Eco-devo board OKs CECFA scheme to facilitate Stanley Hotel sale

Editor’s note: This story has been updated to clarify the Colorado Educational and Cultural Facilities Authority’s role in the potential sale of the Stanley Hotel.

DENVER — Members of the Colorado Economic Development Commission gave their unanimous blessing Thursday to a plan that could allow the Colorado Educational and Cultural Facilities Authority to step in and facilitate a previously approved — and now amended — plan that would see the Stanley Hotel sold and a long-languishing film center at the iconic Estes Park lodge completed.

With the EDC’s go-ahead, the Colorado Educational and Cultural Facilities Authority can move forward into the next stages of its plan to buy the 116-year-old, 140-room hotel that inspired Stephen King’s “The Shining” novel from long-time owner Grand Heritage Hotel Group.

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The sale, according to state officials, would unlock millions of public dollars needed to expand the hotel and build out The Stanley Film Center, which, according to its website “will be the permanent home for film, fun and the horror genre” and will highlight the key role that Stanley Kubrick’s “The Shining” film adaption has played in horror history.

Arizona-based Community Finance Corp., a nonprofit group that specializes in forming public-private partnerships that provide alternatives to the traditional funding schemes governments often use to pay for capital improvements and infrastructure projects, was previously in line to buy the Stanley — through a fairly complex financing mechanism — from Grand Heritage by way of a $475 million bond issuance from CECFA.

Under that deal structure, CFC was set to serve as “the temporary custodian of the Stanley Hotel and Film Center,” Colorado Office of Economic Development and International trade deputy director Jeff Kraft told the EDC on Thursday.  

The new deal structure “allows the entity that’s going to issue the bond, CECFA, to also be the near-term owner of the project,” he said. “CECFA was always going to be the long-term owner once the bonds were paid off. …This is a streamlining and simplification of the ownership structure.”

If the Colorado Educational and Cultural Facilities Authority’s new plan comes to fruition, the state will own the Stanley upon repayment of the bonds — still expected to total more than $400 million — and revenues from the property will flow back into the coffers at CECFA, which, according to its website, “is the official state issuer of tax-exempt bonds for capital projects furthering the missions of educational and cultural organizations.”

Kraft said the CECFA is “going to use the profits that the hotel generates from operations after the bonds are paid off for philanthropic purposes in Colorado.”

Whether CECFA will be the permanent owner of the Stanley remains to be seen.

“The amendment also allows (the EDC) to further modify and tweak the ownership structure as partnerships and events might unfold,” Kraft said.

Many details of the transaction, like the Stanley itself, remain mysterious. For example, state and hotel officials have not specified how much Grand Heritage stands to profit on the deal if the sale goes through. Economic Development Commission members and OEDIT staffers spent about 30 minutes on Thursday in an executive session discussing what Kraft described as “commercially sensitive information.”

It remains unclear why the previous iteration of the hotel-acquisition plan, which had been reviewed by several state regulatory boards in late 2023 and early 2024, wasn’t completed. Community Finance Corp. did not respond to requests for comment on Thursday. 

With the EDC’s approval, CECFA must now ask for permission from Colorado lawmakers, who will adjourn the 2024 Legislative session next month, to expand its operational mandate to include certain new functions it would take on as the owner of the Stanley. 

State officials and Grand Heritage Hotel Group owner John Cullen, whose company is expected to continue operating the hotel upon the state’s acquisition, have said repeatedly in recent months that a sale of the Stanley is necessary to fund important improvements such as the completion of The Stanley Film Center.

The estimated $70 million dollar effort began in 2015 with a jumpstart in the form of millions of dollars in state tourism tax 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-only), 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 a state documents. 

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.

The bond issuance and sale of the Stanley property to the state “is intended to facilitate the up to $46,399,582 in state sales tax increment financing over 30 years approved by the EDC under the Regional Tourism Act” to help get the Stanley improvement projects across the finish line, an OEDIT spokesperson told BizWest in an email Thursday. Improvements at the hotel will boost Colorado’s profile within entertainment industry circles, state and Stanley officials have said, and hopefully draw more events such as the Sundance Institute’s Directors Lab, which is coming to the Stanley this year, marking the first time a venue other than the Sundance Resort in Utah has hosted the lab.