Roaring Fork Lodge files for Chapter 11 protection
DENVER – Developers of the Roaring Fork Lodge project in Glenwood Springs have filed for Chapter 11 bankruptcy protection in United States Bankruptcy District Court in Denver.
The Roaring Fork Lodge was approved as a 106-room hotel and 40-unit luxury condominium development project to be built on the former Sunlight Racquet Club site at Midland Avenue and 27th Street.
“The corporation is insolvent and unable to pay its debts when due,” according to documents filed by Roaring Fork Lodge LLC with the bankruptcy court on Dec. 10 and posted online. “The corporation and its creditors would best be served by reorganization … under Chapter 11 of the Bankruptcy Code.”
The filing, signed by Patrick Henry as a manager member of the LLC, lists four primary creditors, to which more than $213,000 is owed. The largest debt is to a Denver architectural firm, S-Arch, which is owed $114,388, according to the bankruptcy documents.
Other creditors and amounts owed include McGlamery Structural Group Inc., of Denver ($52,210); Neenan Construction of Fort Collins ($35,000); and Red Mountain Civil of Silt ($12,000).
The filing indicates that Roaring Fork Lodge LLC has estimated assets of between $1 million and $10 million, although a specific figure is not listed in the documents.
Chapter 11 bankruptcy is a section of the federal bankruptcy code that allows a debtor to continue in business and to possess property, while in the process of reorganizing.
How the bankruptcy will impact plans for the development are uncertain. Roaring Fork Lodge LLC Manager Terry Claassen could not be reached Tuesday for comment.
The company is also facing foreclosure on a bank loan used to purchase the development site and related property.
However, the foreclosure proceeding and public trustee sale has been continued several times at the request of Alpine Bank. The matter was continued from the Dec. 9 Garfield County Public Trustees’ sale until today.
“They can keep continuing the sale for up to one year,” deputy public trustee Bob Slade said after last week’s continuation. “I don’t know the reasons behind it, but the bank notified us at the last minute and asked to withdraw the bid.”
The Roaring Fork Lodge first gained approval from the city in 2007. However, rising construction costs caused the developers to rework the plan.
Earlier this year, Magnolia Hotels, a Denver-based hotel development and management company that has high-end hotels in Denver, Dallas and Houston, contracted with the developer to oversee the design and construction of the project.
Soon afterward, Alpine Bank filed foreclosure papers against Roaring Fork Lodge LLC on nearly $3.3 million in loans for purchase of the lodge property, plus another property on nearby Hagar Lane which was to be used to fulfill the project’s affordable housing requirements.
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Colorado’s Western Slope is considered a climate hot spot where temperatures are increasing faster than the global average. This warming has contributed to more than 20 years of dryness, which scientists are calling a megadrought.