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HOTEL RESERVATIONS

THE CITY OF DENVER HAS SUNK MORE THAN $2 MILLION INTO THE HISTORIC ROSSONIAN HOTEL. BUT CHECK OUT ITS ECONOMIC-DEVELOPMENT PLAN.

Paul Steward Collection/Black American West Museum
From the outside, the old Rossonian Hotel building looks like Denver's latest economic-development success story. The former jazz mecca, an historic and architectural landmark in the city's Five Points neighborhood, is nearing completion after a publicly funded makeover that has cost more than $2 million. What was until recently a boarded-up wreck has been reincarnated as a brand-new office building. The top two stories are fully leased to the Denver Housing Authority, and plans are afoot to install an upscale nightclub on the ground floor. If those plans pan out, live music will emanate from the grand old hotel for the first time in a generation. For Denver city officials, who have been trying to resuscitate the Rossonian for years, it's a dream come true.

From the inside, however, rough edges are beginning to show in the ambitious city-sponsored venture.

Tom Yates, the 47-year-old developer who has headed up the Rossonian initiative since its inception four years ago, seems to have spent much of his recent business career on the edge of a financial precipice. He presided over the demise of an insurance company now being liquidated by Colorado regulators and, according to court documents, deliberately misled state attorneys who took over American Woodmen's Life Insurance Company when it went into receivership. And he's had problems paying taxes. In 1991 the Internal Revenue Service slapped a lien on his house for nonpayment of federal taxes (records show that the taxes have since been paid and the lien has been released). State regulators say that in 1992 Yates used a company bank account to pay off a six-year-old personal tax debt to the Colorado Department of Revenue.

A nonprofit group formed last December at the insistence of regulators is supposed to be watching over the Rossonian's progress. But two of that group's five directors have already resigned from the board. Of the remaining three directors, two were unavailable for comment. The other boardmember is Tom Yates.

There are questions about whether a nightclub--the type of business venture that would be inherently risky even with massive financial support and a prime location--should be the focal point of a project being backed by taxpayers. And the city's past track record on Rossonian redevelopment also isn't encouraging. In 1986 the Mayor's Office of Economic Development (MOED)--controlled at the time by former mayor Federico Pena--loaned $378,000 to the then-owners of the building, who hoped to redevelop the structure. They used the money to buy a nearby lot for off-street parking as well as for architectural drawings and other "soft costs." A year later the group defaulted on the loan, and the city wound up owning the property.

But Bill Lysaught, deputy director of MOED and point man on the Rossonian for the administration of Mayor Wellington Webb, says the public has no cause to worry about the project. Anyone concerned about the Rossonian just has to walk a few blocks north on Welton Street, he says, and look at Five Points Plaza, a small shopping center Yates developed with a MOED loan in the Eighties. The plaza, now fully leased and successfully servicing the debt on the $1.5 million city loan, is a "magnificent achievement," Lysaught says, especially considering business conditions in this blighted part of the city.

"I would give him, on a scale of one to ten, a `ten' on his management of Five Points Plaza," Lysaught says of Yates. "I'm confident every penny [that went into the Rossonian] is going to come back."

In 1939, when he was still a teenager, Denver resident Shelley Rhym moved with his mother to an apartment at 2630 Welton Street, two doors down from the Rossonian Hotel. His bedroom was perched above a pawn shop; to Rhym, an aspiring drummer, it was the best seat in the house.

Every night, it seemed, great music came to Rhym through the window from bands playing the Ex-Servicemen's Club across the street. And the biggest names in black music--among them Duke Ellington, Count Basey, Fats Domino and Ella Fitzgerald--could be seen regularly at the Rossonian, where they stayed while passing through Denver on their way to Kansas City or the West Coast.

"It inspired me to play," says the seventy-year-old Rhym, who went on to have a long career as a jazz musician. "It couldn't have been a better environment."

Then, as now, Five Points was the center of activity for Denver's black community--home, it was said, to more black-owned businesses than any American neighborhood outside of Harlem. And the Rossonian was Five Points' natural hub: It was one of the largest buildings on Welton Street and actually stood at the five-cornered intersection that gives the commercial district its name. "The Rossonian represents the cultural history of the African-American renaissance," says Denver City Councilman Hiawatha Davis. "It's a very, very important piece of property."

Over the last thirty years, however, both the neighborhood and the hotel have suffered a long, steady decline. Five Points has become synonymous with crime, drugs and urban decay. The Rossonian lost its jazz lounge in the Sixties, served as a strip joint for a while and later shut down completely. Since then it has been a home only to pigeons and transients.

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