As I explained yesterday to a friend here in Pagosa — a friend who is supportive of the proposed “Urban Renewal Authority” tax incentive scheme to promote further development of the Springs Resort — my job at the Pagosa Daily Post, from our beginnings in 2004, has been to share “the other side of the story” that is rarely heard in the halls of government. We started the Daily Post because we felt Pagosa’s weekly newspaper was more than happy to quote anything and everything professed by local elected officials, but almost never gave local readers a well-rounded perspective regarding government decisions.
We believed that ‘balance’ was a healthy thing in a little mountain town. We already had a newspaper that presented the viewpoint of the local leadership — the local powers-that-be. The goal of the Daily Post was to dig into the facts, and discuss publicly the facts that get ignored in government board meetings.
We still believe ‘balance’ is a good thing.
According to the Archuleta County Assessor, the Springs Resort on Hot Springs Boulevard was purchased by EPR Springs Holdings LLC for $42.5 million on June 28, 2018. The 2018 EPR Annual Report, however, describes things slightly differently on page 41:
On June 22, 2018, we acquired a recreation-anchored lodging property located in Pagosa Springs, Colorado for approximately $36.4 million. The property is a natural hot springs resort and spa on approximately eight acres and is subject to a long-term, triple-net lease.
$42.5 million? Or $36.4 million? I’m fascinated that these two numbers could be so… different? Perhaps the difference is due to “a long-term, triple-net lease.” Whatever that is.
At any rate, here’s an excerpt from a press release posted on the Presidian Hotels website on June 28, 2018.
Presidian Hotels (‘Presidian’), a full-service hotel management company based in San Antonio, Texas, announced today that it has taken over management of the renowned Springs Resort & Spa located in Pagosa Springs, Colorado. Presidian’s Chief Executive Officer, Charles Leddy, made the announcement…
…The resort will continue operating as the Springs Resort & Spa. “My family and several of our leaders vacation in Pagosa Springs annually,” says Charles Leddy. “We consider it a great responsibility and honor to be stewards of this irreplaceable resort for the benefit of the Pagosa Springs community and the many visitors who come here annually for adventure, nature and retreat.”
Chip Young, Presidian’s Chief Operating Officer, will be taking lead at the Springs Resort & Spa during the management transition. “There are so many talented and committed associates here at the Springs Resort, so my job is going to be a lot of fun,” says Mr. Young. “The natural beauty of this place is remarkable. We couldn’t be more excited to get started.”
Apparently, “getting started” meant a search for taxpayer subsidies to help fund a massive expansion project.
At some point over the following months, an ambitious young developer named David Dronet became a managing principal at the Springs Resort, and we soon began hearing plans for the expansion of the resort onto adjacent property owned by Pagosa philanthropist Jack Searle.
I choose to refer to Mr. Searle as a philanthropist — even those he’s also a geologist who has made a considerable fortune dealing in oil and gas royalties in Ohio. As Mr. Searle might tell you, he doesn’t make money in Pagosa Springs — but he has spent a good deal here, supporting various charities, non-profits, and community-minded economic efforts, such as a tentative plan to build two dozen affordable housing units behind the Pagosa Lodge.
Mr. Searle and I share an active interest in affordable housing, and we’ve traveled together to other communities looking for solutions to the Pagosa crisis. I know Mr. Searle as one of the most optimistic people in the community. He knows me, I’m sure, as one of the most skeptical. I also know Mr. Searle as a basically honest, straightforward guy.
Mr. Dronet, I know very little about, and I suspect the Town Council and the community in general also knows very little about him. He has been working at the Springs Resort for about one year, I believe. I attempted to set up an interview with Mr. Dronet, prior to writing this Part Nine, but he declined the invitation. But I’ve attended four of his presentations, where he has promoted a massive development labeled “the Springs Plaza” to be partly funded by a $79.7 million tax incentive plan to include an expansion of the Springs Resort and possibly an adjacent complex of restaurants, stores, and offices. (You can download the ‘Economic Impact’ report funded by Mr. Dronet, meant to justify millions in future tax incentives.)
Not knowing much about Mr. Dronet, other than his rather short tenure in our community and his stellar sales technique as demonstrated at his various presentations, I’m left with my own research, as a starting point.
Mr. Dronet was involved in a few real estate deals in Albuquerque, prior to arriving in our ‘refreshingly authentic’ little town. The website Albuquerque Business First lists ten articles about Mr. Dronet’s business activities in that bustling New Mexico city. You can view the list here. The earliest article dates from 2007:
The photo shows a confident young Californian who had just inked a deal on a sizable property in downtown Albuquerque, with ambitious ‘urban renewal’ plans.
Three years later, Mr. Dronet and his company, Platinum Holdings LLC, lost the property to foreclosure. As we all know, many people with overextended credit lost properties to foreclosure in 2010. But most businesses weathered the storm. Platinum Holdings was apparently not one of them.
Two years later, Mr. Dronet was CEO of a different company: Corrales Senior Living LLC.
From the Albuquerque Journal, August 2012:
Corrales is the latest location to attract a multimillion-dollar construction project aimed at providing a continuum of care for the senior set. Albuquerque-based developer David Dronet of Corrales Senior Living LLC plans to break ground this fall on the first phase of a $60 million project to build a complex of private homes and health-care units with amenities such as a restaurant, fitness areas and gardens. The complex will be built on the 22-acre site on Sandia View Lane that was previously the campus of Sandia View Academy, a private school by the Texico Conference Association of Seventh-Day Adventists.
“This is a very big deal for Corrales,” said Mayor Phil Gasteyer, adding that the project could boost town gross receipts tax revenues and bring jobs. He said zoning and site plan approvals are in place.
Corrales Senior Living is close to completing financing arrangements for the $44 million first phase, which will consist of five buildings totaling 170,000 square feet on 15.5 acres, Dronet said in an email.
The final posting on the Corrales Senior Living Facebook page is dated March 11, 2013.
The company website gives a “cannot be found” message in my browser. I’m uncertain what happened, but I assume the project failed to find the necessary financing.
No one said development of ambitious ‘urban renewal’ projects is easy. But we can probably agree that “looking at the future is a great way to start the week,” if your $60 million project has just folded.
An ambitious young man like David Dronet has no doubt accomplished other things in the six years since the Corrales disappointment. For one thing, he has moved to Pagosa Springs to become the managing principal at the Springs Resort, promoting a $79.7 million tax incentive plan that would purportedly triple the size of the resort.
Will the Town Council go for his sales pitch? Even if the sales pitch has no marketing study to support it?
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.