Willits Town Center deal wasn’t a simple sale
BASALT – A Kansas investment company took control of the Willits Town Center project in Basalt Thursday by paying $9 million to buy a major portion of the project and acquiring an outstanding bank loan on a more lucrative part, public documents show.Willits Town Center LLC, a subsidiary of Mariner Wealth Advisors of Leawood, Kansas, bought a part of Willits Town Center that Bank of America foreclosed on last year. Most, if not all, of that property is undeveloped.In the 2010 foreclosure proceeding, Bank of America said the former owner, Joseph Freed & Associates (JFA), defaulted on a construction loan with $28.37 million in outstanding principal.Bank of America’s willingness to sell that portion of the project at a substantial loss, at a price of $9 million, reflects the drop in property values during the Great Recession.That transaction didn’t include the real prize at Willits Town Center – the site approved for a grocery store that is envisioned as the anchor tenant. Whole Foods Market had an agreement to construct a 25,000-square-foot supermarket on one of three blocks not included in the sale. JFA poured the foundation for the building and completed some of the infrastructure before running out of financing in September 2008.Technically, JFA still owns the former Whole Foods Market site and two other undeveloped blocks. However, the ownership, in this case, is essentially worthless. Bank of America started a separate foreclosure action last year on the three blocks, contending JFA defaulted on a loan with $7.54 million in outstanding principal. The foreclosure is pending.In addition, there are mechanics’ liens against the three blocks totaling nearly $8 million that must be paid when the property changes hands.Bank of America assigned the deed of trust for the Whole Foods site and the other two blocks to Mariner’s subsidiary on Thursday, according to a deed filed with the Eagle County Clerk and Recorder. In essence, Mariner is taking over the loan and gaining control of those three blocks. Mariner is acquiring a project with vast development potential. Basalt granted approvals for about 500,000 square feet of space for retail shops, restaurants and residences in Willits Town Center. So far, only two of 10 blocks have been developed in the project’s core.Mariner’s plans for the project remain uncertain. Company officials haven’t responded to requests for an interview yet. Mariner’s website said it is an independent investment advisory firm that, with its affiliate, manages about $8 billion in assets. Real estate is among its investments, but the firm doesn’t undertake development itself.Jim Polep, owner of Montecito Loft and Home, the oldest business in Willits Town Center, said he is optimistic about the area’s future.”To me, in my mind, it was a no-brainer – that somebody with money was going to buy it,” Polep said. “This is good news, not just for me but for everybody in the valley.”He said he is confident that construction will gear up again at some point and he is hopeful that Whole Foods Market will be resigned as a tenant. The grocer terminated its lease this spring because of the uncertainty of the project. Once an anchor tenant is operating, he is confident more shoppers will gravitate to Willits Town Center. Polep is regaining confidence in his decision 4 1/2 years ago to relocate from Aspen to Willits Town Center and to buy his email@example.com
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