DENVER — A state economic official and an RBC broker told the Colorado Economic Development Commission Wednesday that a bond transaction to facilitate the sale of the Stanley Hotel in Estes Park could close within the next few weeks.
The complex and at times precarious deal, which would see Grand Heritage Hotel Group turn ownership of the iconic hotel over to the Colorado Educational and Cultural Facilities Authority, is necessary, state officials and hotel management say, to complete development of the Stanley Film Center, a long-planned but notoriously stubborn-to-build facility that will celebrate the horror genre inside the lodge that inspired Stephen King’s “The Shining” novel.
But first, the state’s brokers must market and sell roughly $425 million in bonds.
Recently there have been “several promising developments related to the transaction,” which has been in the works for well over a year, Jeff Kraft, deputy director of the Colorado Office of Economic Development and International Trade, told the EDC.
“The transaction has never gotten this far in the past. The bond is being publicly marketed. (Brokers with RBC Capital Markets are) actively looking to sell various tranches of the bonds to the buyers, talking to many potential investors,” he said. “They’ve even been holding some in-person tours of the Stanley for investors, so they can really see what a special asset it is.”
Encouraging trends in the bond market “positively impact the ability to sell this project,” Kraft said. “So if that continues, it gives us a real chance to have this offering be priced as soon as tomorrow and move towards closing within a couple weeks.”
RBC Capital Markets director Michael Persichitte told the EDC that the brokerage is “feeling very good” about its ability to sell the bonds to “large qualified institutions and institutional credit investors.”
In early April “we saw a lot of volatility in the marketplace,” resulting in deals being tabled, he said. But “in the last week or so, we’ve had transactions starting to come back to the marketplace.”
The roughly $70 million Stanley Film Center project began in 2015 with a jumpstart in the form of millions of dollars in Colorado Regional Tourism Act incentives. Development of the museum and interactive film center, which has received several more public-financing boosts over the years, has been hampered by construction delays, cost increases and the COVID-19 pandemic, which essentially shut down the hospitality industry for several months in 2020.
Once complete, the Stanley Film Center will be “a two-story building with approximately 64,735 square feet, to include an approximately 864-seat outdoor amphitheater with a fire capacity of 1,200 (including standing room), an event center, a film museum, a sound stage and related amenities, to be constructed adjacent to the main hotel building and connected to the concert hall,” according to state documents. The project also includes the addition of “more guest rooms and building a new guest entrance to take in more guests and further support the success of the film center.”
Saunders Construction Inc. is the Stanley Film Center’s general contractor, while Blumhouse Productions LLC, the juggernaut production company behind horror films and franchises such as “Get Out,” “Five Nights at Freddy’s,” “The Purge” and “Paranormal Activity,” will serve as the film center’s exclusive exhibit curator.
Here are the basics of the deal Grand Heritage has truck with the state, a transaction framework that has evolved several times since its inception:
CECFA, through a subsidiary called SPACE LLC (Stanley Partnership for Art, Culture and Education), plans to issue approximately $425 million in bonds that the authority says “will be used to retire existing debt for the Stanley Hotel campus, purchase the property and make renovations to the hotel to support future programming.”
At that point, CECFA will take over ownership of the 116-year-old, 140-room Stanley Hotel from Grand Heritage Hotel Group, using revenues from the hotel to fund future public-benefit projects. Denver-based Sage Hospitality Group will assume management of the property after Grand Heritage sells.
However, the “bond transaction stands on a razor’s edge of success or failure and requires restructuring and concessions to be successfully executed and sold on the market,” according to state documents.
Grand Heritage has agreed to a concession that converts its $52 million equity stake in the Stanley into junior bonds “whose principal and interest are only paid from residual project revenue each year after all other obligations are met,” state documents show.
This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2025 BizWest Media LLC.
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