The decision this week to auction off the remaining condominiums at the Steamboat Grand Resort Hotel signals the possible conclusion of a drawn-out sales process at one of the most prominent buildings at the base of Steamboat Ski Area.
The Steamboat Grand received its four-diamond hotel rating from AAA in August 2003 and has been well-received during the height of winter and summer tourist seasons. But the original business plan, which anticipated selling one-quarter interests in condominiums within the hotel, never took off in the local real estate market.
Seven years after pre-sales at the Steamboat Grand were offered, Grand Summit Resort Properties, a division of American Skiing Company, is planning a March 18 auction of more than 130 units, some whole-ownership units and some interval units. GSRP officials promise that, of the inventory offered, 100 units will sell to the highest bidders regardless of price.
Some local Realtors say privately that there never has been much of a resale market for Steamboat Grand intervals after the initial sale. That's at least partly because there is no local lender willing to make loans on the intervals. Most prospective buyers seek financing, Realtors say. Prices range upward of $30,000 at the entry level and have soared above $200,000 for some individual transactions. The absence of a resale market detracts from Steamboat Grand intervals as an investment, Realtors say.
Current real estate listings for the resale of two-bedroom units at the Steamboat Grand range from $133,500 to $149,000 for quartershare interests.
Opening auction bids on Steamboat Grand units have not been set, but the numbers used to auction the inventory at the Canyons Grand Summit Resort Hotel in Utah in February 2004 provide some insight.
The Canyons Grand, near Park City, Utah, is about a year older than the Steamboat Grand. And it's in a different market with Salt Lake International airport a little more than 30 miles away.
The opening bid for the smallest of quartershare units at the Canyons Grand was $15,000, according to former ASC executive Erik Preusse. That compared with original asking prices of between $55,900 and $84,900 for the studio units, which range in size from 368 to 589 square feet. Bidders were required to provide a certified check of $5,000 to purchase a studio unit at auction.
Two-bedroom quartershares at the Canyons Grand carried initial asking prices between $204,900 and $244,000. Opening bids at the auction were $50,000. Three-bedroom quartershares required an opening bid of $100,000.
After several delays, the Steamboat Grand opened in September 2000. The business model called for hotel management to book transient guests and group business into available rooms when they were not being used by the owners. The owners pay management fees.
The Steamboat Grand in----cludes traditional hotel rooms and condominiums. The number of traditional hotel rooms at the Grand is bolstered by flexibility in the condominium floor plan.
The 412-room hotel is configured so that individual bedrooms attached to multibedroom condominiums can be locked off from the condo and booked as single hotel rooms with their own hallway entrances.
GSRP officials reported fav----orable sales activity throughout 2000, but sales were suspended for about a month in summer 2001 while a lawsuit involving one of the original hotel contractors was cleared up. Sales then lagged after the Sept. 11, 2001, terrorist attacks. A company official said in December 2001 that the Grand had closed $37 million in sales.
A year later, longtime GSRP real estate executive Jenny Och--tera announced a new strategy. Ochtera said 51 percent of the quartershares represented by the 183 condominiums at the Grand had sold for a combined $45 million. But that wasn't enough.
"Our sales pace has been unfavorable in the past," she said at the time.
GSRP proposed to begin offering one-eighth interval shares to lower the entry point and move the units out of competition with nearby ski-in/ski-out units.
Ochtera predicted a sellout period of just longer than three years.
Textron Financial, which issued the loans used to build the Steamboat Grand, renegotiated the terms of those loans and included marketing dollars to put some oomph behind the sales effort.
After three years of a steady trickle in sales, Textron has given its blessing for the March auction.
Keenan Auction Company, which successfully auctioned off 167 fractional share condos of a GSRP property at ASC's resort in Attitash, N.H., in 2001, has been retained to conduct the auction in Steamboat.
This auction will allow participation by potential bidders worldwide over the Internet at the same time other bidders participate in a live auction on site. Keenan will work with Proxibid.com to meld the live auction and the Internet auction.
An informational Web site is under construction at www.steamboatgrandauction.com.
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