Restaurant row building in Aspen goes to foreclosure auction this week
November 16, 2015
A downtown Aspen building will head to a foreclosure sale this week unless its debt-ridden owners can cure an outstanding loan default of nearly $5 million.
The sale of two commercial and three affordable-housing units in the building at 308 E. Hopkins Ave. is set for Wednesday on the front steps of the Pitkin County Courthouse.
The foreclosure auction had come into question after couple Michael Sedoy and Natalia Shvachko, who own an $8 million-plus penthouse on the building's top floor, filed a federal suit seeking an injunction to prevent the sale.
But last week, the New York couple dismissed Alpine Bank, one of a collection of defendants in the suit, from the case. With the bank no longer a defendant, the foreclosure is on schedule to proceed, attorneys said.
"Absent of anything happening with the court, or the note being cured, it will go as planned," said Pitkin County Attorney John Ely.
Alpine Bank attorney Chris Heaphey also confirmed the sale is on schedule.
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Ely has been following the case because county Treasurer Tom Oken also is a defendant in the suit. Oken was named simply because his office oversees foreclosure actions.
This week's auction would come after JW Ventures, composed of a trio of Aspen investors, defaulted on a loan from Alpine Bank. The group, which has until Tuesday to cure the note, currently owes $4.8 million on the $5.3 million fixed loan it took out in February 2010, according to county records.
The building, located in the heart of Aspen's restaurant row, has been at the center of litigation in both the state and federal courts.
Sedoy and Schvachko are owed a $1.28 million Pitkin County District Court judgment against JW Ventures. The couple also have a $1.28 million lien on the units owned by JW Ventures.
In the case, now-retired Judge Gail Nichols also ruled that the couple violated a city of Aspen ordinance by barring renters of affordable-housing units in the building from using the building's front entrance, east stairway and elevator.
The couple often have complained about noise coming from nearby commercial tenants, such as the Aspen Brewing Co., which is next door. More recently, they have pursued legal action against their downstairs neighbor Bootsy Bellows, which operates in the space originally occupied by Syzygy restaurant.
The couple's federal case in Denver, meanwhile, claims Aspen developer Mark Hunt floated $500,000 to JW Ventures to help it stave off foreclosure and fund its legal defense. Hunt also has a $500,000 lien on the property, which the new owners would be obligated to pay before buying the building.
Hunt, who has had the building under contract for $6 million for nearly two years, said last week he has no intentions to try to buy it out of foreclosure unless the price is much lower.
The couple's federal suit had argued that selling the building for a cut-rate price at foreclosure would queer their chances of collecting the full judgment from JW Ventures, their suit says.
The couple's attorney, Thomas Bell of Denver, didn't respond to messages last week seeking comment.