Skico not alone in Base Village bid
October 13, 2011
ASPEN – Centurion Partners, the developers of the Residences at The Little Nell in Aspen, has submitted a bid to buy the Base Village project.John Sarpa, the regional president in Centurion’s Aspen office, confirmed this week that the firm had submitted a bid, but said due to a confidentiality agreement he could not elaborate.A company called Eastdil Secured was recently hired to market the outstanding $400 million senior mortgage note on Base Village left behind in 2009 by Related Cos. That note now is held by an agency of the German government.The offering was structured so that the asset itself would be transferred to the winning bidder before a pending foreclosure sale on Nov. 16.Eastdil Secured required a confidentiality agreement of the companies interested in taking a close look at the opportunity.Last week, Aspen Skiing Co. spokesman Jeff Hanle confirmed that Skico, or at least its owners, the Crown family of Chicago, had submitted a bid for an undisclosed amount on Base Village.The Crowns purchased the 20-acre Base Village site in 2003 for $11 million. After gaining land-use approvals and beginning construction with its partner Intrawest, they sold the project in March 2007 for $169 million to Related Cos. and California developer Pat Smith.The unfinished project is located at the bottom of Skico’s largest mountain, Snowmass Ski Area.Centurion Partners is based in Newport Beach, Calif., and, according to its website, its business focus has shifted since the recession started.In late 2010, Centurion began partnering with other real estate investors to buy “distressed hospitality assets” with an emphasis on projects in “iconic venues,” according to Sarpa and its website.The company also stresses its strong ties to Goldman Sachs as an investment partner. Goldman was an investor in the Residences at Little Nell project.Centurion had once proposed to build the Lodge at Aspen Mountain on South Aspen Street, but the Aspen City Council voted down the project in late 2007.With foreclosure on the proposed hotel site looming, a Boston-based company, Alcion Ventures, bought the building site in July 2010 with Golub & Co. of Chicago. The sale was characterized at the time as being in collaboration with Centurion Partners.Neither Alcion or Golub & Co. is involved with Centurion Partners on its Base Village bid, and Centurion has no local land-use applications currently in the process, according to company officials. The Base Village project ran into serious trouble in April 2009 when Related Cos. of New York defaulted on a $520 million acquisition and construction loan from Hypo Real Estate Credit Corp.Hypo Real Estate Credit Corp. is a subsidiary of Hypo Real Estate Group, which was badly exposed to the real estate crash and was nationalized by the Federal Republic of Germany shortly after the fall of Lehman Brothers in September 2008.There has apparently been no word back to bidders from FMS Wertmanagement, the German agency set up to dispose of the Base Village asset for the benefit of the German taxpayers, or from Eastdil Secured.Three other companies are also thought by those close to the project to have submitted a bid, East West Partners of Vail, Real Capital Solutions of Louisville, Colo., and Related Cos.Executives at East West Partners and Real Capital Solutions said Tuesday they could not confirm that their companies had submitted bids, but it was clear they were aware of the bidding opportunity and familiar with the complexities of the Base Village project.Marcel Arsenault, the chairman, CEO and founder of Real Capital Solutions, said Tuesday he could not comment on whether his firm had submitted a bid because of a signed confidentiality agreement.But he did say “this kind of project is our cup of tea.”Real Capital Solutions, located near Denver, has bought 26 failed condo and development deals in the last three years, Arsenault said.Their deals include a 49-unit condo project in Beaver Creek now called ASCENT, where condos have been put on the market at about half of their previous asking prices.”We know the project quite well,” Arsenault said of Base Village. “It is very typical of the kinds of things we do. And it is very consistent with our expertise.”Speaking for East West Partners, Chuck Madison also cited a confidentiality agreement as a reason he could not confirm whether or not the company had submitted a bid.East West Partners was once one of three firms the Crown family was considering as a development partner in Base Village, along with Hines and Intrawest.Intrawest got the nod for the project and designed the layout of the village and its buildings, which included about 600 condos spread over a million square feet of building.East West Partners has developed ski area real estate in Vail, Beaver Creek, Summit County and Lake Tahoe. One of its signature projects is the Park Hyatt Beaver Creek, a hotel at the bottom of the Beaver Creek ski area.Skico officials frequently cite Beaver Creek as being a key competitor for Snowmass visitors. In addition to East West Partners and Real Capital Solutions, Related Cos. is also thought by many close to the project to have submitted a bid for Base Village.Related has been sued by Hypo Real Estate Capital Corp. for about $300 million in loan guarantees that its executives signed on the Base Village loan.That alone is cited by many as one reason to believe Related has submitted a bid to buy back its old project.Executives at Related, a large private real estate investment company, have consistently declined to comment on the Base Village project, which they once projected would generate $193 million in profits for the company, its partners and its investors.Editor’s note: Aspen Journalism is a nonprofit news organization working in the local public interest.