Harry Frampton has enjoyed a front-row seat to the sweeping evolution of Colorado’s ski resort and real estate industries.
His 1,250-employee East West Partners forged the Beaver Creek real estate market in the late 1980s and 1990s before moving on to a lonely patch of land along Denver’s South Platte River in 2000.
Since then, East West has built 1,300 homes around Union Station, developed 150,000 square feet of retail and office space. Since 1986, East West has developed and sold $7 billion in real estate in Colorado, Utah, South Carolina and Hawaii.
His Slifer Smith & Frampton real estate brokerage has more than two dozen offices, spread across Eagle, Summit, Pitkin and Garfield counties, including the recent acquisition of the Roaring Fork Valley’s 30-broker Palladium Properties brokerage, making it the largest resort real estate firm in the state.
His East West Partners recently joined Aspen Skiing and KSL Capital Partners in acquiring and developing the Snowmass Base Village, one of the largest ski resort real estate projects underway today. (East West also was recently tapped as the No. 1 large company in Colorado in The Denver Post’s annual Top Workplaces survey.)
Frampton is a lion in Colorado’s resort and real estate world. He’s seen the good times and the bad.
The Colorado Sun caught up with Frampton, the former chairman of the Urban Land Institute, at his tower-shadowed Union Station office and got him expounding on changing buyers, the shifting ski industry and how to solve the housing crisis in the high country.
The following interview was edited for clarity and length
The Colorado Sun: You ever just look out your window here and say I cannot believe what is going on here? This was a forgotten landscape when you guys first came here in 2000. Now it’s canyons of homes.
Harry Frampton: It’s unbelievable. We found three bodies when we first started here in Denver. We’d go dig a hole and all the sudden we’d hit bones. We had LoDo when we came in, but there was zero here. Nothing from the train station to the river. Nothing. I went and heard Wellington Webb speak at a ULI conference and he talked about his vision for Denver and I don’t think people give Webb enough credit. He said he wanted this to be a nice place for people to live. Trace that vision back to Peña who moved the airport and took a lot of arrows for it. Then you had Coors Field and the 16th Street Mall expansion and the museum and so forth. So government played an important role in building infrastructure that fueled the downtown redevelopment. But, yeah, we were the pioneers out here. There’s always this perception, particularly in good times, that developers can solve a lot of cultural problems … but it always takes a partnership of some sorts. Look at the city moving the buses right next to our property, they built Commons Park, they built the gorgeous (pedestrian) bridges. The government played a very important role in encouraging smart growth. We had no idea. We thought it would do well but we had no idea it would do this well.”
CS: You had a deep roster of buyers who appreciated your work up in the Vail Valley. Did they help you get started down here?
HF: That didn’t work out as well as we thought. People who live in the mountains and buy down here? Around about 5% to 10%. We thought it was going to be 20%. We sell to lots of people from Nebraska. This is their New York. Come down here and get their urban fix. But what really has done the trick is all these small start-up companies, like WeWork downstairs. It’s unbelievable. They have 100% leased out in this building and they are on four floors. It’s a bunch of 20-, 30-year-olds.”
CS: How about the types of buyers? Are they changing?
HF: I’m always reminded that among buyers, while there are some differences over the years, the fundamentals have not changed very much. When you go back 20 years or longer, when we were doing Beaver Creek or other places, we used to say our buyers were all in their 50s, give or take … and by the way they are still in their 50s. We ask why? Well, three reasons. Usually somewhere around 50, whoever it is, they are doing pretty well financially. And number two, they have usually got their kids through college and that’s a big deal. And number three, they say ‘Well I’ve been working for 30 years so I kind of owe something to myself.’ So we have seen people always tend to buy around that age of 50. It happens in Vail and it happens in other second-home resort communities.
CS: Are you seeing more home buyers in the mountains who maybe aren’t looking for second homes but have jobs they can work from anywhere and want to live in the hills?
HF: There’s no question. So many small entrepreneurial businesses. We’ve got those shared office spaces popping up in Vail and Summit County. It’s clear that is happening. There are still big companies in the Vail Valley, from Vail Resorts, the hospital, East West … but most of the people are working for small companies and we are seeing those trends. My inclination is that as the world continues to become more hectic and faster and busier — which is has, right? — I think these kind of special places like the Vail Valley, Snowmass and Aspen are going to become even more desirable. A place to get away and catch your breath and reflect. I think that as the world gets faster and faster and more urban, which is exciting down here in Denver, places like those up in the mountains will continue to do well.
CS: A side-effect of the trend toward people moving into these communities with their own jobs is they tend to increase the cost of housing and that impacts the people who do work in the community. What are you seeing on the horizon as more mountain communities grapple with attainable housing?
HF: I always think you have to look at affordable housing in segments. We tend to lump it all together. That ain’t right. The national parks forever had housing for their seasonal employees. That’s a different need than housing for young professionals. Then as you break it out even more, there’s employee housing for families. And affordable housing for singles. When you think about affordable housing you must think about a whole broad range of residents. And there are no silver bullets. Vail has a fair number of projects underway in the valley that could help. But what we know, affordability has been hurt to some degree by the Airbnb and short-term rentals. If you saw yesterday that Marriott is coming into the business to compete now. So what’s happened is that we have been building more houses, a helluva lot of housing is coming out of the supply. There are no silver bullets.
CS: Vail and a lot of resort communities are focusing hard on developing attainable housing. You hear from a lot of big companies and municipalities in the high country that they wish they had done more to work on affordable housing during the recession, when construction costs and land prices plateaued or dropped. You think we will see another recession up there? You think those big players will take advantage of those opportunities if the economy falters?
HF: I lived through the ’74, ’81, ’91, ’99 and 2008 recessions. Each one was different but what did they all have in common? They are about 10 years apart. When did we have the last one? What are we in right now? There are two sides of that issue right now. One side says “This time is different.” (He laughs for a few seconds.) “The internet is here and we got a lot of money out there.” The other argument is that we are all human beings and we tend to overbuild and do too much. I don’t know where the truth is. But if I was in public policy, I don’t think you can wait on recessions to solve problems. I think you have to solve them when you can.
CS: So what’s a solution? What’s an answer to the affordable housing crisis in the mountains?
HF: Well, this is going to be a little controversial. But, in downtown Denver, one of the coolest things the city ever did was build the convention center Hyatt. Everyone has forgotten that. Wellington Webb built that. If you remember, there was no downtown, there were no hotels, there was nothing. And nobody wanted to build a hotel. Nobody. So the city said we are going to build this damn hotel and they did. It was a winner for the city. It was incredibly positive I always give Webb a lot of credit for having the balls to do that. The point is the city had to take the lead. So I would argue we have too many layers of governments up there; there are so many governments in the Vail Valley I can’t even keep count of them. Vail, Avon, Eagle, Gypsum, Minturn, Red Cliff, and then we got the county. So there are what, seven governments for the valley. I always thought that was a little bit of a strength but also a weakness. You solve your employee housing issues by all those places working together to come up with collective solutions. So I would argue what they should all do is raise $100 million, $200 million, which the counties have the financial resources to do because they are pretty fat and sassy right now. And hire somebody — not me, but a developer or two — to build a thousand houses. They could do it. Just like the city of Denver did it. Affordable housing is being looked at in silos and it’s not a silo problem.
CS: But where do mountain communities build? We are running out of space and what’s left is pricey. I remember the Colorado Olympic boosters last year suggested building a 12-story housing complex somewhere in Summit or Eagles counties. They about got laughed out of the room.
HF: I have been an advocate, but no one listens, to go buy the damn (Magnus) Lindhom property (in Avon by the Home Depot and Walmart.) He wants too much for it, but who cares? You take that old STOLport, right in the middle of the valley, right next to everything. These different governments should come together and buy that. Government has got to take the lead role. Buy the Lindholm parcel and you could probably put 700 to 1,000 units there. In the middle of the valley? There are some other parcels. I think it’s going to take collective action. The government has got to play a role. Governments will build sewer lines, so why don’t they just put houses up? It doesn’t make money for developers, so the towns have to allocate certain subsidies to provide a better mix of housing.
CS: As the developer of most of Beaver Creek — the last large, successful resort built in the country — did you ever imagine the ski resort industry would look like it does today? Where do you see it going?
HF: Of course not. I could never have imagined this. You have to give Vail Resorts and Rob Katz a lot of credit for figuring out the Epic Pass. And then the other great thing that’s really important about Vail Resorts, is they continue to reinvest all their profits in their ski areas. I think that’s a good model and you do that for 10 to 15 years and a lot of good things happen. Sure we all get mad at our ski companies every so often, that’s just the human way. But in balance, you can say Vail Resorts has been really good for skiing and the brilliance of the Epic Pass has been phenomenal for the industry and for skiers. And now we have Alterra (Mountain Co.) giving Vail Resorts some competition. The only risk is how this might impact the smaller ski areas. How do they compete? To me, I think we are pretty lucky to have two really good companies out there. It’s always hard to figure out what people are going to do recreationally and it seems like skiing has been written off about five or six times. Still, the numbers are equal to or slightly above what they were 10 years ago. I think the risk today is the expense of skiing. Even if you buy the Epic Pass, you still have to drink their $5 coffee, you gotta pay $25 for parking, you gotta stay in a hotel. I think that’s kind of an issue.
CS: Give us a quick thumbnail sketch of what successful developments might look like in the next 10, 20 years.
HF: I think the winners are going to be those communities that create environments that are a retreat from the crazy changing world we are in. I don’t mean that’s a bad world, it’s a good world with a lot of great things going on. But at some point you have to get out and reflect. So how do you retreat and how does a community enable that? The second principles of the winners will be the communities who de-emphasize cars and create better and better comprehensive transportation where you don’t need cars. That’s a huge deal. It’s going to be difficult as we transition from a vehicle-dominated world. The infrastructure in that transition will require affordable housing. The third principle of the winners will be those communities that embrace continuous education and lifelong learning. Used to be that you would go to college for three, four years and that was it. Now, in a world that is changing so fast, that lifelong learning is essential to stay on top of your game. And fourth, the winners will be the communities that encourage comprehensive health and wellness.