Friday, November 14, 2008

Warm Springs Ranch a work in progress

Developer reaffirms commitment in tough economy

Express Staff Writer

Stan Castleton, CEO of Park City-based DDRM Greatplace, remains optimistic about the success of his proposed Warm Springs Ranch Resort despite the current economic downturn. Photo by David N. Seelig

Stan Castleton, CEO of the Park City-based DDRM Greatplace, has a clear understanding of just how complex his proposed Warm Springs Ranch Resort appears to Ketchum city officials and residents.

And thanks to the recent economic nosedive, the project is now characterized by a lack of detail that gives anything but an exact picture of what could be in store for the city.

As Castleton and his development team gear up for four public hearings beginning Dec. 1, the man behind what could become the Wood River Valley's largest building explained that despite the implosion of institutional debt markets, the project is still worth pursuing.

"The super-luxury market is the only one that's still viable," Castleton said of hospitality developments. "But the question has become, 'How do we put together the program?'"

The "program" pertains to the multiple aspects of the resort, including the kinds of rooms in the hotel, the number of for-sale residences on the property, and the size and types of amenities offered.

The difficulty in piecing all of this together would truly begin on receiving the necessary approvals from the Ketchum City Council.

"It would take months after getting the entitlements to figure out the mix that would maximize our chances of success," Castleton said during an interview with the Idaho Mountain Express on Wednesday.

With the entitlements, or approval of the planned unit development application for the project, the process is further complicated by the decision on whether or not to brand the resort.

Castleton said that his firm has a strong relationship with Starwood, owner of St. Regis hotels, but that hospitality specialists PKF Consulting have recommended against partnering with a brand.

Brands, such as St. Regis or Ritz-Carlton, essentially act as "very sophisticated property managers," according to Castleton. And while such an agreement can assist in raising the necessary financing for such a large project, Castleton also said that there's a downside as well in that the company may prioritize the brand over the individual property.

As well, Castleton said that different brands have their own program requirements, such as a minimum number of fractional ownership units. This could also impact the potential plan to create a wellness center featuring a studio in which Mariel Hemingway could host a cooking television show on the premises.

Castleton said that the wellness center could be expanded further, creating a non-profit "institute of environmental health," which would look to teach about sustainability and its impacts on health and the economy.

"Six months ago we thought we could put this together pretty easily, but not now," Castleton said of the institute plan, which he believes could provide an international attraction to the resort.

However, as the financing of the overall project is dependent on a rebound in the economy, the inclusion of a non-profit taking up space in the hotel might not sit well with jaded lenders.

"Given what's happened with the economy, if we're not looking at this from multiple approaches then we're not being realistic," he said. "If we weren't being reactive to the situation, the public would wonder what's wrong with us."

With public hearings scheduled for Dec. 1, 2, 10 and 11, Castleton is hoping to make progress on a process that he called "frustrating" due to the state laws that don't allow the developer to contact city officials outside of public meetings.

He said this sits in stark contrast to his St. Regis hotel project in Deer Valley, Utah, which is under construction and will open next year.

"We have to play by the rules, but the inability to talk directly with the mayor and council once the project is underway hampers an open dialogue," Castleton said.

Regardless of the difficulties, Castleton remains optimistic.

"I have a strong belief that at some level it will work well here and have a huge upside," he said.

This determination leads him to bristle at the notion held by some that he is simply looking for the entitlements in order to make his property more valuable and then sell.

"People will go in and out of office and others can move, but we can't," Castleton said. "We're going to married to this for a long time."

Still, Castleton said he realizes that not everyone shares his enthusiasm for a hotel that could stand up to 93-feet high.

"I understand why this is emotional, especially for people living in the Townhouse Lane neighborhood," Castleton said. "But there needs to be a critical mass or it can't be done."

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