The town of Ridgway is suing a hotel owner who inked a deal to house construction crews working on a $1 billion hotel in Mountain Village, arguing the hotel is on land zoned for temporary stays.
The lawsuit filed March 27 in Ouray County District Court against the owners of the 52-unit MTN Lodge reveals the nuanced challenges facing worker housing in resort towns where hotels are routinely converted to long-term housing as vacationers take over short-term rental homes.
The owners of the MTN Lodge, who acquired the hotel and built a restaurant in the building in 2021, signed a deal to lease all 52 of its rooms through 2031 to the developer of the luxury Four Seasons Resort and Residences in Mountain Village, which broke ground last fall.
If the hotel is blocked from renting to Four Seasons subcontractors, it will close, owner Ben Jackson said. MTN Lodge occupancy peaks at 73% in the summer season but drops to single digits in the winter months, with an average annual occupancy of 53%, according to Jackson.
“We have been trying for months to come up with collaborative ideas that would allow extended stays and avoid a lawsuit. We’ve been rejected at every turn,” Jackson said in an email to The Sun.
Jackson noted that lodging taxes — which Ridgway voters increased from 3.5% to 6% in 2023 — are increasingly directed to housing, child care and other municipal needs while fewer dollars are directed toward marketing and tourism promotion. He said he wants to work with the town on promoting events to bolster the tourism economy “but they need to drop the lawsuit, allow extended stays and turn their budget and focus on community around.”
The town, in its lawsuit, said the hotel is in a part of town that is zoned “general commercial,” which does not allow “household living” or residential development. The hotel’s owners have not applied for any change of use to allow for stays longer than 30 days. Despite an earlier promise to pay the town’s lodging tax, the latest correspondence from the hotel owners points to town regulations that waive sales or lodging taxes on stays longer than 30 days.
“Despite the vast sums of profit MTN Lodge seeks to gain from its multi-year agreement with Merrimac Ventures, MTN Lodge has expressed in writing that it refuses to pay any sales or lodging tax, or in the alternative, that the lodging and sales taxes do not apply to them,” the lawsuit reads.
Ridgway has three hotels that deliver lodging taxes set at 6%. In 2024, the town budgeted for $200,000 in lodging tax revenue and collected $242,101 from the three properties, with $109,916 of that going to the town’s affordable housing fund. In 2023, voters in Ridgway approved an increase in the lodging tax, from 3.5% to 6%, with half of the tax revenue going toward tourism promotion and half going to affordable housing, child care and home ownership support.
Town manager Preston Neill said town staff attempted to estimate lost lodging tax revenue without the MTN Lodge but when the 2026 budget was adopted, “the town was under the impression that the MTN Lodge would be remitting the applicable lodging tax.”
A January letter from the owners’ attorney to the town notes the town’s municipal rules that exempt lodging and sales taxes from stays of 30 days or more “necessarily imply that such stays are permissible.” That letter from Denver attorney Mike Lazar to the town’s attorneys said the owners arrangement with Merrimac Ventures did not require a rezoning application.
The multiyear Four Seasons project on 4 acres in the heart of Mountain Village includes 52 hotel rooms, 43 one-bedroom to five-bedroom hotel residences, 26 private apartments priced between $4 million and $35 million and 10 employee apartments. The $1 billion project is the first large-scale luxury hotel in San Miguel County in 15 years. The approval process took four years and the latest update from the developer indicates more than 25% of the units are under contract, with residences selling for more than $5,000 a square foot.
“Saturation at an unprecedented level”
The developers — Merrimac Ventures and Fort Partners, both in Florida — are veteran builders of high-end properties. The two firms have covered the region, renting hotels, homes and resort properties to accommodate the hundreds of workers needed for the three-year project. The developers, supported by a $417 million construction loan from JPMorgan Chase and Co., last year purchased the 42-room Rimrock Hotel in Naturita and rented several cabins at the Camp V resort.
Merrimac officials have told local leaders they are looking for more housing options in the West End of Montrose County. Emails to the companies were not promptly returned.
There is some concern on the periphery of Mountain Village and Telluride that the resort towns are reaping the financial benefits of the Four Seasons hotel project while the bedroom communities carry the burden of housing workers.
A coalition of local leaders from the west ends of San Miguel and Montrose counties — emergency service providers, water watchers and elected officials — last year sent a letter to Merrimac executives and Mountain Village representatives asking for a “community benefit agreement” and a forum to discuss strategies that protect outlying communities housing hundreds of resort-town construction workers.
“This is an opportunity to shift the well-worn pattern of extraction, damaging impact and neglect into a new rhythm of co-stewardship,” reads the July 2025 letter, which noted that every emergency response team and utility service provider in the region “already operates at full capacity.”
The letter said the benefits of the Four Seasons project “flow inward” into Mountain Village while the burdens of housing and strain on services and infrastructures fall on communities “who anticipate few, if any, long-term benefits.”
That letter did not land as hoped. There is no forum or community agreement to more closely involve local communities in the housing push for Four Seasons workers.
That is a timeworn issue. Colorado’s down-valley communities — think Eagle and Gypsum, Basalt and Carbondale, Hayden and Oak Creek — have long wrestled with accommodating the housing demands of bustling resort towns. But this was such a sudden surge of workers, Norwood Mayor Candy Meehan said.
“This is saturation at an unprecedented level and none of our communities can handle themselves,” Meehan said.
A group of leaders from Nucla, Naturita and San Miguel County quickly formed to address the influx of workers and they penned a letter to Merrimac and Mountain Village officials, urging them to consider the water and infrastructure capabilities of outlying communities in their search for worker housing.
Meehan said there is growing worry about how the region’s limited water infrastructure, small businesses and emergency services can handle a couple hundred more residents in “man camps.”
“This has made our community feel like we are in an incredibly predatory position,” Meehan said. “We are talking about a playground for billionaires and the homefront of blue-collar workers.”
Meehan said the unified coalition of leadership is ready to work with the resort communities to accommodate the massive project.
“I know we can make this work and we will be better off for this and we will support our eastern neighbors,” she said. “A thriving east end depends on having a thriving West End.”