Willits Town Center in Basalt set for foreclosure sale
September 15, 2010
BASALT – A Chicago-based developer is making a last-minute effort to regain control of the Willits Town Center project in Basalt before a scheduled foreclosure sale by the public trustee of Eagle County Wednesday at 10 a.m.
Joseph Freed and Associates (JFA) said it is working with another lender to settle a debt with Bank of America.
“We have a capital investor who has now made offers to the banks and to the lien holders on the entire Willits Town Center project,” JFA said in a statement. “Acceptance of these offers will resolve all issues and allow the Whole Foods Market construction to restart immediately without any further unnecessary delays to this project.”
The deal hinges on Bank of America accepting JFA’s terms, which weren’t disclosed.
Bank of America foreclosed on the Willits Town Center project in April, alleging JFA’s Willits Town Center Partners LLC defaulted on a loan with $36 million remaining on the principal. A receiver was appointed to run the project until the ownership issues are resolved.
In anticipation of Wednesday’s foreclosure sale, Bank of America placed a minimum bid in at $10.55 million, according to the Eagle County public trustee’s office. That means if the project goes to sale, any bidder would have to go above that amount.
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Bank of America’s bid said principal, interest, appraisal fees, attorney fees and other assorted costs push the total owed to $38.24 million. The minimum bid of $10.55 million would leave Bank of America with a deficit of nearly $28 million if no bidder emerges and no prior deal is worked out with JFA.
A spokeswoman for the trustee’s office said Colorado law requires a lender to place a minimum bid equal to the amount of the loan or the current estimated value of the property, whichever is less. The minimum bid of $10.55 million indicates the value of Willits Town Center has plummeted during the recession, as has property nearly everywhere.
Willits Town Center has approvals from the town of Basalt for 281,000 square feet of approved but unbuilt commercial space and between 119 and 177 residential units. The approvals allow flexibility on the number of residences.
The crown jewel among the approvals is a space for a specialty grocer. JFA secured approvals for a 44,000-square-foot grocery store space and inked a lease with Whole Foods Markets, but the deal fell through when construction stalled in September 2008.
JFA signed a new lease with Whole Foods in March 2010 for a scaled-down store, raising hopes that the project was revived. Bank of America foreclosed the following month.
The receiver, Cordes and Co., along with JFA continued to work through the Basalt land-use process to secure amended approvals for a 25,000-square-foot space for the grocery store.
JFA has maintained since April it will “pursue all avenues” to reach an agreement with Bank of America and complete the project. Whole Foods has said throughout the ordeal that it has a design prepared and is ready to go.
Along with settling the dispute over the loan, JFA must settle with its contractor and subcontractors on the project. Construction companies and providers of materials have filed about $8 million in liens for bills that allegedly weren’t paid by JFA.
Aspen Earthmoving is one of the companies with a lien. President and CEO Rick Stevens said it is his understanding that JFA has negotiated with Clayco, the general contractor, rather than every individual lien holder.
Stevens welcomed the news that an agreement might be at hand between JFA and Bank of America.
“If it’s true, it’s going to be very healthy for the midvalley economy,” said Stevens, a former Basalt mayor. “We wouldn’t have to import a work force. People are dying to get back to work.”