|By Rich Laden, The Gazette, Colorado
Knight Ridder/Tribune Business News
Nov. 30, 2005--Renovated rooms, a new pool complex and exhibition hall are a few of the highly visible changes at The Broadmoor hotel during the past several years.
One of the more interesting changes, however, has gone largely unnoticed and unreported -- and happened nearly two years ago.
Oklahoma Publishing Co., the privately held media giant that has been the hotel's majority owner for 17 years, has acquired the remaining 20 percent of the hotel from Colorado Springs-based El Pomar Foundation and now stands as the internationally known resort's sole owner.
As far as day-to-day operations go, the change has meant little. Oklahoma Publishing, based in Oklahoma City, already had approved expansions and renovations, hired key managers and approved other major decisions dating to 1988.
But for historians and longtime Springs residents, the significance might be that for the first time in its 87-year history, The Broadmoor's ownership no longer has a local component.
Founded by gold and copper magnate Spencer Penrose and opened in 1918, The Broadmoor's ownership passed to the Penrose-established El Pomar Foundation after his death in 1939.
The foundation owned the hotel until the Federal Tax Reform Act of 1969 forced a sale. El Pomar sold a controlling, 65 percent interest to Oklahoma Publishing; its interests had included the Colorado Springs Sun newspaper, which folded in 1986. Edward Gaylord, the late head of Oklahoma Publishing, also had several Colorado ties.
Oklahoma Publishing upped its stake in The Broadmoor to 80 percent in 1990.
In January 2004, El Pomar sold its remaining interest to Oklahoma Publishing. Although there was no news release or formal announcement, foundation board Chairman Bill Hybl said this week that he remembers discussing the sale publicly in spring 2004 at a philanthropic event at the hotel that was attended by several hundred people.
The sale of its remaining stake in The Broadmoor was a business decision by the foundation, whose 11-member board of trustees voted unanimously to OK the deal, Hybl said.
The foundation, one of Colorado's largest charitable trusts,which distributes millions annually, could do better financially by taking revenue from the sale and investing it, Hybl said.
"Capital appreciation (in the hotel) does not give you the sort of dollars for distribution that higher-yielding equities and fixed-income instruments will," Hybl said.
Neither Hybl nor Gary Pierson, Oklahoma Publishing's chief operating officer, would disclose the sale price.
However, a 2004 federal income-tax form filed by El Pomar and made available by the foundation at The Gazette's request listed a $73.9million gain from the sale of assets. Asked about the figure, Hybl conceded The Broadmoor's sale made up "a substantial part" of the $73.9million, but it included the sale of other assets, too.
Pierson said the negotiations took place over two months leading up to January 2004; he didn't recall who initiated the talks but remembers them as a mutual discussion that took place in a professional manner. As part of the terms, two El Pomar board members sit on the hotel's board of directors.
"They had an ownership interest in an entity that was not going to be for sale or sold anytime in the foreseeable future," Pierson said of the hotel, which he describes as very profitable. "Every year, they have a requirement to give away a certain amount of money, so they created cash out of an illiquid investment, which was a smart deal on their part. They negotiated fairly and vigorously, as did we, and we quickly came to consideration and we just made it happen very, very quickly." into renovating The Broadmoor over the past 15 years. The hotel remains one of the few properties in the nation with both a five-star rating from Mobil Travel Guide and a five-diamond rating from the American Automobile Association.
"It's a known quantity to us, it's got extremely competent management and it's something we're awfully proud of," Pierson said.
Hybl said The Broadmoor remains a hallmark of the legacy of Penrose and his wife, Julie. In turn, Oklahoma Publishing has show tremendous respect for the Broadmoor, he said.
"They've been a tremendous stewards of those assets," Hybl said.
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Copyright (c) 2005, The Gazette, Colorado Springs, Colo.
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