There’s a new heavyweight investor buying up properties on Crested Butte’s historic Elk Avenue.
But this time it’s not a reclusive billionaire from afar. Jeff Hermanson, who transformed Denver’s Larimer Square and Union Station, has lived in Crested Butte for 48 years. And he’s buying commercial properties on what he calls “one of the greatest streets in all of Colorado” because “there is an opportunity to make a difference.”
Earlier this year, Mark Walter, the Chicago-based owner of the L.A. Dodgers who has had a vacation home in Crested Butte since 2009, started buying historic buildings on Elk Avenue. He’s got at least six properties in downtown Crested Butte, not including the 60-acre Almont Resort down the road. In recent months Hermanson, a renowned restaurateur who shepherded Larimer Square from squalor to one of Denver’s top attractions, bought three Elk Avenue properties.
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Hermanson has spent nearly half a century living in Crested Butte. For the last chunk of those he’s been in Denver and dashing down to Crested Butte on weekends. Now he’s full-time in the end-of-the-road town.
He laughs when he starts describing the changes since he arrived in town in 1973.
“It’s not even close to the same as it was in 1993,” he says. “The lesson I’ve learned is that change is constant in our lives. For Crested Butte, it feels like a tsunami. Maybe it’s the same for many other ski towns. The world has changed. Sure it’s different. For some people it’s not the same.”
Hermanson doesn’t have firm plans for what he hopes to see at the three buildings. One is home to the Breadery bakery, another the beloved Last Steep restaurant. One, until recently, housed the Montanya Distillery tasting room, which this month relocated to a newer building on Elk Avenue.
“What is most meaningful, in my mind, is that this is a community and it’s really about the community,” Hermanson says. “It will continue to go through changes, but if we can still talk about protecting the community, it’s going to be OK.”
Hermanson actually worked in the kitchen in one of the buildings he just bought when he first arrived in town in the early 1970s, but back then it had a different name. Sean and Sarah Hartigan opened the Last Steep in 2000. Last week they celebrated their 21st anniversary as owners and operators of the local’s favorite, which is named after a run on the ski hill.
They won’t be celebrating another anniversary there.
“It’s very bittersweet and I’m sad, but it’s time to move on,” says Sarah Hartigan, who will run the restaurant through the winter. “It’s time for a change.”
In Colorado’s resort towns, longtime business owners are weary after an exceptionally busy summer and a pandemic winter. On top of record-setting crowds this summer are the rippling impacts of the pandemic, which includes a sudden influx of new residents who are buying and moving into homes once rented by locals. The lack of affordable housing in mountain towns has triggered a shortage of workers. Add it all up and the stress of running a restaurant or store in a busy ski town has, for a growing number of business owners like the Hartigans, eclipsed the upside of life in the mountains.
“The summer is the reason we sold, not the winter. The summer is just too busy and we are short-staffed and no one can find housing. We just can’t keep up anymore,” Hartigan says. “And Hermanson is such a great person to sell to, because he really does care about our town.”
So why is Hermanson buying now? Well, first, he came into a good bit of money last year when he sold Larimer Square. As in the block of Larimer Street between 14th and 15th street in downtown Denver, which he’d owned since 1993.
Second, he’s settling full-time in Crested Butte and raising his 9-year-old daughter.
“She’s a kick-ass skier,” he says. “My claim to fame is that I’ve been skiing Rabbit Ears on the Headwall with her for the last two years.” (That’s a very steep, challenging run, by the way.)
Sure, he says, he wishes he had bought the Elk Avenue properties a decade ago, but right now “there is an opportunity to make a difference.”
“I’ve been blessed to have been involved in a couple really iconic projects in Denver that really made a difference in the community,” he says of his work renovating Larimer Square and Union Station. “I see a similar opportunity here in Crested Butte. Whenever there is change, there is angst, but there is also opportunity. I’m going to seize this opportunity.”
He has not set firm plans, but Hermanson says he’s vying to help his community in two different ways, with a focus on both housing and food.
First, the housing stuff. He’s got a 25-acre lot in Gunnison where he is going through the approval process to build affordable workforce housing. He’s hoping to work with the community to build more worker housing on Crested Butte-owned properties.
He says he’s saddened to see so many locals leaving Crested Butte due to the shortage of affordable housing.
“You can spend a lot of time talking about the missed opportunities, but the key is to move forward,” he says. “It can be done.”
Hermanson spent a decade with the Crested Butte Land Trust, where he served as board president for three years.
One of the takeaways from his tenure with the trust that leveraged $70 million to protect 6,300 acres in the last 26 years, is “the public-private partnership as a vehicle for problem solving,” he says.
Union Station, for example, would not have happened, he says, without help from the city of Denver and the Regional Transportation District. In Crested Butte, he’d love to explore ways the town and Gunnison County can offer incentives to push developers toward reducing the housing deficit. Not unlike the federal and state incentives that motivate landowners to work with land trusts to protect and conserve open space.
“The importance of restaurants in placemaking”
One thing Hermanson learned in developing Larimer Square and Union Station as destinations is “the importance of restaurants in placemaking,” he says.
“Crested Butte has one of the greatest streets in all of Colorado, if not the West,” he says. “I think working to activate it and enhance the sense of placemaking; that happens typically with restaurant operators and retailers.”
Hermanson loved how dining spilled into streets during the pandemic. Across Colorado, as restaurants opened with requirements to keep visitors well spaced out, tables spilled into sidewalks and parking spots.
“It was such a positive thing and it went a long way as a great placemaking tool,” he says. “Recapturing space from the automobile is a great lesson from the pandemic.”
He loves the idea of making a street about people, not cars. But he sees a problem when that happens in small towns.
“You can’t go anywhere fast because you are always running into someone and end up talking for hours because you can’t go anywhere in a hurry,” he says, laughing.
Hermanson also wants to take his work in Denver to address hunger into Crested Butte’s restaurants. He spent more than a decade on the board of We Don’t Waste, which distributes unused food from city restaurants, schools and grocery stores to nonprofits and food pantries.
“You know something like 40% to 50% of the food we produce in this country is wasted?” he says.
He created the first-ever national rating system for restaurants that buy from local providers and reduce waste. The Good Food 100 celebrates restaurants and chefs that “build a sustainable food economy,” Hermanson says. (Colorado has 37 restaurants on the 2020 list.)
Hermanson delights in watching his daughter and her classmates work in her school’s garden. The kids have a summer food stand where they sell produce they grow.
“A lot of solutions to food and hunger can be done small and can be done locally. I’m really enthusiastic about doing that in Crested Butte,” he says. “Some of these chefs in this state, they are provocateurs. They have really helped educate me. They want to change the world. I want to help them.”
The change has been coming hard and fast in ski towns. More deep-pocketed buyers — individuals and investment firms — have expanded beyond their typical purview in dense urban settings and are parking money in rural resort communities.
Dana Crawford, the legendary developer who worked with Hermanson on Union Station, has purchased as many as 10 buildings in downtown Trinidad. Denver developer Kyle Zeppelin, who has reinvigorated blighted areas of the city, recently bought a historic hotel in downtown Ouray. There are other small towns in the mountains that are reporting out-of-town buyers acquiring multiple commercial properties. (Stay tuned for more on that.)
“It’s daunting what’s happening right now,” says Hermanson of the pressures — real estate, housing, labor — distressing his hometown. “But I truly believe we can make a difference here. Will it be the same? No, it won’t. So many towns have tried to stop change and they all failed. They weren’t able to freeze themselves in time. And they never will.”
John Norton, who directs Gunnison County’s Tourism and Prosperity Partnership and once managed the ski area, has known Hermanson for 35 years and says “I love the guy.” He’s not alone. Recently while skiing with his family at the resort, many passersby waved and shouted their hellos to Hermanson as he met with a photographer. Some came up and hugged him.
“And he loves CB for what it is, what we are. He’s got enough dough to live wherever he wants and he sticks with Crested Butte through all our ups and probably our more numerous downs,” Norton says. “I’m pretty sure whatever decisions he makes are going to include the calculus of how this place remains cool and soulful.”
Norton isn’t saying that to disparage the other big investor, he says, it’s just that “Hermanson has the long history that makes most of us believe he’s going to nail it.”
“And if he doesn’t nail it on the first go, he’ll nail it on his second,” he says. “That’s his history at Larimer Square, still my favorite place in Denver.”
One of the larger concerns when a new owner comes in and spends big on commercial properties is how the increased value of the property might trickle down to tenants.
Historically, longtime restaurant and retail operators in mountain towns own their buildings. They aren’t necessarily scrambling to pay their landlord.
That dynamic shifts when a new owner comes in. Rents can climb. Margins can shrink.
“That puts at risk the character that Jeff is trying to protect,” says local broker Scout Walton, whose family once owned Crested Butte Mountain Resort. “Maybe in his case his operators and his tenants will have an economic advantage. He has an emotional attachment and truly wants to protect the history and character of this place.”
With Walter and now Hermanson, it’s likely that Crested Butte will see more investment. Heavyweights tend to draw heavyweights.
And Crested Butte is not nearly as pricey as Aspen, Telluride or Vail. As more investors eye rising inflation and look to park their dollars in assets, Walton warned, “there are not a lot of places left for them to go.”
“Jeff is not someone swooping in and saying the right words. He’s been living it for decades and he’s put his money where his mouth is before and has helped this valley in a lot of different ways. He’s got the trust,” Walton says. “Jeff is pretty open about what he hopes to accomplish.”