Bank lone bidder in Aspen ‘restaurant row’ foreclosure sale
November 19, 2015
There was no bidding war Wednesday over a downtown Aspen building — just an assembly of curious onlookers and a bank that got what it wanted.
Note holder Alpine Bank repossessed the building at 308 E. Hopkins Ave. — with the exception of its upstairs penthouse — after being the sole participant in Wednesday's foreclosure auction.
Local attorneys, investors and other business types showed up in front of the Pitkin County Courthouse to see how the auction would pan out, but Alpine went unchallenged, finishing what it started when it launched foreclosure proceedings in July.
Bill White, president of the Aspen branch of Alpine Bank, declined to say if and when the building will be marketed for sale, but he said there are no intentions to keep the property.
"We generally don't want to sit on real assets any longer than we have to," he said. "Our intent would be to not keep it on the books any longer that we would have to."
Alpine placed a bid just over $5.5 million, some $200,000 more than it loaned to development group JW Ventures in February 2010. JW had owed an outstanding balance of nearly $4.9 million.
Recommended Stories For You
JW had avoided foreclosure over the years with loans from several investors, including developer Mark Hunt's $500,000. Hunt, who had the building under contract to buy for $6 million for nearly two years, didn't attend the auction.
Hunt has a $500,000 lien on the property. Another lender, Pelham Holding, has $500,000 in liens on the building. Additionally, couple Michael Sedoy and Natalia Shvachko, who own the top-floor penthouse, have a $1.29 million lien on the building. That's the amount a district judge awarded the couple after determining JW Ventures wrongly assured them they would have exclusive rights to the building's front entrance, east stairway and main elevator. The judge also ruled that the couple violated a city of Aspen ordinance by barring renters of affordable-housing units in the building from using the access.
Alpine Bank's note, however, took priority over those liens.
The change of ownership won't be official until the redemption period for the junior lien holders passes. Those lien holders can file what's called an "intent to redeem," by Dec. 2. In other words, any of those lien holders could pay Alpine Bank the amount it bid and take possession of the building, provided only one notice of intent is filed, said Holland & Hart attorney Christopher J. Heaphey, who represents Alpine Bank.
Sedoy and Shvachko, the junior lien holders and penthouse owners, took federal court action Sept. 30 seeking an injunction to stop the sale. But last week, they dropped Alpine Bank and the Pitkin County trustee from the suit, setting up the foreclosure sale. Other defendants — including Hunt, Pelham Holding, JW Ventures, building tenant Bootsy Aspen and Aspen law firm Oates, Knezevich, Gardenswartz, Kelly & Morrow PC — remain defendants in the suit, which was filed in the U.S. District Court of Denver.
The couple, who are from New York, have previously sued over noise coming from nearby neighbors and tenants of the building. They bought two condos in the building for $6.27 million in June 2011, later spending another $2 million to combine them into a penthouse.
White said it didn't surprise him that Alpine Bank was the auction's sole participant, mainly because the building has been fraught with legal woes.
"I think that obviously with all the activity on this building and the chatter in the papers, everybody know about the story of this building," he said.