Mar. 31, 2003 - MOUNT CRESTED BUTTE, Colorado -- Crested Butte Mountain, unable to make debt payments on the slopeside lodge it built in 1993, has lost its Sheraton hotel. 

A New York mortgage company last week acquired the hotel from the resort, which forfeited ownership before the 242-room lodge fell into foreclosure. 

The mortgage firm has retained a management company that will run the hotel, which Crested Butte resort chairman Edward Calloway built in 1993. 

"The hotel has never broken even in a post-Sept. 11 environment. It's really been in trouble," said Calloway, who declined to detail the loss his company absorbed by returning it to the lenders after several years of mortgage payments. 

"Back when we built the hotel, we were enthusiastic about a new town center. But that got waylaid in a really tough local approval process," Calloway said, noting that the lack of a bustling village surrounding the hotel hurt its potential to attract business. "But we've got a lot of momentum and we're starting over again." 

In 1998, the resort company added 110 rooms to the hotel in a major renovation. The company joined with Sheraton that year, giving the lodge national recognition. The resort's other hotel, the 262-room Grand Butte Hotel, operated under the Marriott banner at that time. 

But in 2000, Crested Butte Mountain sold the Marriott to Club Med, which opened a family lodge at the slopeside hotel. That lodge operates as a private club with little cooperation -- aside from neighborly relations -- with the ski area. 

Since the terrorist attacks of 9/11, Crested Butte has struggled with its debt payments on the Sheraton. For the past 18 months, the resort company's lender has enlisted a Dallas-based management firm to oversee the hotel's operations, while Crested Butte worked to boost revenue. The resort company continued to run the hotel under the management firm's close watch. 

Under the new ownership by New York City-based CDC Mortgage Capital Inc., Crested Butte will continue to run the hotel with its own employees. 

John Norton, the mountain's new leader, says his company's operations with the new ownership should be seamless. The mountain should still be able to attract group business and its traditional ski competitions even without a hotel in its quiver of amenities. 

"We're out from under a pretty big debt," said Norton, who came to Crested Butte this season after more than a decade working as second-in-command at Aspen Skiing Co. 

"The mission of the Sheraton is to be full. And if it's full in the winter, everyone's probably skiing. You know, my job's a little easier and this takes us out of harm's way." 

The shift in ownership was closely watched by local businesses and leaders in the town of Mount Crested Butte, where sales tax revenue at the Sheraton is one of the largest contributors to the town's coffers. 

"The shift in ownership does not concern me really. What concerns me is the linkage between the ski area and the largest hotel we have," said Mount Crested Butte Mayor Woodie Sprouse. "But I think the ski area and the new ownership will work well together." 

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