Aspen lodge developer’s debt is $34 million | AspenTimes.com

Aspen lodge developer’s debt is $34 million

Carolyn SackariasonThe Aspen TimesAspen, CO Colorado

ASPEN – The development company that has plans to build a hotel at the base of Aspen Mountain and filed for bankruptcy last week has $34.6 million in debt and assets worth $31.5 million, according to court documents.Aspen Land Fund II, which is a subsidiary of Newport Beach, Calif.-based Centurion Partners, owes $22 million to Alpine Bank and $4.9 million to South Aspen Real Estate LLC, which was financed by Goldman Sachs, according to the company’s Denver-based bankruptcy attorney, Harvey Sender.About one dozen creditors are owed money by Aspen Land Fund II, according to the Chapter 11 voluntary petition, filed Friday in U.S. Bankruptcy Court in Denver.Other debts include $86,190 to Ajax Mountain Associates in rent for Centurion’s Aspen office, as well as $14,281 in attorney fees to Denver-based attorneys Holland & Hart. Other creditors holding unsecured nonpriority claims include Centurion Partners for $302,838 and HKS architects based in Dallas for $8,756. Aspen-based Poss Architecture and Planning is owed $150,000 and local architect Reno Smith is owed $683. Los Angeles-based real estate firm Pircher, Nichols & Meeks is owed $28,792, and the Robert A. Hoff and Ann W. Hoff Family Trust in care of Centurion Partners is owed $6.9 million. The Hoff Trust is listed as 48.27 percent owner of Aspen Land Fund II and made an initial capital contribution to the company in 2002 for $3 million.All of the debt “will be addressed under the company’s plan to reorganize,” Sender said.Aspen Land Fund II owns property on the west side of South Aspen Street, where the old Mine Dump Apartments used to be. It’s valued at $30 million, according to court documents. The company’s other asset is a CD valued at $1.5 million. Both assets were used as collateral for the Alpine Bank loan.Aspen Land Fund II was forced to file bankruptcy protection after it learned a third party was attempting to acquire the land and development rights on South Aspen Street. Bankruptcy protection is meant to prevent the loan from being acquired.Centurion Partners, which is represented by local developer John Sarpa, is pursuing approval to build a 160,000-square-foot hotel on the property, known as the Lodge at Aspen Mountain. Aspen Land Fund II was in the process of re-negotiating the terms of the loan with Alpine Bank, located at 600 E. Hopkins Ave., when it informed the company it had entered into an agreement with an unknown third party to sell its loan on the project.”[Aspen Land Fund II] had been current on the loan and the extension was being negotiated,” Sender said. “The bank had agreed to the terms and then we got a letter from the bank.” The third party has stated that its sole purpose for buying the loan is to eliminate Aspen Land Fund II and move forward in building 17 townhomes, which were approved years ago by a previous City Council.Sender said there are rumors as to who the third party is but has no confirmation.The Chapter 11 bankruptcy filing allows Aspen Land Fund II to reorganize its finances and prevents Alpine Bank from foreclosing on the property, Sender said.Sarpa said the company has new capital sources that are in support of the bankruptcy filing, and the investors have a high level of confidence that there can be a reorganization and financing plan developed that will allow the process and the eventual hotel project to be successful. It appears that there are 10 investors with varying percentage interests in Aspen Land Fund II, according to court records. They include several trusts and individuals, including Aspen municipal court judge Brooke Peterson.For the past several months, Sarpa has said publicly that by the end of September he and the partnership group needed to have a definitive direction regarding what type of mixed-use hotel project would be acceptable by the community and elected officials at the Lift 1A site on the western side of Aspen Mountain. The land-use proposal has been in the works for six years, and has been shot down by the Aspen City Council twice. The most recent was in January when the council voted to send the development proposal to Aspen voters, but then pulled the May ballot measure so developers could regroup. Sarpa is currently engaged with a citizen-based task force called the Lodge at Aspen COWOP (convenience and welfare of the public) to address the hotel’s scale and mass before it goes before the Aspen City Council again for review.csack@aspentimes.com