If the sale is completed, WestPac would own the rights for the overall development of Base Village, including both residential building and sales as well as commercial programming and leasing. The new ownership would have to comply with all covenants and conditions that are attached to the existing property under development, as well as all construction contracts.
At a press conference in Aspen, WestPac principal Patrick Smith said he made his unsolicited offer because there is not much resort "beachfront" left in the mountains. And in the past year or so, Smith has been snatching up everything in Snowmass that he can.
He heads one investor group that has purchased the Snowmass Center, at the lower end of Snowmass Village. Smith is hoping to obtain final approval in the next few months for his plan to redevelop the Center.
Smith also leads a second group of investors who have bought the slopeside Snowmass Mall, the area's original slopeside commercial core, and he has a contract for a third piece of Snowmass: the Conference Center, Silvertree Hotel, and Wildwood Lodge. This latter deal is projected to close in early 2008. If he does purchase the Base Village project, he would be the primary landlord and developer for the entire town.
The WestPac bid could be a boon to both Aspen Skiing Company (ASC) and Intrawest. Smith's bid is equal to the total projected price for the completed project, including the pre-sold units, which means that Aspen and Intrawest will realize immediately their anticipated return through 2011-without the risks associated with completing the project. That makes the offer particularly attractive. "This potential transaction was not planned or contemplated by the base village partnership, however the base village has always been a project that was being developed for sale," said Jim Crown, managing partner of ASC.
Smith made his pitch for the Base Village project only a day or two before Fortress Management announced it was purchasing Intrawest, but it appears unrelated. "Although the timing may seem more than coincidental, this potential transaction is not related in any way to the recently announced pending sale of Intrawest," said Michael O'Conner, vice president of development for Intrawest.
If a deal for Base Village occurs, ASC will remain involved in the long term operation and management of base village. It will also own and operate the Children's Center, commercial space for ticket sales, and ski retail and rental. In addition, Aspen/Snowmass Hospitality will handle hotel and residential property management, including the Westin and The Little Nell properties. ASC will also remain an active participant in village management, and is moving forward with over $50 million in on-mountain improvements that are an integral part of base village and the entire town's renewal.