24 projects comprising 4,564 rooms in the construction, final planning or planning stages, according to STR. No word yet on whether existing hoteliers plan to band together to wipe those planned projects off the slate as well.
But if I were a hotel developer, I’d take one look at this very public, messy dispute and decide that there are better places where I can waste my time. There are enough challenges in hotel development to begin with; I would not add the risk of my project being tied up in the court system as well.
I’m not sure whether other developers might think the same way (I’d love to get your thoughts on the issue), but I don’t think it’s something you’d want to tempt fate over. I hope this matter is resolved quickly and cleanly, though if the past two years are any indication, that’s not going to be the case.
Tweet of the Week
Happy Halloween everyone!
Sorted for Halloween. pic.twitter.com/wDM4T3Q7g0 — Hello You Creatives (@Hellocreatives) October 29, 2013
The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.