Vail Resorts is spending millions of dollars to clean up and repair water intrusion that caused mold to grow in the company’s Breckenridge employee housing complex.

When the mold was discovered last fall, nearly 100 tenants were asked to move out and the 17-building complex on Airport Road has been empty since mid-winter.

According to Rick Smith, vice president of human resources for the company, the last set of 90 tenants moved out at the beginning of January. Experts said a serious health risk was not present, but company officials wanted to be cautious, so they asked residents to vacate their units.

The company estimates the clean up will cost $7 million.

At the beginning of this month, a notice required by the Colorado Construction Defect Act was sent to the architect, contractor and developer, indicating that each party has 30 days to inspect the property and another 30 days to submit a proposal for remediation or compensation.

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“We are going out to bid with other contractors as well, so we’ll be ready to go if we don’t like their proposal,” said Eric Stein, assistant general counsel for the company.

Two of three contracts with developers require arbitration before filing a lawsuit, but Stein said the notice was just the first step in the process associated with the state’s regulations.

Company chairman and chief executive officer Adam Aron said last week the company plans to have “some pretty stern conversations” with project developers. The four-and-a-half-year-old complex cost $20 million.

Stein said the $7 million figure was a “conservative estimate” of the possible cost to fix the damage. The publicly traded company is required by securities law to account for the cost in the quarter it will be billed, so the figure was made public last week. Stein said the company does not know the extent of the work needed, therefore the figure could be more or less than estimated.

Meanwhile, the company is “not too optimistic” that its insurance carrier will cover the costs because of exclusions in the coverage plan, Stein said. “Overall, it’s been a learning experience for everyone here at Vail Resorts,” he said.

Mold is typically associated with wet, dank places but can be a problem in arid climates like Colorado. Here, mold is frequently caused by condensation resulting from temperature variations inside tightly constructed buildings.

When mold was discovered by housing managers last October, the company hired restoration experts to locate it, determine what caused its growth and figure out a way to repair the problem. Experts determined that water intrusion where pipes run into first-floor bathrooms caused mold on the interior of the buildings.

Stein said in December that “block out” holes under each building in the complex were not insulated with foam or concrete; they were left open to the ground, causing moisture to enter. When the problem was discovered, temporary housing and meals were supplied by the company at a cost of about $35,000.

The company secured master leases and provided units at a Keystone employee housing complex, but eventually most of the tenants found housing on their own. Smith said a soft rental market helped deflect the typically challenging problem of finding housing during the first weeks of ski season.

“We’d have been in serious trouble if (the rental market) had not softened,” Smith said. “It was a real bummer for the tenants to have to move but most people understood the situation we were forced in to and did the best they could.”

The company refunded September and October rent payments, and people continued to live free in the complex until January. “We asked everyone to move out by Nov. 15 but we kept extending it,” Stein said. “Anyone living there after Nov. 1 was living rent-free, which led to some folks saying, ‘Well, why move out?'”

The company aims to have part of the property ready for occupancy by Nov. 1.