VOLUME 25 NUMBER 5 JANUARY-MARCH 1995 RESIDENTIAL BEAVER CREEK RESORT AVON, COLORADO PROJECT TYPE

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1 VOLUME 25 NUMBER 5 JANUARY-MARCH 1995 RESIDENTIAL BEAVER CREEK RESORT AVON, COLORADO PROJECT TYPE Beaver Creek is a 2,777-acre, four-season mountain resort featuring numerous recreational amenities including skiing, golf, and tennis. Currently the resort contains 1,320 residential units (including 121 timeshare units), 471 hotel rooms (including a 295-room Hyatt Regency Hotel), 135,000 square feet of retail space, an 18-hole golf course, and approximately 60 trails on 1,125 acres of skiable terrain, with about ten lifts, of which three are high-speed quad chairlifts. Beaver Creek currently has a ski capacity of 9,000 skiers per day. At buildout, there will be approximately 1,600 acres of ski terrain accommodating a total of 11,000 skiers per day with a total of 15 chairlifts. SPECIAL FEATURES Ski facilities Mountain location Long-term buildout High-income housing DEVELOPER Vail Associates Real Estate Group P.O. Box 959 Avon, Colorado PLANNERS Vail Associates Avon, Colorado Various Consultants

2 GENERAL DESCRIPTION Beaver Creek, the 2,777-acre, upscale, polished ski resort adjacent to Vail and developed by Vail Associates, has been under construction since 1978, and continues to be on the cutting edge of ski resort development. Although the resort was slow to build momentum in its early stages, it has steadily progressed and matured over the past 17 years and is now reaching the final stages of development. Beaver Creek has set a high standard for preservation of unique site characteristics and devised many innovative solutions to the aesthetic, ecological, and traffic-related challenges of ski resort development. It also developed a land use plan that complements, rather than competes with, the natural environment. Beaver Creek enjoys a first-class location, not only for skiing but for other leisure activities as well, and it has enthusiastically pursued the concept of a year-round resort destination. It has developed a variety of lodging types and used creative approaches with builders during the variety of economic cycles it has encountered. With the approval of an amendment to the master plan that integrates a recent acquisition, plans are underway to develop a pioneering village-to-village ski experience, a concept enjoyed by skiers in Europe, which will be the first of its kind in the United States. THE SITE AND DEVELOPMENT PROCESS The U.S. Forest Service targeted Beaver Creek as a ski resort site in the late 1960s. Interstate 70 had been completed through Vail Pass and beyond, and the Eisenhower Tunnel had opened, improving access from Denver, 110 miles away. Beaver Creek had nearly a perfect location, size, and orientation for a first-class ski area. It had broad north-facing slopes dropping 3,350 feet to the mountain's base, then flattening into a gentle stream valley, with ridges affording spectacular views. The valley ran north and south with the mountain rising to an elevation of 11,500 feet on the southern end. Vail Associates began planning Beaver Creek in It purchased the site from a sheep rancher in 1973, two years after starting preliminary planning. Its goal was to make Beaver Creek the site of the 1976 Winter Olympic Games. While it was thwarted in this goal by the Colorado voters who voted down the Olympics site, the vote turned out to be to Beaver Creek's long-term advantage. Without the pressure to build for an Olympics deadline, the resort could take the time to develop in a more thoughtful and environmentally sensitive manner. In 1976, the Forest Service approved Beaver Creek's ski area permit, subject to annual review, and the following year gave a green light to the plan. In 1978, after seven years, 52 different state and federal licenses and permits, and an estimated $7 million spent on planning and design, Beaver creek's planned unit development (PUD) master plan was approved. Construction began in Beaver Creek in 1978, seven years after initial planning had begun. By the end of the 1985 season, the resort's ski facilities were about 55 percent completed, with 670 acres of trails completed. Eight chairlifts were in place, ranging from 1,200 to 6,850 linear feet. Beaver Creek was one of the first resorts to install a high-speed, detachable-quad chairlift with an hourly capacity of 2,800 skiers. This lift cut the ride time from the village to the ski areas by more than half. The older lift was relocated to open a new zone of ski terrain. The resort's skiable terrain is now approximately 70 percent completed, and 85 percent of the dwelling units have been built. Only a few development sites are left, and almost all of these are now under construction. Beaver Creek has just completed a major revision to its original master plan to accommodate its final buildout and to integrate the plan with a recently acquired 839-acre adjacent parcel. The original masterplan included an area called Upper Bachelor Gulch. The lower portion of Bachelor Gulch was owned by the adjacent resort of Arrowhead, and Vail Associates acquired this area and the existing ski areas of Arrowhead in late The revised plan will connect the Arrowhead resort with the Beaver Creek resort via ski trails through Forest Service property, which Vail Associates has leased. A third village between these two, called Bachelor

3 Gulch, will be added. Its lodges will be similar to the typical national park lodges. The result will be a three village ski area. The revised plan also addressed two other objectives: solving Beaver creek's pedestrian access problems caused by slope and elevation changes in the village, and energizing the village by developing new projects that will provide gathering places and bring a sense of community to Beaver Creek. A joint venture project between Vail Associates and East West Partners, called the Village Center, will complete Beaver Creek Village. The plans, with an estimated project cost of $75 million, call for a new ice rink patterned after the Sun Valley Ice Arena, along with about 20,000 square feet of retail shops, covered alpine escalators similar to ones used in European ski areas, a new transit center, and several condominium projects, including a Disney Vacation Club. The plans also call for a 500-seat performing arts center to accommodate concerts, dance, movies, theater, and the visual arts. Development of a portion of this project, consisting of 150 residential units and 20,000 square feet of retail space, was underway as of early Beaver creek's daily ski capacity at completion was originally projected at 9,000, compared with Vail's 12,000. With the addition of Arrowhead and Bachelor Gulch, it is now projected to be 11,000 at completion. The resort community has been developed as a year-round resort as well, with facilities for summer activities, including numerous tennis courts, riding stables, lakes for fishing, and an 18-hole golf course. This approach offered financial benefits by extending the resort season and adding value to residential property, and was a concept in advance of its time. MASTER PLANNING AND DESIGN Visitors enter the resort at the mouth of the valley. Day visitors park in surface lots near the entrance and are shuttled to the ski area about two miles up the valley. With the valley floor devoted to the golf course and with limited housing development along the fairways and on overlooking slopes, the high-density resort core nestles between prominent open spaces. This contrast between the village cluster and surrounding space is highlighted by the absence of large surface parking lots. Under the ski school area at the mountain's base is an 18-foot truck service corridor and a 375-space parking garage. Most buildings in the resort core are multiuse structures with ground-floor retail space and accommodations above. The mountain has 3,350 feet of vertical drop; the village is at an elevation of 8,150 feet and the highest ski area at 11,500 feet. The master plan calls for about 50 percent of the slopes to be designed for intermediate skiers, 25 percent for beginners, and 25 percent for experienced skiers. This latter area is isolated from the other slopes. Originally the resort had limited advanced terrain, but this situation was remedied with the addition of ski areas at Grouse Mountain in In addition, Beaver Creek offers 20 kilometers of groomed cross-country ski tracks at McCoy Park, reachable via a chairlift from the base area. Advanced cross-country skiers can telemark their way down to the resort village. The resort's original master plan was developed as a planned unit development and included 3,223 dwelling units at gross densities ranging from 1 to 26 dwelling units per acre. Only about 275 single-family homesites were planned, and 380,000 square feet of commercial space was approved for a resort core at the mountain's base, where 70 percent of the units were planned. Designing the 18-hole golf course in the narrow mountain valley without creating an undesirable alley effect was difficult. The clubhouse was sited near the resort core, and the holes were strung down the valley in a narrow loop. Golfers play out nine holes and back nine holes and in the process descend and climb about 450 vertical feet. Rather than allow residential development adjacent to the fairways a typical design solution to maximize fairway site values the developer permitted only a small area of large-lot single-family homes to share the edge of the fairway with a heavily wooded creek bed, making the houses less visually obtrusive. The more valuable residential lots are those that are "ski in-ski out," the equivalent of beachfront lots.

4 The overall design concept was spelled out in 75 pages of design regulations. The guidelines aimed to encourage architecture and outdoor spaces that, from a distance, would appear as a unified, almost indigenous, mountain village, with simple, strong, and understated forms. They provided detailed prototypes and guidance on architecture, including roof forms, exterior wall materials and colors, fenestration, walls, and fences. The design combined the simple forms, pitched roofs, and native materials of early valley structures with a European alpine feel. The site planning and landscape design were treated in similar detail. The spatial organization, circulation, and land use patterns of the resort reinforce the alpine village theme. MANAGEMENT AND FINANCING Vail Associates is currently owned by the Apollo Ski Company, a Wall Street investment group. It developed the resort community with a combination of private and Metropolitan District bond financing. The bonds paid for much of the infrastructure, such as water, storm sewer, and roads, and the bond issue is repaid by property owners through their property taxes. Lots were sold to builders and developers. The original projection was that in the early years of the resort, 75 percent of the skiers would be day skiers, not overnight guests to the Vail Valley. Once Beaver Creek was completed, the projection was that this percentage would drop to only 20 percent, similar to Aspen and Vail. This projection has been realized. Approximately 75 percent of skiers in Beaver Creek are now overnight guests to the Vail Valley, a combination of international, out-of-state, and overnight Colorado guests. Approximately 25 percent are day skiers. Developer revenues come primarily from land sales, ski and food service income, property management fees, rental property reservations income, and fees from leased retail space. Vail Associates owns one of the four hotels in the resort as well. In recent years, with little land left for development, Vail Associates has plowed much of the revenue back into improving the resort. Property management fees and reservations income result from management of the pool of units made available for rental by property owners. Keeping a sufficient number of rental units in the pool has been an ongoing dilemma for the resort. Rentals are essential for maintaining ski income, which is necessary to maintain the resort's high standards. Empty beds do not produce skiers. Many owners, however, do not need rental income and prefer not to rent their homes. The resort has had to watch carefully the mix of single- and multifamily units to maintain an adequate supply of rental units. The mid-priced and multifamily units are the ones most likely to rent, but it is difficult to build these or keep costs per unit under $400,000, because of very high land costs. Property values have risen dramatically over the life of the resort. Prices typically range from $500,000 for a condominium unit to as much as $5 million for a home on a ski in- ski out property. The lowest-priced unit currently sells for $350,000. To help maintain a sufficient supply of rental units, Beaver Creek has implemented a creative approach to working with builders of condominium and townhouse units. Vail Associates is involved in all aspects of planning, down to review of floor plans, to make sure that what is built is what the resort needs. The deal with the builder involves a "look-back" provision: the price the builder pays Vail Associates for the land is calculated at 15 percent of the estimated sales price of the unit. If the unit sells for more than the estimated price, which commonly occurred in boom periods, 15 percent of the excess sales price also goes to Vail Associates. Properties developed by Beaver Creek in the resort core area are also a source of property management fees. While upstairs residential units were sold as condominiums, ground-floor retail was retained by Vail Associates. Early in the resort's life, because of the time it took to reach critical mass sufficient to maintain a lively retail core, Vail Associates preferred to retain resort ownership and control of the retail, which allowed it the flexibility to provide the retail mix necessary to support the resort's ambience. EXPERIENCE GAINED

5 Beaver Creek Resort provides an excellent example of how careful and flexible initial planning can see a resort successfully through a series of economic cycles. Beaver Creek's master plan did not require a major amendment until almost 20 years into its life. At this juncture, the interests of the developer, Vail Associates, needed to be balanced against those of both the Beaver Creek homeowner association and surrounding county residents. Through careful communication, participants found solutions that preserved the initially determined density, but that provided Beaver Creek the flexibility to move that density to other locations in a manner that met its goals and vision. Beaver Creek continues its success as a resort community in part because it plows back a great deal of the revenue into improving the ski areas and the ski experience. It invests heavily in the most current snow making and grooming equipment and ski lift equipment. It introduced quads very early, for example, eliminating long queuing times. It also has benefited from having a well capitalized owner in Apollo Ski Company. Vail Associates has maintained a hands-on approach in the disposition of its residential and commercial parcels to make sure that what is built at Beaver Creek enhances the overall resort and improves its bottom line in terms of potential ski-related revenues. It has paid great attention to detail in facilitating a cohesive architectural style that creates a specific mountain ambience. It is important to be proactive in working through the problems in providing housing for ski personnel in an area where employees are often priced out of the housing market. The best employees are attracted to a resort with a high-quality employee housing and amenity package.

6 PROJECT DATA 1 LAND USE INFORMATION Site Area: 2,777 acres Total Dwelling Units Allowed: 3,223 Total Dwelling Units Planned: 2,083 Total Dwelling Units Built: 1,791 Gross Density: 0.9 dwelling units allowed per acre Average Net Density: 0.2 dwelling units allowed per acre (net of golf course, open space, roads) LAND USE PLAN Acres Percent of Site Low-density residential Medium-density residential High-density residential % Resort commercial Resort services Golf course Open space 2 2, Roads Total 2, % RESIDENTIAL/HOTEL UNIT INFORMATION Unit Type Units Planned/Built Current Price Range 3 Condominium/townhome 1,187 / 1,033 $200-$700 per square foot Single-family/cluster home 204 / 166 $400,000-$1,600,000 per lot Hotel room (four properties built) 471 / 471 $100-$400 per day Timeshare (three properties built) 221 / 121 $1,000-$35,000 per interval week Total 2,083 / 1,791 DEVELOPMENT COST INFORMATION (TO DATE) 4 Site Acquisition Cost 9,100,000 Site Improvement Costs Water $5,600,000

7 Roads/storm sewer 7,500,000 Communications 1,800,000 Fire station/equipment 800,000 Total $15,700,000 Construction Costs Incurred by developer $ 72,400,000 Incurred by others 466,000,000 Total $538,400,000 Ski Area Development Costs Trails, lifts, snowmaking $34,800,000 Lodge (for skiers only) 8,000,000 Total $42,800,000 Golf Course Development Costs Construction and irrigation $2,500,000 Clubhouse 2,300,000 Total $4,800,000 Total Development Cost (to date) $610,800,000 Notes: 1 The information provided in this data box covers only the original Beaver Creek land plan, and does not reflect any of the acreage, units, or costs involved in the recent acquisition of the Bachelor Gulch parcel. The Bachelor Gulch parcel includes an additional 839 acres that has been approved for 795 dwelling units. Only an estimated 600 units are expected to be built. 2 Includes a portion of Beaver Creek Ski Mountain. This portion contains on-mountain recreation lodging facilities, mountain restaurants and picnic decks, and private club/restaurant facilities. 3 Note that the ranges include both off-season and high-season rates for hotel and timeshares. Also, ranges are large because of variety of home options. 4 Some costs are developer estimates. DEVELOPMENT SCHEDULE Site Purchased: 1973 Planning Started: 1971 Construction Started: 1978 Sales Started: 1977 First Closing: 1978 Estimated Completion: 1999 DIRECTIONS From Vail/Eagle Airport: Take Interstate 70 east about 30 miles. Driving Time: About one-half hour.

8 From Denver International Airport: Take Interstate 70 west approximately 135 miles to Beaver Creek Resort. Driving Time: About two-and-one-half hours. The Project Reference File is intended as a resource tool for use by the subscribers in improving the quality of future projects. Data contained herein were made available by the Development team and constitute a report on, not an endorsement of, the project by ULI - The Urban Land Institute. Copyright 1995, 1997, by ULI - the Urban Land Institute 1025 Thomas Jefferson Street, N. W. Ste. 500w, Washington, D. C

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