The brutal economy is leaving no stone unturned and no industry untouched—including commercial real estate, which has hit the hotel and resort business fast and hard. The hotel industry has suffered some devastating blows, such as the historic Fontainebleau in Miami facing foreclosure and wobbling in limbo for months, and now Aspen’s Hotel Jerome is completely knocked out. The special landmark has been offering guests a luxurious stay in the heart of downtown Aspen since 1889 and was at one time, a celebrity hotspot. Now, the hotel is going to be auctioned.
An investor, Jerome Property, bought Hotel Jerome’s mortgage in September and almost immediately started foreclosure proceedings. The foreclosure filings, disclosed by entity Jerome Property LLC, cited that the owners of the hotel failed to pay the mortgage’s $36.3 million balance. This filing was documented on September 24, and the hotel auction is scheduled for January.
The Victorian-style 94-room hotel opened its doors during the Colorado silver boom. During that time, Hotel Jerome found immediate acclaim, as it was one of the only buildings west of the Mississippi River to be fully lit with electricity. Originally financed by silver-mine investor, James Wheeler, several different individuals have owned the hotel; the county even had possession for a few years around 1900, when it was seized after an owner failed to pay taxes. During the 1950’s the hotel was graced by the presence of some big celebrities. John Wayne, Gary Cooper, Lana Turner, and Hedy Lamarr are just a few of the famed guests.
Elysian Worldwide LLC and Lodging Capital Partners LLC purchased the hotel in 2007. Morgan Stanley Mortgage Capital Inc., with a $48 million mortgage, financed the deal. Both companies’ headquarters are in Chicago and Vail Resorts Inc.’s RockResorts was chosen to manage the hotel. In a recent statement by Elysian partner, David Pisnor, he said both Elysian and Lodging Capital are “committed to RockResorts management and the Hotel Jerome. We are currently in discussions with out lenders to avoid foreclosure.”