Tough times for Aspen developers
October 22, 2009
ASPEN – The pending foreclosure of a real estate and golf community by a company controlled by Jim Chaffin and Jim Light, two of the developers behind a membership lodge at the base of Aspen Mountain, has no effect on the financing of the local project, one of the partners said Thursday.
Chaffin’s Balsam Mountain, a high-end golf community in North Carolina, faces foreclosure proceedings because the development company has defaulted on two loans with its lender, TriLyn LLC, of Greenwich, Conn., according to Chaffin. The lenders listed in court documents are two corporations under the umbrella of TriLyn LLC.
“Ironically, we got caught in this tsunami,” Chaffin said of the recession and the resulting tightening of the credit market.
Balsam Mountain secured two loans in 2005 for $9.8 million and $10 million with the boutique bank. At the end of last year, the company defaulted on those loans when they came due. Chaffin and Light have been working with the lender since then.
“We have a difference of opinion with the lender but we’re confident this will get resolved,” Chaffin said, adding that Balsam Mountain is current on making interest payments attached to the loans.
Chaffin said although Balsam Mountain has been a market leader in sales – it has sold 230 of its 350 home sites on the 4,400-acre preserve – the bank wants an accelerated pay-down schedule.
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“The lender has needs of its own and they’ve created a sense of urgency,” he said.
Chaffin said Balsam Mountain had no debt until recently. A loan had to be taken out when the development’s amenities came on line all at once.
“We made a huge capital investment at a time when sales slowed down,” he said.
Bob Daniel, who represents Chaffin, Light, and their third development partner, David Wilhelm, for the Lift One Lodge – a 114,000-square-foot membership property proposed on the eastern side of South Aspen Street – said the North Carolina project is controlled and funded by a separate entity.
“There is absolutely no inter-connection and there is no cross collateralization,” he said. “All of the [Lift One] partners are funding the required amounts, and have the ability to continue funding the Lift One Lodge.”
Chaffin said Lift One Lodge is backed by a financial institution, as well as private equity from Chaffin Light Associates and the Wilhelm family. He said he has no reason to believe that any of the Lift One funding is in jeopardy.
Chaffin and Light have been working together since 1969, and became business partners in 1978 when they first began to develop Snowmass Village. They’ve since done eco-friendly golf course and real estate developments in the Southeast and in the Roaring Fork Valley, including the Roaring Fork Club in Basalt.
“I’ve been at this for 41 years and the last 14 or 15 months have easily been the most challenging,” Chaffin said. “It’s the toughest global economy ever.”
Across the street from the Lift One Lodge site is the proposed Lodge at Aspen Mountain, which is being represented by local developer John Sarpa.
The development company that controls the project, Aspen Land Fund II, filed for Chapter 11 Bankruptcy last month. When the note came due in September, Sarpa and his partners learned that Alpine Bank had entered into a contract with an unknown third party to sell its loan on the project even though Aspen Land Fund II had been in negotiations to extend the terms of the note.
As a result, Aspen Land Fund II was forced to file for bankruptcy protection in an attempt to prevent the loan from being acquired.
Partners within the development company are currently renegotiating their $22 million loan with Alpine Bank for the property it owns on South Aspen Street.