Base Village Development at Snowmass Facing Foreclosure

Aspen, CO – The project to develop a new base village at Colorado’s Snowmass ski and snowboard resort will enter receivership on Monday as a result of court action on Friday. Meanwhile, foreclosure proceedings tied to the court decision are moving forward, spurred on by the actions of four lenders tied to the project.nDeveloper Related WestPac took over the base village redevelopment project from Intrawest and Aspen Skiing Co. in 2006. The four lenders, led by Hypo Real Estate Capital Corp. of Germany, claim that Related WestPac is in default and owes $386 million drawn down since March 2007 on loans totaling $520 million to finance the redevelopment the ski resort’s base village, plus $48 million in interest and expenses. The lenders on Thursday initiated foreclosure proceedings against the property in lawsuits filed in Colorado and New York, Related WestPac’s home state, seeking $194.7 million plus interest and expenses, according to the complaint. The foreclosure includes the new trendy Viceroy Snowmass Hotel that opened in December. Negotiations over the outstanding loan have reportedly continued over the past year without resolution.

Pitkin County (Colo.) District Court Judge Gail Nichols approved the receivership, in which a disputed entity is managed by an outside party until legal proceedings have resolved, only one day after filing by the Plaintiffs. It will be managed by James Pavisha of Denver, the executive of Destination Snowmass Services Inc., a subsidiary of Destination Hotels and Resorts, which runs six Snowmass lodges including the Top of the Village, Interlude, Stonebridge Inn, Laurelwood Studios and The Gant.

Originally envisioned in 2005 to include 1 million square feet of residential, hotel and commercial space, the stalled redevelopment project was scaled back to 400,000 square feet in 2008 after the real estate market dried up. Developers have completed between 300,000 and 400,000 square feet, and the rest is currently comprised of fenced-off, partially-completed projects for which construction stalled over a year ago.

Related WestPac faced foreclosure proceedings more than a year ago over several unrelated Snowmass-area properties it owned in whole or in part, including the Snowmass Inn, the Sonnenblick Townhomes, and the Snowmass Mountain Chalet, along with the Snowmass Center and several undeveloped lots. All were listed as collateral on a $110 million loan issued by Bank of America.

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