Denver private-equity firm KSL Capital Partners LLC has purchased the InterContinental Montelucia Resort & Spa, a 293-room luxury property in Scottsdale, Ariz., near Phoenix.
A statement Monday from KSL did not indicated the seller or the purchase price. However, the Wall Street Journal reports that KSL paid $115 million to five banks, led by Germany's Eurohypo AG, that foreclosed on the property two years ago, shortly after it opened in late 2008.
The Spanish-style resort cost $270 million to build, the Journal's Kris Hudson reports. He said the development project was plagued by cost overruns, construction delays and unlucky timing, given its opening at the advent of the recession.
The InterContinental Montelucia includes five pools, a 31,000-square-foot spa, and 90,000 square feet of meeting space.
In its statement, KSL indicated it will drop the InterContinental brand from the resort's name but it will remain a part of the InterContinental Hotels & Resorts (LON: IHG) reservations and rewards program.
KSL's resort management affiliate will take over management of the property from InterContinental. KSL Resorts manages seven other hotels, including Vail Mountain Lodge & Spa as well as four in sourthern California.
“Montelucia Resort & Spa has quickly become the preeminent luxury resort in the Scottsdale area, offering the services and amenities that today’s travelers demand in an unparalleled setting,” Bernard Siegel, principal at KSL Capital Partners, said in the statement. "Moreover, Scottsdale is one of the most desirable vacation spots in the United States."
KSL Capital Partners has been an active buyer lately. In April, it announced it was buying The Royal Palm Hotel in Miami Beach, which also had been through foreclosure, for $130 million. The hotel has $42.5 million in renovations planned.
And last November, it announced its plans to acquire Squaw Valley USA at Lake Tahoe, one of California's largest ski resorts and the site of the 1960 Winter Olympics.
KSL Capital Partners co-founder and co-managing director Michael Shannon was president of Vail Associates, a predecessor of Vail Resorts, from 1985 to 1992, and KSL co-managing director Eric Resnick also is a former Vail executive.
Shannon was a founder of KSL Recreation Corp., a portfolio company of Kohlberg Kravis Roberts & Co., in 1992. KSL was launched in its present form in 2005 by Shannon and Resnick.
Read more: InterContinental Montelucia Resort sold to KSL Capital Partners | Phoenix Business Journal