AURORA | The fate of a 1,500-room entertainment complex in Aurora is in question after Gaylord Entertainment said today that its hotel brand had been purchased by Marriott for $210 million.
The purchase, which was made in cash, was announced May 31. The deal announced Thursday follows six months of reviewing options for its business. It will still own the four hotels it’s letting Marriott manage. By handing over day-to-day control of the hotels to Marriott, Gaylord expects to save between $33 million and $40 million a year.
The move puts in limbo plans for a massive $800 million project planned for Aurora.
Gaylord recently received incentives from both the state and the city to help fund the project. The state recently announced that it would allow the hotel complex to keep around $81.4 million, or $2.7 million annually, as part of a regional tourism project. The city agreed last year to give up to $300 million worth of tax rebates as well.
Wendy Mitchell, executive director of the Aurora Economic Development Council, said that despite the move by Marriott, the project would still move forward.
“We knew this was a possibility, we just didn’t know who or when,” Mitchell said. “As a result, Gaylord remains committed to Aurora, and the state of Colorado.”
Mitchell said, in effect, plans for the size and scope of the hotel wouldn’t change, only the financing methods.
Instead of self-financing the build-out, Mitchell said, Marriott might be looking for more outside investors to build the hotel.
“Which is how every other hotel in the world is built,” she said.
According to the Denver Post, a statement by Gaylord indicated that the company would revise its plan for the hotel.
“The company will adjust its investment approach on the Aurora … hotel and convention center. The company will no longer view large-scale development as a means of growth and will not proceed with the Colorado project in the form previously anticipated,” according to the newspaper.
Mitchell said the situation wasn’t as dire, adding that officials had been on the phone with executives and state leaders to ensure that plans were still in place.
“There have been 50 deal-breakers — serious threats — in this deal,” she said. “The good news is all the players want to make this work.”
Kathy Green, spokeswoman for the Colorado Office of Economic Development and International Trade said negotiations were ongoing.
“We have been and will continue to be in discussions with Gaylord leaders as they determine next steps. We will review any proposed changes with the Economic Development Commission and proceed accordingly.”
Mitchell added that it would be up to the state and local leaders to ensure that the deal comes to fruition.
“It’s our deal to either win or lose at this point,” she said.
Will wonders never cease, “every other hotel in the world is built with outside investor.” Why in the world would Aurora Economic Development ask Aurora to give up every cent of all future revenue streams from Aurora, Adams County, and the Brighton School district if that was not the industry standard.
Or, even a better question: Why would Aurora’s City Council Members be a party to a new way to finance hotels that eliminates the need for venture capitalists?
What a story the city and the ARDC wove. Is a new story coming lauding their creativity, inventiveness, and their concern for Aurora’s citizens.
Regardless of past plans and commitments, having Marriott head this acquisition is a good thing for all. Their power, expertise and international property management record is a paramount plus. I feel having Marriott involved will insure that we will not have a fiasco at the Gaylord cite, as well we will have an assured budget conscious build there.
The other added plus is of course the job factor, having Marriott there will insure an economic surge to the city of Aurora, and it’s citizens.
It should be noted that this story is incorrect. Gaylord Entertainment was not purchased by Marriott. Marriott only purchased the Gaylord Hotels brand and operating rights for Gaylord’s 4 big-box hotels. Gaylord is being reorganized into a real estate investment trust.
Also, Marriott has first negotiation rights to run any facility Gaylord would own in Aurora, but otherwise has no involvement in the Aurora deal.