Snowmass Base Village faces foreclosure
July 9, 2010
ASPEN – The Base Village in Snowmass faces the threat of foreclosure after lenders filed court papers Thursday to take control of the property.
Hypo Real Estate Capital Corp. of New York, along with three other banks, alleges that Base Village Owner LLC, controlled by Related WestPac, has defaulted on loan notes and owes $386 million in principal payments and unpaid interest, and another $48.5 million for other loan-related expenses. The loans total $520 million, according to court documents.
Related officials declined comment.
Along with the foreclosure action, the lenders filed a complaint in Pitkin County District Court aiming to put the property into receivership, which would entail an outside, neutral party managing the financial aspects and operations of Base Village, including the Viceroy Hotel, which opened in November.
A hearing is set for Friday in Pitkin County District Court, where Judge Gail Nicholas will decide whether to appoint a receiver.
The lenders have requested that the court appoint James Pavisha as receiver. Pavisha is the executive of Destination Snowmass Services Inc., a Denver-based concern that was incorporated in November, according to the Colorado Secretary of State.
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It’s also a subsidiary of Destination Hotels and Resorts, which runs six Snowmass lodges, including the Top of the Village, Interlude, Stonebridge Inn and Laurelwood Studios, along with The Gant in Snowmass. Destination Hotels is a division of Los Angeles-based Lowe Enterprises Inc., which has an emphasis in real estate operations and development.
Combined, the two plan to oversee the Base Village throughout the court proceedings.
Aspen resident Jim DeFrancia, a spokesman for the receiver and Lowe, said he does not believe Related WestPac has the legal remedies to avoid receivership.
“According to the loan documents and the rights of the lender, it’s explicitly clear that [the lenders] have a right to the appointment of a receiver,” DeFrancia said.
DeFrancia said the receiver will work with the town of Snowmass and the Aspen Skiing Co. regarding Base Village.
In prepared statement, DeFrancia, through locally based Promo Communications, also said: “The lending group has been forced into the unfortunate action of foreclosing against Snowmass Base Village. The lending group has been engaged in negotiations with the borrower for more than a year. During that time, the lending group continued to fund the loan in order for the Viceroy Hotel to be completed and to operate, as well as for the asset to be fundamentally maintained. The borrower, however, has not fulfilled its obligations and is clearly in default.”
In another statement, Viceroy officials said the hotel will not be affected by the current litigation.
“We have been informed … that they want Viceroy Snowmass to continue operating as normal,” said Jeff David, the Viceroy’s general manager. “We are in the midst of the high summer season in Aspen/Snowmass, and business has been great. We have also been aggressively booking reservations for the 2010/11 season, and we are looking forward to our second winter season being even better than our first.”
The lenders’ two-pronged takeover of Base Village marks the latest setback for Related WestPac, which acquired the project from Intrawest and the Aspen Skiing Co. in 2006. Construction of the entire project – originally slated for 1 million square feet at the base of Fanny Hill – stalled in 2008 because the credit crunch and the inability to secure financing for construction.
Related also faces a $5.3 million lawsuit from the owners of the Silvertree Hotel, which sued in April claiming the LLC backed out of a deal to buy the slope-side 260-room hotel, as well as the Silvertree Conference Center and the 140-room Wildwood Lodge.
Snowmass Town Councilman Arnold Mordkin, who has sat on the board ever since voters approved the Base Village development in February 2005, said he’s not surprised by the foreclosure and receivership actions.
“It’s about time somebody did something,” he said. “How long was Hypo going to do nothing with their finger in their ears without getting paid? It’s one of those, when-is-the-next-shoe-going-to-drop kind of things.”