The Estes Park Housing Authority (EPHA) met in a special meeting Friday afternoon and entered into an agreement with Grand Heritage Management LLC to acquire Fall River Village and the SkyView event venue in Estes Park for $35 million in a deal that would provide approximately 90 new workforce rental units.
Grand Heritage, founded in 1989 by John Cullen, owns several hotels in the U.S., Mexico, and the UK, including The Stanley Hotel through Grand Heritage Holdings, LLC.
In 2022, when Cullen’s company purchased the Fall River Village—an 8.2-acre property located on Filbey Court, Sunny Acres Court and West Elkhorn Avenue for more than $42 million—the plan was for the facility to provide additional accommodations for guests in anticipation of the Stanley Film Center development.
According to information presented to the Estes Park Town Board on June 25 by Scott Moulton, executive director of the EPHA, the units will provide workforce housing for people with household incomes between 60 to 80 percent of the Area Median Income or AMI. Based on the total purchase price for the property, the average value of each unit is $388,888. The replacement cost to build the same units today would be $516,667.
Ten to 15 of the larger units may be sold on the open market with the remainder reserved as workforce housing rentals that would be managed by the EPHA.
Proceeds from the sale of individual units would provide an estimated $10.7 million to $15.4 million that would be used to reduce the debt and provide a required subsidy for the workforce housing rents.
The Fall River Village purchase agreement is subject to a financing condition that enables the EPHA to terminate the contract on or before August 20. In the event the contract is not terminated by that date, the closing is scheduled for September 9.
The purchase agreement provides for a $150,000 earnest money deposit that is refundable if cancelled prior to August 20.
During an overview to the EPHA board members about the financing for the purchase, Moulton explained that the organization may need to seek short-term — from 90 to180 days — or longer — from 12 to 24 months — bridge financing from a private bank in order to close the deal by September 9.
“There are a lot of unknowns as we sit here today what the final financial terms would be in either a longer permanent bank financing structure or bridge structure,” said Moulton.
Financing may involve tax exempt bonds to be sold to minimize the interest rate payable on the debt assumed to close the deal.
Several financial organizations are involved in the deal. The Denver public finance law firm of Kutak Rock LLP will serve as the bond financier, RBC Capital Markets, LLC is a municipal finance company, Hilltop Securities is the Town of Estes Park’s municipal advisory firm, and the Colorado Housing and Finance Authority may consider a $5 to $6 million grant through the Prop 123 State Affordable Housing Fund to provide equity for the workforce housing program.
Moulton told the board that the EPHA was “extremely well placed to receive the award we asked for.”
Additionally, for the deal to come together, the Town of Estes Park will need to decide whether or not to authorize the expenditure of accumulated funds collected from the short-term rental linkage fee and to commit those fees, between $600,000 and $700,000 a year, for the next five years.
The EPHA will make another presentation to the Trustees to ask for the STR linkage funds at the Town Board’s August 13 meeting.
The EPHA board focused much of their discussion Friday afternoon on the tight window between now and August 20 to get the complicated financing details arranged in order to proceed with the purchase and not risk the $150,000 earnest money.
When Grand Heritage acquired the property in 2022, it was anticipated that ground would be broken on the film center later that year. While those plans were put on hold, it is expected that after the sale of Fall River Village development of the Stanely Film Center—a multimillion-dollar venue for film festivals, related programming, and a film museum—will move forward.
Trading off The Stanley Hotel’s reputation of being haunted, the film center will be operated with Blumhouse, a horror film production company in Los Angeles that has produced Paranormal Activity, Insidious, and Get Out.
In addition to the sale of Fall River Village, Grand Heritage is also preparing to sell The Stanley Hotel.
Why No fire ban in Larimer County or at least Estes Park?