The curved glass of the Eagle Bahn Gondola fogs up with the labored breath of six skiers. But through the haze we can all see the stunning view: a panoramic vista of the massive changes going on hundreds of feet below us in the Vail Valley. New buildings, not yet grimy from winters of snow and ice, huddle at the base of the mountain. Cranes swing across the skyline. Construction workers scurry to erect the highly anticipated Ritz-Carlton Residences. The newly finished, multicolored faux-Bavarian facade of the Arrabelle at Vail Square—my headquarters for the weekend—basks in the afternoon sun. The scene, on which nearly everyone remarks through chattering teeth, is a far cry from the drab concrete jungle that not so long ago characterized Lionshead.

Easing into my gondola seat, I recall my first visit to Vail. I’d just moved to Colorado from Georgia and, like anyone else on the planet, I’d heard only wonderful, over-the-top praise of Vail: gorgeous slopes, luxurious hotels, world-class restaurants, exclusive retail shops—an unequaled American outpost of opulence. But when I arrived in the winter of 2001, I was underwhelmed. There were ski bunnies flaunting expensive fur coats, yes, but the Village’s restaurants offered little more than overpriced resort food; the lodges didn’t have the spit-shined look of top-notch luxury hotels; and sprawling aboveground parking lots detracted from the quaintness Vail’s architects had hoped for. The clunky Lionshead area—built with 1970s, Communist Bloc-style architecture—looked more like Dresden, Germany, than a ritzy enclave for the country’s elite slope seekers.

It hadn’t always been that way, of course. Blessed with an unparalleled mountain at its back, the town of Vail was incorporated in 1966, just four years after Pete Seibert and Earl Eaton opened Vail Ski Resort. Planned to offer a Tyrolean Alps-style experience, the Vail Village’s pedestrian mall, covered bridge, and European architecture began attracting thousands in the 1970s. The Lionshead Village popped up quickly thereafter, displaying a more modern architectural look. The town was prospering, and the core of the valley was built out by the late 1970s.

Fast-forward through the 1980s, when Vail was still ahead of the ski-town curve, to the early 1990s. “Vail just went quiet for a while,” says Rob Katz, CEO of Vail Resorts, which owns the ski mountain and portions of the adjacent base village. “Everything—hotels, retail, condos—was becoming a bit dated.” As early as 1992, Vail Resorts knew a major overhaul, especially of Lionshead Village, was urgent. But it wasn’t going to be easy. “It takes a long time to build consensus in a town like Vail,” says local resident and Eagle County commissioner Arn Menconi. “But everyone agreed that Lionshead needed a wrecking ball.”

Renovation of Lionshead meant complete demolition of two giant properties and fully re-landscaping the public spaces. It also meant supplanting the bridge that transported skiers across Gore Creek into Lionshead Village and planning a new parking structure. By 2000, Vail Resorts began a $1 billion renaissance of its crown jewel property (the publicly traded company also owns Beaver Creek, Breckenridge, and Keystone ski areas). The extensive plan included a $480 million makeover to Lions-head, a $100 million update to the famous Vail Village, and the infusion of several multimillion-dollar private-chalet developments. Vail Resorts’ far-reaching strategy had a target end date of 2010.

Back on the gondola, as the last views of the valley floor drift out of sight, I realize that Vail is closing in on its goal. In the past 24 hours, I’ve seen glimpses of the Vail I had hoped to meet seven years ago. A renewed energy buzzes in the reimagined spaces of Lionshead Village. The heated cobblestone walkways, the outdoor ice skating rink, the cozy fire pit, the handful of new boutiques and eateries—they all cluster together in Vail Square like the “in” crowd, confident and beautiful. There are people—tourists, locals, skiers, boarders, folks out for a bite to eat—everywhere. And at the center of this most western portal of town rests the Arrabelle, the elegant RockResorts property that stands out as the quintessential example of what the new Vail intends to be.

“The whole thing really started with Lionshead,” says Rob Katz of the town’s revitalization. “It was the most dated, the most worn down, the least beautiful part; so that’s where we started.” But the massive project of updating Vail, which gained momentum between 2000 and 2003, has been a collaborative venture between the community, the town council, private developers, and Vail Resorts. “Vail just wasn’t keeping up with the times,” says Katz. “And given the high quality of the skiing experience, we knew the town needed to be stronger.”

Heeding the advice of focus groups in Illinois, New York, and Texas, the town, private developers, and Vail Resorts placed a high priority on improving non-skiing-related amenities such as restaurants, spas, retail space, and lodging and residences. The Solaris, a privately funded development slated to open in the summer of 2009, will bring a movie theater, bowling alley, shops, restaurants, residences, and open-air market space within a whisper of Vail Village. That endeavor, along with the refurbishment of Vail Square, the new Front Door area around the Vista Bahn (with a new skier services building, coffee shop, bathrooms, and ski school), and the as-yet-to-be-completed Four Seasons and Ritz-Carlton Residences, brings an infusion of convenience, activity, and überluxury that Vail hasn’t seen in decades.

Of course, for the last couple of years, the growth has also led to construction woes. Ubiquitous dump trucks, orange cones, and cranes have dotted the valley floor and mucked up the roundabouts. The number of construction workers has rivaled the number of skiers. Locals have just about had it with the traffic and the noise. But Rob Katz says Vail visitors, especially those who plan to spend their days on the slopes, will notice significantly less mess this year. “Nearly 90 percent of skiers enter Vail through Vail Village or Lionshead,” says Katz. “Both portals have been completely revamped, everything is brand new, and it’s all completely finished and ready for the 2008-09 ski season.”

Building though will press on in other areas. “There’s a lot of construction that will continue to go on,” says Keith Fernandez, president of the Vail Resorts Development Company. “Right now there are projects still in the planning stages, like Ever Vail [an as-yet-to-be-approved $1.5 billion, LEED-certified megavillage in West Vail], that won’t be finished for years.” And that’s really part of the overall goal: to avoid shortsighted resort planning and take a methodical and ongoing approach that will continue to improve the town year after year and well into the future. “We wanted to secure our place as the country’s best ski resort,” says Katz. “We have the best mountain. We will have the best village—just give us time.”

Back at the Arrabelle after a day of epic turns—and one yard-sale crash on Pride—my husband and I snuggle into our plush king-size bed and flip on the in-room gas fireplace. We’re wiped out and our legs are burning, but it’s hard to complain: Not only did our ski-and-boot valet carry our gear to and from the gondola, our “personal butler” (OK, each floor shares a butler, but still…) just delivered a complimentary tray of après-ski chocolate-covered strawberries to our room.

As the first luxury hotel to open in Vail in more than 25 years, the Arrabelle could have gone too far, could have tried too hard to be over-the-top extravagant. Instead, the high-ceilinged lobby with a striking fireplace and oversized couches and chairs feels gracious. Centre V, the Arrabelle’s on-site French brasserie, oozes sophistication with its fruits de mer station and expensive Parisian menu, yet there’s a distinct air of approachability. If there’s one area where the Arrabelle does go all out, it’s in the service—and there’s nothing wrong with a little overachievement when it comes to a knowledgeable and responsive staff.

If the Arrabelle is just the beginning of the new Vail, the town is onto something. Vail Resorts, private developers, and the community should do their best to export the Arrabelle’s easy brand of indulgence to the rest of the valley. If that happens, Coloradans and tourists are in for a treat, and Vail will once again live up to its reputation as America’s best ski town.