El Jebel developers settle pay feud with contractors
EL JEBEL ” A midvalley luxury townhouse project has settled a dispute with its contractor and subcontractors by paying 75 cents on the dollar for about $3 million in unpaid construction bills.
Blue Ridge Investments was crippled last summer by the credit crunch. Work stopped on the project across Highway 82 from the El Jebel City Market. Construction firms ranging from excavators to painters filed more than 50 liens against the property seeking payment of unpaid bills.
Lou Reese IV, a member of the ownership group, said the initial creditors of the project provided additional financing that allowed an agreement with the construction firms. He said he couldn’t discuss details of that agreement. Colorado Capital Bank of the Eagle Valley was the initial lender.
David Heyl, owner of an excavation firm that claimed it wasn’t paid for $1 million of work at Shadowrock, said he accepted the offer of 75 cents for each dollar he was owed. He said it was his understanding that all construction firms were offered the same deal. Heyl and his firm, Heyl LLC, were also given a promissory note for the remaining $250,000 on that bill. Blue Ridge Investments agreed to try to pay the remainder within three years.
Heyl said he reluctantly accepted the offer.
“It was the best alternative situation,” he said. “I don’t believe it’s acceptable, but it’s better than a legal battle.”
Seeking full payment via the courts could have taken years and hefty legal fees, Heyl said.
Most of the liens filed against Blue Ridge Investments have been released since Feb. 5, according to information filed with the Eagle County Clerk and Recorder. That means the construction firms have dropped their claims to any proceeds from a sale of the property.
Now that the liens have been addressed, Blue Ridge Investments aims to resume work on the stalled project this spring. “We’re in a position to move forward,” Reese said.
Eagle County granted approvals for 100 units. Thirty units were in the first phase, and 23 of those were completed. The foundations for the next phase were poured but haven’t been touched since last fall.
Reese said the lenders still believe Shadowrock can be a successful project despite the sour economy. The bankers saw the project as “the best product” because of its energy-efficient design and the overall craftsmanship, he said.
Blue Ridge Investments has a number of ideas to jump-start sales. Reese said real estate agents will be offered an additional 1 percent for their commission on sales. The intent is for the extra fee to go to brokers, not brokerages, he said.
In addition, the owners will offer assistance to buyers who want to install solar electric panels on their units or acquire hybrid vehicles. “It’s almost like a shopping trip for products that match our principles,” Reese said.
A more traditional incentive ” financing of mortgages ” will be offered to qualified buyers.
Although construction firms had to wait for six months to collect payment for their work, Reese expressed confidence that companies will be willing to work on the project.
“All of those contractors would be ecstatic to work with us tomorrow,” he said.
Heyl said he would return to work at Shadowrock only if certain conditions were met. The promissory note he received for $250,000 must be paid, and Blue Ridge Investments must possess a letter of credit or escrow account showing they could pay for future work, he said.
The three- and four-bedroom units as Shadowrock were selling for more than $1 million when the real estate market tanked. It is uncertain what they will sell for now.
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