Construction on RH Guesthouse Still on Vacation

Aspen

Though the RH Guesthouse in Aspen at the Historic Crystal Palace project has languished into yet another month with little noticeable progress, its building permit remains active, a city official said last week.

Ever since mid-June, work done at the 300 E. Hyman Ave. job site has been limited to exterior wall weatherproofing and siding repair, and that’s been about it.

The hotel was once billed to be opening in September 2021. Now, it won’t be until at least February until anything significant happens on the site, said people knowledgeable of the project. RH and developer Mark Hunt are collaborating on the hotel.

Part of the delay is due to the project team’s seeking new interior changes to the building’s upper floor, which would need city approval.

“The property owner chose to suspend work,” said Amy Simon, city planning director, in an email Thursday responding to an Aspen Times question about the project’s status. “The City can’t speak to why that decision was made other than that we are aware they want to revise aspects of their approvals.”

In 2018, Hunt received approval to build the 20-room hotel, along with a spa, fitness center, pool, restaurant, cafe and a rooftop terrace.

Construction began in 2019 at the 9,000-square-foot lot where the Crystal Palace operated from 1957 until 2008. The two-story building’s historic brick wall facing Monarch Street, featuring the Owl Cigar mural, remains intact, but the rest of the structure was demolished. So far, the 26-foot-deep basement has been excavated on the site, with the full-scale development calling for two full stories and a recessed third story.

“After a few months of discussion about how to keep their proposed amendments within the land use code allowances for the project, they have been given an ‘OK’ and are in the process of submitting plans to re-start permit review,” Simon said. “The Building Department has determined that their contact with our offices is sufficient to have kept their originally issued permit in good standing and eligible for Change Order submittal.”

Project general contractor Centaur also is fading out of the picture with GF Woods tapped as its replacement, sources said. Contacted last week, both project manager Brad Hirbar, of Centaur, and Greg Woods, of GF Woods, declined to comment.

“We cannot provide an estimate for when the Change Order might be issued or when construction will restart, other than to say that progress may not cease for longer than a six month period or the permit will be expired,” Simon’s email said.

It was around this time last year — Jan. 5 — that RH announced its vision for an “Aspen Ecosystem.” The Corte Madera, California-based company, formerly known as Restoration Hardware, said the Aspen project would be the first of its kind, complete with a gallery, restaurant, hotel, residential and worker housing projects.

Three Hunt-controlled LLCs, each of which RH has at least 50% membership interest, are behind the development of the ecosystem. The LLCs were created for “the purpose of acquiring, developing, operating, and selling certain real estate projects in Aspen, Colorado,” according to an RH public filing. RH initially invested $99.2 million with a commitment of up to $105 million.

“As we do not have a controlling financial interest in the Aspen LLCs but have the ability to exercise significant influence over the Aspen LLCs, we account for these investments using the equity method of accounting,” according to RH’s annual report filed March 30, 2021.

And in the third quarter of fiscal 2021, RH “purchased an additional 20% interest in one of the Aspen LLCs, which continues to be accounted for as an equity method investment,” the company stated.

In addition to the old Crystal Palace location, other plans for the Aspen Ecosystem include the RH Residences at the historic Boomerang Lodge and the RH Residence on Red Mountain.

GF Woods also is the general contractor on the RH Design Gallery project at the corner of Galena Street and Cooper Avenue. The Bidwell building there was torn down last year.

“Right now, we’re in the middle of excavation, and the earth-retention system is being installed,” Woods said. “That work is going well and is slated to be done in early February, and then we’ll transition to the foundation aspects of the job.”

For now, RH and partner/developer Hunt aren’t talking publicly about the status of the RH Guesthouse.

RH is publicly traded, and its fiscal year goes through the end of January.

“We have not formally announced timing for the opening and are unable to comment on construction details,” said an RH spokesperson in an email response to a query from The Aspen Times.

Hunt is also quiet. Linda Manning, of Hunt’s M Development, said through an email “that we have no comment at this time.”

Principles with project planner Bendon Adams, of Aspen, also declined to comment, referring questions to Manning.

Comments earlier this year from RH’s top executive, as well as references in public filings, projected a fall 2022 opening. Those statements were made, however, before the July construction suspension brought on by unpaid encroachment fees, which Hunt paid back to the city.

“We are planning to open our first Guesthouse in New York City this fall, followed by our second Guesthouse in Aspen, which will include our first RH Bath House & Spa, in the fall of 2022,” RH CEO Gary Friedman said in a fourth quarter report for 2000, also a letter to shareholders, filed March 24, 2021, with the SEC. “We are currently in design development for our first RH Residences as part of our larger Aspen ecosystem and have already received multiple unsolicited proposals to purchase the homes sight unseen, and to place deposits to reserve a home. We believe the revolutionary design of both the Guesthouses and Residences have the potential to create entirely new markets in their respective industries, while also positioning RH as a thought leader, taste, and place maker.”

RH also was sticking to the latter half of 2022 for the hotel’s opening in an 8-K report filed June 9.

“We will also be unveiling our first RH Bath House & Spa as part of our Aspen Guesthouse scheduled to open in the second half of 2022, as well as other exciting spaces we will be revealing over the next several years,” the company said in the filing.

By: Rick Carroll I  The Aspen Times  I January 9, 2022


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