SNOWMASS VILLAGE — A chapter in the ongoing saga of Base Village quietly ended on Jan. 28 when a local judge officially approved of the “winding up” of a court-appointed receivership.
The decision by Pitkin County District Court Judge Gail Nichols to accept a final report from the receiver marked the formal end to the foreclosure process for the ski-in, ski-out project at the base of Snowmass Ski Area.
The receiver's report detailed the work done by the receiver since July 2010, which included cash management, resolving disputes over contracts and claims, playing a role in litigation over the sale of condos in the Viceroy hotel, leasing and managing commercial space, and closing two expensive off-site sales centers.
“The court finds that all of the receiver's action were right and proper and in the best interest of the receivership estate,” Judge Nichols wrote in her order.
She also ordered that a $50,000 bond posted by the receiver be released.
The end of the receivership means that the entity that technically bought the project at a foreclosure sale last November — Snowmass BV HoldCo LLC — is now also in complete control of the project.
On the ground the change is slight, as the same organization that acted as the receiver, Lowe Enterprises Real Estate Services, has been retained by the new owners to keep managing the project.
“HoldCo,” as it is known, is a corporate entity controlled by Hypo Real Estate Capital Corp. and its banking parent, the German-based Hypo Real Estate Group.
In turn, “nonperforming assets” from both Hypo organizations, including Base Village, are under the control of FMS Wertmanagement, an agency of the Federal Republic of Germany known as Hypo's “bad bank.”
Hypo Real Estate Capital Corp., or HRECC, initiated foreclosure proceedings on Base Village in 2010 after The Related Companies of New York defaulted on a $520 million acquisition and construction loan for Base Village in 2009.
The foreclosure sale for Base Village was held on Nov. 16, 2011, after being postponed six times from the originally scheduled sale date of Nov. 17, 2010.
The lenders — Hypo and three other European banks — submitted a credit bid of $138 million to take control of the property. There were no other bidders.
(The other lenders include Dekabank Deutsche Girozentrale of Frankfurt, Germany; KBC Bank N.V., of Belgium; and Danske Bank AS, of Denmark.)
Lenders still spending
During the receivership, the lenders spent $12.3 million on Base Village, according to the receiver's final report. A good share of that was spent to operate the Viceroy hotel, which opened in November 2009.
When the receiver assumed control in July 2010, the condo-hotel was only renting 98 of its 173 rooms and was $3.6 million in the red.
But after a successful lawsuit brought by a group of condo owners in the Viceroy — who got their deposits back — all of the condos in the hotel were put into the short-term rental pool. That helped produce a 60 percent increase in revenue for the Viceroy, according to the receiver's final report.
As of Dec. 1, 2011, the Viceroy was on track to generate $11.5 million in revenue and log a net operating loss of $3 million in 2011, according to the receiver's report.
The receiver's report also said that commercial tenants in Base Village, as of Jan. 7, owed $680,200 in back rent. Of that, $560,400 was owed by current tenants and $119,800 was owed by the now closed Buchi Japanese Tavern and the Sweet Life restaurants.
During the receivership, Chaffin Light Real Estate sold five of 13 condos listed for sale in the Hayden and Capitol Peak lodges, which are in the core of the village below the Village Express lift, according to the receiver's report.
The 152 condos in the Viceroy hotel, which can be rented as 173 hotel rooms, are not currently on the market.
The man from Lowe
Executives from HRECC, based in New York, have hired Lowe Enterprises Real Estate Services Inc. as the asset manager for Base Village, and Michael Tande, a senior vice president with Lowe, has been appointed project manager to oversee day-to-day operations of the project.
Another entity controlled by Lowe Enterprises, Destination Snowmass Services, had been serving as the official receiver for the project.
Jim Pavisha, a Lowe executive at the head of Destination Snowmass Services, was officially the receiver, while Jim DeFrancia, also a Lowe executive, frequently served as the public face of the receiver.
DeFrancia is still involved with Base Village, as he is chair of two Base Village metro districts and the president of a management association called Base Village Company Inc., but Tande has taken over as the point person.
The makeup of the boards of the metro districts are not expected to change as a result of the receivership ending. In addition to managing the physical asset, Tande's job is to help sell the project for the lending group by providing information and tours to prospective buyers.
Still on the market
A real estate marketing firm, EastDil Secured, is still soliciting bids for the project, which was once expected to generate $1.2 billion worth of residential sales, primarily from ski-in, ski-out condos.
“There continues to be a high level of interest,” said Tande, who added he could not disclose the identity of any prospective buyers.
Jim Light, of Chaffin Light Real Estate, said he's talked recently with several prospective buyers about real estate values in Base Village.
“My impression is that there is one group that is very interested,” Light said.
Last fall, interested potential buyers included Aspen Skiing Co., East West Partners, Centurion Partners, and Real Capital Solutions of Louisville, Colo.
Executives at The Related Cos. were also thought to be interested in regaining control of the property they lost to foreclosure.
Tande said that HoldCo has no plans to submit any requests to the town of Snowmass Village for changes to the existing approvals for the project, which is about one-third complete.
Snowmass Village Town Manager Russ Forrest, in a Jan. 31 town manager's report to the Town Council, said about Base Village's new owners, “They are continuing a bidding process with a number of potential developers.”
Litigation between Hypo and Related continues in a New York court as the banks pursue money from Related over its default on its $520 million loan, and Related seeks damages from the banks for an alleged failure to lend.
On Feb. 10, Hypo also filed a lawsuit against Base Village Owner LLC in Pitkin County District Court seeking $368 million. Hypo claims that is the amount owed to it by BVO after the foreclosure sales in late 2011.
Editor's note: A version of this story was also published by the Snowmass Sun on Wednesday, Feb. 15, 2012.