Bank starts foreclosure on Aspen Club as liens top $25 million
The primary lender on Aspen Club’s redevelopment project has taken steps to foreclose on the property.
Last week’s action by FirstBank, which says Aspen Club owes it $30 million on a $45 million loan it took out in May 2016, marked the latest financial hurdle for the project that saw most of its construction activity come to a halt at the end of August when its financing dried up.
Andy Hancock, the regional president of FirstBank, declined Tuesday to answer specific questions related to the foreclosure proceeding.
“I can just confirm that we did file the foreclosure and we’re hopeful the (Aspen Club) development team can come up with a resolution prior to our March 7 sale date,” he said.
That March auction date would be the earliest a foreclosure sale would occur, said Syd Tofany, chief deputy public trustee for the county. Aspen Club has until Feb. 20 to file a notice of intent to cure the debt, she said.
Aspen Club president Michael Fox remained optimistic the project, which originally had been touted to finish this month, will get back on track.
“We’re highly confident that this will get built,” he said. “We know a lot of what’s going on in the background, and it’s all really positive. We hope to have a pretty exciting announcement in the next couple of weeks.”
Fox called FirstBank’s action “standard operating procedure” given the current circumstances.
“We’re currently working with multiple parties,” he said. “And I know the bank is in negotiations with another group.”
FirstBank launched foreclosure efforts late last week by filing documents with the public trustee of Pitkin County. The trustee subsequently filed a notice of election and demand, which is the official document that signals a foreclosure action. That notice was made public Tuesday by the Pitkin County Clerk & Recorder’s Office.
More than $25 million in liens, filed by subcontractors who have worked on the project, have mounted against Aspen Club. Some of those liens also have been filed on PCL Construction Services, which is the general contractor. PCL also has hit Aspen Club with a $17.7 million lien.
FirstBank’s law firm in the foreclosure action — the Denver branch of Phoenix-based Lewis Roca Rothgerber Christie LLP — noted in a Nov. 2-dated filing with the public trustee the driving reasons behind the foreclosure.
Aspen Club’s violations of contractual agreements with FirstBank include allowing more than $15 million in liens to pile up, making at least 10 change-orders with the contractor for the first phase of the redevelopment without the lender’s approval, and amending the construction contract with the contractor without notifying or receiving approval from First Bank.
Aspen Club also “substantially changed” the scope of the project without FirstBank’s approval and changed the budget of the first phase without notifying the lender, according to the notice of election and demand.
Located at 1450 Ute Ave. on the east side of Aspen, the project calls for a remodeled 40,000-square-foot Aspen Club & Spa building. Also included is a 54,000-square-foot lodge with 20 timeshares, which comprises 36,000 square feet of townhouse units and 18,000 square feet of club units. Another 13,600 square feet of development would account for 12 multi-family affordable-housing units.
Fox said he has no intentions to scale back or revise the development in the wake of the foreclosure action and liens.
“That is not being considered,” he said.
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