The money trail from Battle Mountain in Colorado

Land deal near Vail and a new, private ski club in San Juans

 by Allen Best

This story will eventually find its way to the new, private ski area in the San Juan Mountains of Colorado but it starts at least in the 1980s when Jim Aronstein, a lawyer in Denver, began working with associates to buy old mining claims on Battle Mountain. The mountain is between Vail and Red Cliff, with the picturesque mining town of Gilman overlooking the Eagle River on one of its shoulders.

The claims had been staked, at least some of them, in the late 1870s by prospectors who had spilled over the Continental Divide from the fabulously rich trove of silver ore called Leadville. In Aspen, the spill-over produced another fabulously wealthy community. On Battle Mountain, the minerals were more sparse but still enough to sustain mining operations until 1979. Then, the toiling for zinc, gold, silver, and other minerals deep within the bowels of Battle Mountain finally ended and, in 1985, on my first week as a reporter in Vail, the post office in Gilman was retired and the final residents vacated their company homes. It was my first story for The Vail Trail, a newspaper that, like the mine, is now defunct.

The mining claims came cheap, often just for back taxes. With his partners, Aronstein assembled more than 5,000 acres of property within the White River National Forest. Many had—and still have—wonderful views of Holy Cross and other peaks in the Sawatch Range. And the land, incidentally, isn’t all that far from what has become Blue Sky Basin, as Aronstein no doubt recognized. Just a mile separates the two.Battle Mountain

Vail Associates, as the company now known as Vail Resorts was then called, quietly bankrolled Aronstein’s team and began plotting what-might-be’s: a private ski area and high-end real estate, both in price and, with elevations up to 11,000 feet, with thin air.

Andy Daly, who was at the helm of the ski company for part of that time, said Vail got involved to protect its interests.

“We wanted to protect our south side and control, as best we could, the nature of the development that would occur in the area, with a very specific goal of ensuring that there would not be any connection between Hornsilver (as the project was called) and Vail,” he says.

“We didn’t want someone else doing a development that might jeopardize the reputation of Vail Associates.”

One problem for the project, he said, was the absence of necessary water.

Vail ultimately walked away from that deal, sparking angry words from its former partners. Aronstein, in turn, got the property and found somebody else who wanted to do the real estate play. He found his mark in a Floridian, Bobby Ginn, who bought the 5,457 acres for $32.5 million.

The money trail

Aronstein took his money in 2005 and invested it in a new vision of paradise, sort of a Yellowstone Club in the Rockies. Called the Cimarron Mountain Club, it consists of 1,750 acres of former logging property located in a northern tip of the San Juan Mountains, in the Cimarron River Valley, between Ouray and Gunnison. It’s an hour away by car from Gunnison or Montrose or 8 minutes away by helicopter from Montrose. The website describes the property as “wilderness.”

A few years ago, explained The Denver Post in a January story, Aronstein began recruiting participation from others in the high ranks of the Colorado ski industry, including Johnny Stevens, who ran Telluride for 33 years, who became general manager; and John Norton, who had been a classmate of Aronstein’s at Dartmouth.

Norton, of Crested Butte but formerly of Aspen, became a conduit for a number of other Aspenites to participate in land-use planning, marketing and architectural design.

As of early April two of the 35-acre lots had been sold. No lifts are contemplated, although that can be changed.

One of the better stories about the project has been by Madeleine Osberger of the Aspen Daily News, who talked with Norton. After being approached three years ago by Aronstein, Norton went to study the site with a critical eye. What he saw, he said, caused him to reconsider: plentiful and naturally gladed terrain left over from a logging company’s timber clearing. Now augmented by other timber clearing, the Cimarron club has 60 runs amid 1,200 acres of skiable terrain.

Access will be limited, during winter, to snowcat, snowmobile, and heavy-duty, four-wheel-drive vehicles fitted with skids.

But does this make business sense? Osberger notes that North American has many private ski areas, the majority of them clustered in the eastern United States, including New York state, and around Quebec.

Better known is the Yellowstone Club, which can best be described as a real estate development attached to a ski area (Montana’s Lone Sky). It has, of course, had a turbulent history, although Osberger reports, via skicurbed.com, more than $1 billion investment since 2012 after reorganization by CrossHarbor Capital Partners. There are 500 members, including Hollywood and Silicon Valley royalty. The total club membership is capped at 864 households.

But does Aronstein’s parcel of paradise in the San Juans make sense? Club memberships range from $2.7 million to $3.8 million, and annual dues begin at around $50,000.

Michael Berry, president of the National Ski Areas Association, told Osberger that there’s a big difference between joining a club and investing in a private real estate development that might have a ski area as part of it. Cimarron is the former, and Berry suggested it’s when the master developer eventually runs out of inventory to sell that the project’s financial model can be tested. “Then the question becomes, are the property members, ergo the members of the club, able to sustain it?”

Osberger’s story left that question unanswered, although statements by Norton suggest that investors will indeed need very deep pockets. Houses in the club cannot be rented out. “You can’t Airbnb the place,” Norton said. Cimarron Club is intended to be just that, not a commercial enterprise.

Daly says he was a resource of Aronstein but just for a short time and now has no involvement. “It’s a beautiful piece of land,” he said. If limited, “the skiing is wonderful.”

Battle Mountain aspirations

Now, back to Battle Mountain, which Aronstein and his partners sold to Bobby Ginn. With no experience in mountain real estate but a string of successes in the American Southeast, Ginn went to work and dreamed big: a little ski area on Battle Mountain, a hotel at the base, a gondola connecting them. He went to Minturn to be annexed, and got voter approval.

The mountain real estate market then, in 2005-2007, was doing backflips. Anything seemed possible even if experienced real-estate developers in the Vail area said the market economics could not possibly justify the massive investment in infrastructure required to deliver product to the market.

They were right. When the market swooned, Ginn went bankrupt, and the development teams assigned by Ginn’s lender, Philadelphia-based Lubert-Adler, a private equity firm, retreated from the ambitious plans.

Minturn Main Street

All traffic in Minturn funnels through one narrow, winding two-lane street that doubles as a federal highway called U.S. 24. Photo/Allen Best

Tim McGuire arrived in Minturn about a year ago to represent Crave Co. He found the infrastructure costs to be challenging. One example: pumping water up 2,000 feet to homes and accommodating sewage droping 2,000 feet to the valley floor were just two examples of the project-halting infrastructure costs.

Instead, McGuire went for a land exchange with the Forest Service, retained Tom Glass of the Western Land Group, seeking low-lying lands near the original town.

He pitched the housing being contemplated as an answer to the Eagle Valley’s affordable housing pinch. Not much product is available for under $500,000 and $600,000, he told MTN in an interview in February. He said 30 percent of the housing would be in the range of $200,000 to $500,000, in the context of the Eagle Valley “affordable.”

“Our initial focus would be on the affordable locals’ market, but you need to have a diversity of product,” he said. The housing would be limited to a few hundred acres, he said.

The Forest Service said no to the original proposal, but even a revised land exchange, one sparing the most treasured among public lands, drew angry rebukes from area residents.

“Many of us are very concerned about the impacts to our lifestyle and community. We are currently about 500 homes, the company is proposing to open the doors to over 1,000 additional units,” long-term resident Linda Osterberg wrote to MTN.

Minturn has troubles just as it is. In the mid-1980s, not long after the Eagle Mine shut down, the town still had a hardware store, a grocery store, and other basic retailers. They’re gone. Restaurants survive, but they also seem less lively than they were in the early 1990s and I was putting out newspapers in what was audaciously called the International Trade Center.

Willy Powell, the interim town manager and formerly the Eagle town manager, says that the blossoming of Edwards commercial district, about 10 miles away, has drawn away some of Minturn’s customers.

“It has sucked the vitality out of a lot of places,” he says.

The Forest Service has said it will not entertain any proposal for a land exchange unless Minturn and likely Eagle County both support it, reports Powell.

Crumbling remains of the mining town of Gilman can be seen form U.s. 24 south of Minturn. Photo/Allen Best

Crumbling remains of the mining town of Gilman can be seen form U.s. 24 south of Minturn. Photo/Allen Best

Crave is now looking at what might be possible. The thinking seems to center on land along the valley floor, around an area called Bolts Lake, just south of the existing town and close to the old mine workings. The Forest Service also has land in the vicinity, as well as on the adjacent hillsides.

“We have seen no plans to date,” says Powell.

The general question is whether the community would accept a certain level of development. What is the density that can be accepted? And what would be the impacts to traffic on Highway 24, which doubles as the narrow main street for Minturn in the tightly constricted valley.

“That is one of the chief concerns of people,” says Powell.

Does Crave need to figure out a density that will recouple the already considerable investment. McGuire says no.

“That money is gone. It is not going to come back. We are starting new, and we are hoping to work with the town. There isn’t any bottom line number that we are working from.”

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About Allen Best

Allen Best is a Colorado-based journalist. He publishes a subscription-based e-zine called Mountain Town News, portions of which are published on the website of the same name, and also writes for a variety of newspapers and magazines.
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One Response to The money trail from Battle Mountain in Colorado

  1. Chuck Curtis says:

    We’re lucky to have a journalist with Allen Best’s experience and talent. Allen can put a complicated story like this into a meaningful context thanks to his history in the area and his unrivaled list of ski resort contacts. What’s more, he’s a superb writer. The Pulitzer committee should open a category for “Rocky Mountain News” just so Allen could win it.

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