Dive Brief:
- Rida Development Corp. and Marriott International, Inc., announced the award of a $530 million construction contract for the Gaylord Rockies hotel in Aurora, CO, to Mortenson/WELBRO, a joint venture of Mortenson Construction and Welbro Building Corp., the Denver Business Journal reported.
- Rida will develop the hotel, and Marriott will manage the property under its Gaylord brand, The Denver Post reported. The two companies also announced they secured a $500 million loan to finance the $824 million, 1,500-room hotel and convention center just south of Denver International Airport. Thanks to the Regional Tourism Act, the project will also see $81.4 million in state sales tax rebates, which other Denver and Colorado Springs hotels have challenged on the basis that such incentives will give the Gaylord Rockies an unfair advantage.
- The hotel will be Colorado's largest when complete, will employ an estimated 10,000 construction workers and will provide 2,500 permanent jobs, The Post reported.
Dive Insight:
According to Mortenson, the contract is "CM at risk," meaning Mortenson/WELBRO must, normally with only a few exceptions, keep costs under a guaranteed maximum price (GMP) or pay for the excesses themselves. Critics of the way the Boston Green line extension debacle has been handled say the GMP was partially to blame, but, the GMP traditionally safeguards against cost overruns.
Denver has been experiencing a building boom ever since the legalization of cannabis in 2012. Denver housing prices have skyrocketed this past year, and Colorado, just in the first months of 2015, saw $253 million of recreational cannabis income. The state expects to collect $94 million in cannabis taxes by next year.
An offshoot of legalization is the burgeoning cannabis tourism industry where, for example, guides lead tourists by the hand – or by party bus – around Denver, first teaching them about the different types of cannabis, then taking them on a shopping tour of some marijuana dispensaries, according to Travel and Leisure. The industry is still in its nascent stage, but it's not hard to imagine this type of activity being a big draw for the conventioneers who will one day visit the Gaylord Rockies.
