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Gal-Tex Hotel Corp. Acquiring the Historic Cliff House at Pikes Peak
 and the Wheeler House Near Colorado Springs, Colorado

By Jim Bainbridge, The Gazette, Colorado Springs, Colo.McClatchy-Tribune Business News

Sep. 9, 2006 - Manitou Springs' two landmark 19th century inns are being purchased by 1859 Historic Hotels Ltd. of Texas with an eye toward expanding both properties and making significant upgrades.

The sale will include The Cliff House at Pikes Peak, two adjoining houses on Canon Avenue and the neighboring Wheeler House on Park Avenue, which includes a house, apartments and hotel rooms.

Neither side would disclose the purchase price. According to the El Paso County Assessor's database the properties have a total taxable value of more than $4 million, but that does not include the value of the businesses there.

The Cliff House has received AAA's Four Diamond Award for the past four years and was recently recognized in a Travel + Leisure reader poll as one of the Top 100 Hotels in the World, the only area hotel so honored.

The painstaking restorations of both inns in recent years and the attention to service -- the entire Cliff House staff is being retained -- are what attracted 1859 to the properties, said Cliff House general manager Paul York, and now the company is looking for more of the same.

"There has been some discussion of adding 50 more rooms to the Cliff House," York said, "and also expanding the dining room, ballroom and kitchen, all within about three years."

Ken Lucas, president of 1859, said he also sees a need for additional meeting rooms and more parking. He will be consulting with architect Michael Collins, who worked on the 1998 restoration of the Cliff House, to figure out the best way to complement the existing structure.

Lucas also knows he will need to talk to the local historical society to determine whether the century-old homes on Canon Avenue could be torn down to make room for expansion.

"We might have to fix them up for office space or move them somewhere," Lucas said. "We'll get together and figure out what's best for the inn and what's best for the community."

The historic main building at Wheeler House, built in 1890, will remain intact. The fate of the other structures is open to discussion.

Closing is scheduled for Friday with Wheeler Inn owners Penny and Edd Bever selling their business to the Cliff House's California-based owner James Morley and Morley then selling both properties to 1859.

The Bevers, who had purchased Wheeler House from Morley in 1988, had been under contract to sell it back to Morley well before the deal with 1859 developed.

"There were four other groups that were interested in buying Wheeler House," said Penny Bever, "but Jim stepped up with a solid offer. We have worked with him and for him, and we have a lot of respect for the way he does things.

"He'd been interested in buying for a few years, but finally asked at the right moment, when we had decided it was time to give up the 24/7 commitment of running the inn."

Morley originally bought the Cliff House in 1981, opening it as a 42-unit apartment building. A fire six months later shut it down and it stayed vacant until 1997 when Morley was able to obtain financing for a $9 million restoration that brought the inn back to its full 19th century Victorian splendor.

York describes it "as a labor of love" by Morley and says the decision to sell now was a tough and emotional one.

"Jim was on the property two nights ago and was very tearful that he was not going to be part of this going forward," York said. "It was a fair deal for both sides and I think he felt he needed to do it, while not necessarily wanting to do it."

Based in Galveston, Texas, 1859 Historic Hotels Ltd. is a subsidiary of Gal-Tex Hotel Corp., handling numerous historic hotel properties, including the Menger and Crockett in San Antonio, Inn of the Hills in Kerrville, Texas, and the Inn at the Waterpark in Galveston.

While most of their holdings are in Texas, 1859 is negotiating to buy two inns in Virginia -- to go with the one it already has in Blacksburg -- and another in Kentucky. The Manitou properties are the first the company has obtained in the Rocky Mountain region.

"I guess some of us seashore people want to get a look at the mountains," Lucas said.

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To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazette.com.

Copyright (c) 2006, The Gazette, Colorado Springs, Colo.

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