Private equity fund buys CB’s Old Town Inn

More big money settled in the Gunnison Valley with the multi-million dollar sale of Crested Butte’s Old Town Inn at the end of July.

The new owner is a real estate fund, Stomp Capital, which boasts over $70 million in assets. Stomp is run by Richard Fertig, a real estate investor and former Wall Street hedge fund manager focused on the vacation rental market. Over the years, Fertig has also vacationed and owned property in Crested Butte. 

The Old Town Inn, located right off Hwy. 135 at the entryway to downtown Crested Butte, has been owned and operated by Crested Butte locals Sandy Fails and Michael Garren for over two decades. The pair were approaching retirement age, and sought to sell the Inn to pursue other adventures in the Gunnison Valley, Fails wrote in an Aug. 4 email to the Times.

Fertig paid $6.7 million for the Inn, under ESC Crested Butte LLC, in an “off market” deal at the end of July. This means it was never listed on the public real estate market. On X, formerly known as Twitter, Fertig claims to now own a third of Crested Butte’s hotel rooms. 

Fertig has no plans to tear the Inn down or redevelop it completely, he told the Times. He’s instead looking to “freshen up” the space with small projects like new paint, carpeting or updating bathroom amenities. The two-story building, completed in the mid-80s, has 33 rooms. Fertig said he will gauge community interest in major renovations before pursuing anything of that scale.

Historically, the Old Town Inn has been one of the more affordable places for visitors to stay, with costs ranging from $116 to $180 per night, depending on the season. These rates will increase to account for inflation, but it's still unclear by exactly how much, Fertig said. Other boutique hotels in town, like Eleven-owned Public House Lofts, the Vaquera House and the Scarp Ridge Lodge, range from $500 to $1,200 per night.

“We're not looking to come in with a fancy zip code proposition, change things up and make our mark,” Fertig said. “We're very much trying to enhance the location and the community, give people a better value proposition and employ local people.”

‘Next-gen’ hospitality 

Fertig lives in Jackson Hole, Wyoming, another of the West’s booming resort towns. He previously worked for the behemoth international investment firm, Blackstone, and was the co-head of investments at Ramius Capital Group, where he managed a $4 billion hedge fund. In the late 90s, he started investing in short-term rentals. 

But Fertig is no stranger to the Gunnison Valley. He first moved to Crested Butte in 1991 for the ski season and worked at the former Artichoke Restaurant before heading to Chicago to start a career in finance. In 2015, he bought a home in Crested Butte for family vacations, and short-term rented it when they weren’t in town.

Fertig had been keeping an eye on Crested Butte’s real estate market for years when he learned that Fails and Garren were trying to sell the Inn last fall, he said. The investment in Crested Butte is intentional, he wrote in an email to the Times, as his interest stems from the town being a “world class location” for outdoor recreation with nods to his past.

As early as October of 2023, Fertig shared details of the coming purchase on X. He underscored the valley’s abundant recreation opportunities — the expansive fields of wildflowers, world-class skiing, mountain biking and restaurants. Following the announcement, his posts received hundreds of likes and thousands of views on various social media platforms, as well as comments from wealthy real estate brokers and investors around the country. 

Stomp redevelops and manages mostly summertime properties around the country. It has properties in various stages of development in North Carolina, California, New York, Florida and Costa Rica. These properties range from yoga and surf hotels on the beach to modern, luxury villas. The minimum investment required to buy into the fund is $100,000, according to its website. 

Stomp calls these developments “next gen hospitality,” straddling the line between a traditional hotel and modern vacation rental. Some of these properties boast amenities like pilates classes, live music, private chefs and location-specific recreation activities such as surfing and jet-skiing. 

Stomp builds some properties from the ground-up. But, like the purchase of the Inn, it also refurbishes older buildings. Stomp’s largest, 60-acre property is located on Hatteras Island, North Carolina. The fund is the single largest landowner on the island, with the exception of the national seashore. The firm currently short-term rents three single-family homes and a hotel with plans to further develop the area over time. 

A new chapter

For decades, the Inn has been owned and run by Gunnison Valley locals. Fails and Garren ran the inn after purchasing it in 2002 from Gunnison residents Bob and Donna Rifley. The couple started trying to sell it last year, as they approached retirement age. Their son Chris, who is also the general manager, also wanted to explore other business opportunities, Fails wrote.

Fails and Garren moved to Crested Butte in 1981 from Austin, Texas with their “worldly possessions,” a few foldable directors’ chairs and orange crates for end tables. Over the years, Fails worked for the Crested Butte News and edited the Crested Butte Magazine. Michael worked for Crested Butte Mountain Resort, before they purchased the Inn in the early 2000s. 

A mutual friend who knew both couples scrawled the Rifleys’ contact information on a note and left it on Garren’s car. Soon enough, the Inn sold and Fails and Garren embarked on their first attempt at hospitality. They cobbled the first few years of business together with a small staff and help from their teenage son. Mentorship from locals like Allen Cox from the Nordic Inn, and former Cristiana Guesthaus owners Martin and Rosie Catmur, fostered the Inn’s success, Fails said. 

“Over the years, we tried to build a culture of respect and support for our staff,” she wrote. “We hired kind-hearted people and emphasized taking good care of guests, who often arrived weary from their workaday lives; it was gratifying to watch visitors relax, play and smile over the course of their stay.”

Garren and Fails worked to ensure the Inn served the Crested Butte community by accommodating local workers and offering discounts to nonprofits. The couple slowly renovated the space while trying to preserve a “welcoming and homey” feeling with colorful tablecloths, fresh flowers and old photos of Crested Butte. 

The entire staff will be able to keep their jobs, Fertig said. The new general manager is a long-time local who’s worked for years in Crested Butte hospitality.

“Countless people helped us out over the years. The hospitality business is full of surprises, from guests’ unusual situations to unexpected building repairs,” Fails wrote. “People went above and beyond to save the day for us, again and again. We will still live here and be part of the community — and hopefully have more time to ski, hike and ride around here in our retirement.”

Market for who?

Fertig joins a slate of other millionaire and billionaire investors who’ve bought high-profile commercial properties in the North Valley. In 2018, Vail Resorts bought Crested Butte Mountain Resort and introduced the Epic Pass. Mark Walter, who runs the investment firm Guggenheim Partners and owns the Los Angeles Dodgers, has been purchasing high-profile commercial properties on Elk Avenue over the last several years. He also bought the Almont Resort. 

Crested Butte has only a few traditional hotels left, now mixed with the growing vacation rental market and luxury hotels. Many tourists stay in Mt. Crested Butte at places like the Lodge at Mountaineer Square and Elevation Hotel and Spa, both nearer to the ski resort. But market demand for more high end hotel rooms persists in the North Valley, said Brian Cooper of Bluebird Real Estate. 

Stomp’s focus is on “high barrier-to-entry markets and master planned resorts” within the hospitality industry. On X, Fertig called Crested Butte “one of the most restricted markets in the country for new supply,” citing decreasing short term rental opportunities due to the town’s regulation. 

Resort towns, including Crested Butte, have tried to control the influx of second homeowners short-term renting their properties. In the last five years, the town has both capped the number of STRs in certain zones and levied an excise tax to support affordable housing projects. For Fertig, the hotel market offers a way around these volatile and increasingly restrictive STR regulations.

But as regulation further restricts the STR market, desire for these resort town’s unparalleled mountain vistas and recreation opportunities is growing. As a result, STR regulation remains embattled in the state legislature, or through ballot initiatives and local ordinances. Purchasing properties with more traditional hotel zoning reduces this regulatory risk for investors, Fertig said. 

“What we found is a very good approach is to buy legal hotel zoning that hasn't been scrutinized or questioned or come under the gun,” he said. “In fact, in many cases, people want to preserve [these buildings], and that's where they want the tourists to stay.”

(Abby Harrison can be contacted at 970.641.1414 or abby@gunnisontimes.com.)

(Bella Biondini can be contacted at 970.641.1414 or bella@gunnisontimes.com.)