New York couple to gain control of Aspen restaurant-row building
January 22, 2016
The owners of a downtown Aspen penthouse have taken steps to gain control of the building beneath them, a move that could signal the end for a nightclub that has been the latest source of consternation for them.
New York married couple Michael Sedoy and Natalia Shvachko filed what's called a "notice to redeem" with the Pitkin County Treasurer's Office on Wednesday, effectively thwarting developer Mark Hunt's plans to buy the litigation-prone property at 308 E. Hopkins Ave.
The couple's move came on the last day to file the notice. In December, Hunt, who had a $500,000 lien on the building, filed a redemption notice to acquire the property from Alpine Bank, which repossessed it at a foreclosure auction in November with a bid of $5.5 million.
Hunt had superior rights over the four other lienholders. Three of them, however, didn't file to redeem. Hunt was made whole on his lien by the Sedoy couple, who are believed to have lined up investors for the property.
"It sounds like they are involved in the group that's buying the building," Hunt said. "And it makes a lot of sense for them."
Two other sources knowledgeable of the deal said the couple have investors.
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Sedoy did not respond to an email seeking information for this story.
"At this point, they have paid off everything, but the confirmation deed had not been issued yet," said Pitkin County Chief Deputy Treasurer Syd Tofany, noting the couple paid a grand total of $6.1 million to cover the building cost and Hunt's lien.
The property includes two commercial and three affordable-housing units. The ground-level commercial space, once used by the Ute City bar and grill, is currently vacant.
Sedoy and Shvachko bought two condos in the building for $6.27 million in June 2011, later spending another $2 million to combine them into a penthouse. The building is located in the heart of Aspen's so-called restaurant row, a vibrant block for dining and entertainment.
Bootsy Bellows in jeopardy?
Less clear is the fate of Bootsy Bellows, a basement spot the couple is suing in federal court. The nightclub and restaurant runs on a month-to-month lease, said operator Andrew Sandler.
"Congratulations to whoever purchases the space," he said. "We look forward to amicably working something out so we can stay, or we'll have to move to a bigger and better space."
Sandler said he didn't see Wednesday's development coming.
"My lease was going into effect this week with Mark Hunt," he said.
On Sept. 30, Sedoy and Shvachko filed suit in the U.S. District Court to stop the foreclosure sale. They later dropped Alpine Bank and the Pitkin County trustee from the suit, setting up the sale.
Other claims in the lawsuit are pending against Bootsy Bellows and Sandler, which is accused of violating the building's declarations because it operates as a nightclub. The suit also accuses Booty Bellows of being noisy and interfering with the couple and their child's quality of life.
Sandler has maintained it also is a restaurant, which makes it eligible to occupy the space. A menu outside of Bootsy Bellows on Wednesday showed appetizers, salads, entrees, steaks, chops and sides. Appetizers start at $10; a 24-ounce ribeye commands $40.
"The one thing Bootsy Bellows has done was to start making Aspen a destination spot again for more than just skiing, but having a nightclub that's known around the country," Sandler said. "By having nightclubs around the country, and even the world, that helps bring in the big spenders that Aspen needs to keep thriving."
There is a Bootsy Bellows nightclub in Los Angeles, often the subject of tabloid fodder because of its celebrity sightings. It and other trendy nightclubs throughout the country are run by h.wood.group.
Sedoys keep litigating
Also named in the suit is JW Ventures and its principals — Charles Cunniffe, James Farmer and John Provine. JW Ventures developed the building and defaulted on the loan that set up the foreclosure sale. It is in default on a $1.28 million court judgment to the couple.
A Pitkin County district judge awarded that amount after determining JW Ventures wrongly assured Sedoy and Shvachko they would have exclusive rights to the building's front entrance, east stairway and main elevator. The judge also determined the couple violated a city ordinance by barring renters of affordable-housing units in the building from using the elevator.
City Attorney Jim True said the couple must still abide by the judge's order requiring them to share the elevator with the affordable-housing tenants, regardless if they own or gain control of the building.
"They would still have to comply with the ruling," he said.
Defendants in the suit claim the couple is repeating allegations in federal court that already were settled in Pitkin County District Court. The couple currently has no attorney in the federal case. Denver lawyer Thomas Bell removed himself from the litigation in December.
Earlier this week, a federal judge denied the couple's request for more time to make filings in the case, which also had targeted Hunt for alleged dirty dealing because he floated a $500,000 loan to JW Ventures to keep it out of foreclosure. Hunt was dropped from the case in December.
The couple's issues with the building also have been heard in Aspen Municipal Court, where a jury in January 2014 ruled that Aspen Brewing Co. didn't violate the city noise ordinance. The trial came after Sedoy and Shvachko made repeated noise complaints to the Aspen Police Department, which cited the brewery three times for exceeding the city's 60-decibel noise limit after 9 p.m. The upstairs brewery is located in a building flanking the couple's penthouse.