Business Monday: As Aspen Club chips away at debts, settlement in the works
From foreclosure actions to litigation to liens, there have been plenty of red flags casting a dim outlook on the redevelopment of the Aspen Club.
Yet in recent months, seven subcontractors on the redevelopment project, which has been at a near standstill since last fall, have been paid back. That includes PDM Steel, which was owed $106,103, and Elam Construction, which was due $88,179; on April 25, both released their mechanics’ liens they placed on Aspen Club in October, according to records at the Pitkin County Clerk and Recorder’s Office.
“The general message is people are putting everything on hold, and are hopeful and optimistic that (Michael Fox, president of the Aspen Club) get his financing and gets the project done,” attorney Mike Sawyer said.
Sawyer represents subcontractors that say they are owed by Aspen Club and Denver general contractor PCL Construction Services Inc.
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A seemingly complex web of loans, debts, contracts and liens are part of PCL’s lawsuit that it filed in November against the Aspen Club in Pitkin County District Court. Sawyer has seven or eight clients that are party to the litigation, including Gould Construction, which claims it is owed roughly $1.5 million. All told, the liens against the Aspen Club and PCL Construction total more than $24 million.
Another foreclosure action in court was brought on by GPIF Aspen Club LLC, which in December acquired a $45 million loan FirstBank gave to Aspen Club in May 2016. Pitkin County District Judge Chris Seldin signed an order in February allowing for a foreclosure after GPIF Aspen Club said Aspen Club owed $10.7 million on the note.
GPIF also has made a run at foreclosure through the Pitkin County Treasure’s Office, which over the months has continued to postpone the cure date; the deadline now is Tuesday.
Earlier this month Sydney Tofany, Pitkin County’s chief deputy treasurer and deputy public trustee, said the continued postponements indicate something is happening behind the scenes with the lender.
On Friday, Fox maintained that a new lender — an insurance company that puts money into real estate deals — is set to enter the picture within the next month.
“We’re at the stage where we’re herding cats to get everyone across the finish line,” he said.
Adding that no deal is done until it’s done, Fox said it’s a long shot that Aspen Club could declare bankruptcy, but it is an option.
“We’ve got two paths,” he said. “We may all agree to go through bankruptcy to clean it all up. And that would be done voluntarily.”
That’s a last resort, he said. “The path we’re going down right now is to get everyone together and start moving forward,” he said. “That’s where we’re spending 99 percent of our time.”
PCL, whose regional manager could not be reached for comment, is simply protecting its business interests through litigation, Fox said.
“We all have lawyers, and everyone needs to protect their downside,” he said.
Said Sawyer: “Things are kind of on hold. Everybody has crossed their fingers for Mr. Fox’s success.”
Documents in PCL’s lawsuit say that “potential for settlement of this action … may occur in June.”
June 29 is the deadline for parties in the suit to notify the court of a settlement and refinancing. A case-management order in the case notes that at a May 2 settlement conference, “Defendant Aspen Club Redevelopment Company LLC indicated to all parties that it is working to refinance the project that is the subject of this action on or before June 29, 2018. Aspen Club intends to pay amounts due or owing to the parties in connection with the closing of such refinancing. The parties are currently conferring regarding the amounts due or owing in advance of such closing. The parties anticipate the case will be resolved in its entirety or in significant part by such refinancing (if it occurs).”
The Aspen Club closed in April 2017 for the redevelopment project, which calls for a remodeled 40,000-square-foot Aspen Club & Spa building. Also included is a 54,000-square-foot lodge with 20 timeshares, which comprises 36,000 square feet of townhouse units and 18,000 square feet of club units. Another 13,600 square feet of development would account for 12 multi-family affordable-housing units.
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