Snowmass Base Village’s next step
July 21, 2010
SNOWMASS VILLAGE – It could be a whole new ball game for Base Village now that the development has fallen into receivership.
Vested rights on the project – which the Snowmass Town Council approved in 2004 – are due to expire in 2014. That means the unbuilt portions could be completely rethought and re-envisioned. And that’s a concept that appeals to elected officials who have heard numerous comments about a perceived imbalance in commercial property compared to other spaces in the village proper.
“I think we need to sit down and talk to people in the community,” Mayor Bill Boineau said during this week’s Town Council meeting. His echoed similar comments from council members Reed Lewis and Markey Butler.
“I think there should be a community forum at which [court-appointed receiver] Lowe Enterprises is there,” Butler said.
She said she is especially interested in the future of Building 8 (formerly the Little Nell-Snowmass), now that assurances have been made about the pending completion of the interim arrival center (Building 7).
That’s certainly something the receiver would be willing to entertain, said Jim DeFrancia of Lowe Enterprises.
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“We are a great believer in a very open and transparent style. This is a public issue; we are happy to meet with the public,” said DeFrancia, a longtime Aspen resident.
He did emphasize several times during an interview that the most important aspect of his role is neutrality. “It’s important a receiver maintain an unbiased, neutral [stance].”
DeFrancia and his colleague Jim Pavisha, who once was involved as a receiver on the former Aspen Ritz-Carlton property, anticipate some busy months ahead.
“There will be lots of meetings with the staff of the town. We’ll also be meeting with the staff of Related WestPac. In terms of transitioning, we’ll be reorganizing a couple of the homeowners’ associations,” DeFrancia said.
On the Capitol Peak board, the developer had two seats; they’ll be replaced with people chosen by Lowe. Three seats will be filled on a commercial board and for the master association, Related WestPac’s six seats (out of a total of seven) will see new faces.
There will also be bills to pay.
“Hypo Bank remains the funding source. We do not anticipate any problems,” said DeFrancia.
Lowe Enterprises has already settled into a condo in Capitol Peak with the hopes of finding a more permanent situation from where to base operations. “But we very much want to be in the Base Village,” DeFrancia said.
The actual foreclosure of the project takes place between 90 and 120 days after the filing. “That’s a process that’s completely independent of the receiver,” DeFrancia said.
After that, bidders will have their day. Hypo Bank and its associated lenders say that Base Village, which is controlled by Related WestPac, owes $386 million in principal payments and interest, plus $48.5 million in other loan-related expenses. While under the control of then-President Pat Smith, Related WestPac paid Aspen Skiing Co. about $168 million for the project, land and approvals.
Did Related WestPac overspend to reach its current debt? DeFrancia believes not, listing development costs related to the building of the Viceroy, infrastructure, the completion of two condominium projects and partial work on two base-area commercial buildings.
“Related WestPac was not throwing money away on big staffs and fancy dinners,” he said.
But it’s not likely the bank will come close to recouping what was invested in the project, either.
“I don’t see a lot of people ready to write a check for $386 million right now,” DeFrancia said. “The big question mark is, what is it worth today and what would that value translate into in the future?”
And it’s for that reason that DeFrancia believes that odds are good that the project will end up back in the bank’s hands.
Then why go through the receivership process in the first place?
“Bankers in Germany and New York have better things to do than go to homeowner meetings,” DeFrancia said. “This is a big, complicated asset with lots of moving parts.”
Still, suitors, especially those who are looking for a bargain, are expected to come forward, though the bank may not like what’s offered.
Concurrent with the receiver’s actions, Town Council members this week said they want to resume discussions about what would be involved in creating an urban renewal district on this site.
DeFrancia said he’s had “some limited experience” with urban renewal, noting that “it’s hugely expensive” and that if the town wanted to take this route, “it would almost certainly have to partner with a development entity.”
Whatever entity comes forward will likely have to face the fact that the approvals, which are what truly give this project its value, will be invalid in about 48 months.
“It’s almost a given that the entitlements are on a slow road to expiring,” DeFrancia said. “Maybe it’s time to just revisit this plan.”
While the initial reaction to the foreclosure proceedings on the town’s primary development was met with shock and awe, there seems to now be a realization that at least Snowmass the resort can count on some change in the future.
“The gridlock is broken. There are greater prospects now,” said DeFrancia, voicing an opinion that seems to be shared by many town officials and staff.