It was a cold call that led Clay Bales to warm up to the San Juans.

Five years ago, he picked up the phone and dialed the number for Jason Raible, the listing agent for a Ouray bed and breakfast that was on the market. Bales, who worked for an investment firm in Denver at the time, listened to Raible’s pitch before deciding it wasn’t the right opportunity.

But for Bales, the introduction sparked an obsession with the region. He and his wife moved to Montrose. The hospitality professional who previously worked for Hilton and KM Hotels, an East Coast hotel management company, ultimately reconnected with Raible to purchase a historic building in downtown Montrose in 2022 and open the Rathbone Hotel last year.

The two partnered again this summer, turning their gaze 35 miles to the south in Ouray to buy the St. Elmo Hotel and the Bon Ton Restaurant — which they’ve rebranded as the St. Elmo Tavern — from father and son David and Blake Baggett.

County records show Bales and Raible bought the property at 426 Main St. for $3 million.

The purchase marks the latest change in ownership of historic hotels in Ouray, following the Western Hotel and the Beaumont Hotel changing hands in 2021 and 2023, respectively.

Bales, who considered the Beaumont before it sold to the current owners, stumbled upon the St. Elmo in 2022 when a family trip detoured into Ouray because he needed an internet connection for an afternoon of work.

“I just remember walking in and my jaw hitting the floor,” he said. “It felt like this was the least activated of the historic properties. It felt like it had the most history that was the least told.”

He told the Baggetts to call him if they were ever interested in selling the boutique hotel.

Commercial property sales in general — and hotel transactions specifically — can be complicated and take time to piece together. Bales said the standard timeframe is 180 days. The St. Elmo deal came together in 60.

‘It does need some love and attention’

The St. Elmo and the Bon Ton both planted their roots in Ouray’s nascent hospitality scene in the late 19th century. But the fact that they took divergent paths to the present day played a big factor in how Bales and Raible viewed their futures.

The Bon Ton originally opened as a dance hall in 1886 before becoming a renowned Italian restaurant. Entrepreneur Kittie Heit acquired the Bon Ton in 1890 and parlayed her success with it into establishing the St. Elmo in 1898.

But while the St. Elmo has continuously operated in the same location for the last 127 years, hosting early-day miners and travelers alike, the Bon Ton’s history is more of a series of fits and starts. Its original location was torn down in the early 1900s. It has opened and closed multiple times over the years, and it was shuttered for months before Bales and Raible bought the hotel and restaurant in June and discovered the restaurant’s pastry kitchen had been turned into a storage closet.

The two wrestled with the name change and were still considering keeping the Bon Ton two weeks before they reopened the restaurant. They ultimately decided it was time to usher in a new era for the St. Elmo, and that meant a new menu featuring upscale American tavern fare with ingredients sourced from Colorado ranches and farms. Starters include elk meatballs, bison empanadas and roasted beet salad. Entrees range from steaks and chicken to fish and a vegetarian quinoa bowl, aiming to satisfy a variety of palates.

Bales and Raible rebranded the Bon Ton restaurant as the St. Elmo Tavern, with a new menu featuring upscale American fare with several Colorado-sourced ingredients. Courtesy photo

Bales and Raible say they want the tavern to become a regular hangout for locals and visitors alike, not just a special destination for a birthday or anniversary.

“The goal is to make the food more approachable,” Raible said. “We want you to come twice a week rather than once a year.”

Alterations to the St. Elmo are already under way or in the planning stages as well. Bales and Raible said the previous owners treated the 11-room hotel more like a bed and breakfast, offering guests full made-to-order breakfasts. They’ve shifted toward to-go options with good coffee.

They intend to carry out a full renovation over the winter, with new mattresses and upgraded plumbing and electrical service. For the first time, each room will boast air conditioning. It’s an attempt to maintain the hotel’s historical features while offering modern conveniences.

“The goal is not to try to fix this place. The St. Elmo doesn’t need fixing. But it does need some love and attention,” Bales said.

The St. Elmo Tavern is open for food and cocktails from 3-9 p.m. every day but Monday. For more information, visit stelmohotel.com.