What’s next for stalled Willits project? | AspenTimes.com

What’s next for stalled Willits project?

Scott CondonThe Aspen TimesAspen, CO Colorado
Janet Urquhart The Aspen Times

BASALT – The Kansas firm that acquired the Willits Town Center development in Basalt last week aims to resolve financial issues plaguing the project and resume construction soon.Ryan Anderson, co-president of Mariner Real Estate Management, said Thursday night the firm has started talks designed to get Whole Foods Market re-signed as the anchor tenant for the project. Whole Foods signed leases twice to locate at Willits Town Center, but both were terminated when the former owner couldn’t construct the grocery store building.Anderson said he couldn’t lay out a specific timetable for resuming construction yet because of the two major unresolved issues. “We’re excited about the project and hope to get going as soon as possible,” he said.Mariner needs to “resolve” nearly $8 million in mechanics’ liens filed by the contractor and subcontractors for work they performed on the Whole Foods building, he said. The construction firms contend they weren’t paid by former owner, Joseph Freed & Associates (JFA). They established a superior claim for their liens in a court case.Anderson said resolving the mechanics liens’ is Mariner’s “number one priority.”Construction stalled on the supermarket building in September 2008 when JFA ran out of financing. The foundation was poured and much of the infrastructure was completed, but the construction site has been abandoned for 2 1⁄2 years, a casualty of the Great Recession. Anderson said tests will be performed to make sure the foundation retained its structural integrity. It has been exposed to the elements for three winters.Mariner Real Estate Management is owned by Montage Investments, which is a subsidiary of Mariner Wealth Advisors of Leawood, Kan. The company buys distressed real estate when it is a solid investment, like the Basalt project, Anderson said. Willits Town Center has approvals for about 500,000 square feet of retail shops, restaurants, offices and residences. Only a fraction of that square footage has been built.Mariner acquired the vast majority of Willits Town Center on May 4 in a two-step process. It paid $9 million to acquire seven of 10 blocks from Bank of America. In a related move, Bank of America assigned a deed of trust to Mariner for the remaining three blocks, which include the Whole Foods site. That means Mariner is in control of those three blocks, as long as it addresses the liens.A statement released by Mariner indicates the company will build out Willits Town Center rather than sit on the property and sell when the real estate market improves.”Through our extensive research into the Willits development and the surrounding communities, we are confident that we will be able to complete this vibrant retail, residential and office center,” the statement said.”On the one hand, the project represents a solid investment opportunity for our shareholders,” the statement continued. “At the same time, it’s a real boon for the community. We are carrying forward the original goal of creating a sustainable, mixed-use community in the Roaring Fork Valley.”Anderson expanded on the press release by saying a number of factors make the project’s future look bright, including the Roaring Fork Valley’s prospects to rebuild its economy. “We like the valley’s long-term demographics,” he said.He also cited strong leadership at the town of Basalt and the fact that Willits Town Center was already started as other pluses. If Whole Foods is built, it is expected to draw shoppers from Aspen, 20 miles away.Mariner said it will begin marketing efforts to bring in retailers, other businesses and residents to the development.Whole Foods Market’s first lease at Willits Town Center, for a 44,000-square-foot space, was terminated by the grocer in June 2009 when JFA couldn’t deliver the shell of the building.Whole Foods signed a new lease in March 2010 for a store reduced to 25,000 square feet. That lease was terminated in March when the company became frustrated over the ongoing uncertainty over the ownership of the project. JFA defaulted on a loan and Bank of America foreclosed on seven of the 10 blocks at Willits Town Center and initiated foreclosure on the other three blocks.Whole Foods Market has a policy of not speaking about potential stores until a lease is signed. However, Will Paradise, Whole Foods president for the Rocky Mountain Region, has said repeatedly in the past that he thinks a store would perform well in the Roaring Fork Valley.scondon@aspentimes.com

Early and mid-2000s: Willits Town Center founder Michael Lipkin gets approvals from Basalt for 500,000 square feet of commercial and residential space at Willits Town Center.• Fall 2006: Chicago development firm Joseph Freed & Associates (JFA) buys into the project.• May 2007: Whole Foods Market signs a lease with JFA to open a 44,000-square-foot store. Construction is delayed while Lipkin and JFA seek to alter their approvals to expand Willits Town Center.• September 2008: Construction stalls when JFA’s financing dries up. The foundation and much of the infrastructure were all that were completed in what’s known as the Whole Foods building.• June 2009: The national grocery chain terminates its lease when JFA cannot deliver the shell of the building.• March 2010: Whole Foods signs a new lease with JFA for a store reduced to 25,000 square feet.• April 2010: Bank of America foreclosures on JFA and repossesses seven of 10 blocks of the project; a foreclosure proceeding is started on three other blocks, including the building where Whole Foods was locating. Those three blocks also have mechanics liens for nearly $8 million that must be paid.• March 2011: Whole Foods terminates its lease at Willits Town Center, citing uncertainty over development of the project.• May 2011: A subsidiary of Mariner Wealth Advisors of Kansas acquires the majority of Willits Town Center, including the Whole Foods building. The company announces it will restart construction “soon” and will attempt to re-sign Whole Foods Market as an anchor tenant.

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