Aspen Journalism

The Base Village project in Snowmass Village is now officially out of receivership and owned by a consortium of four European banks. Photo: Brent Gardner-Smith

Brent Gardner-Smith, Aspen Journalism
Wednesday, Feb. 15, 2012

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 the 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.

With the end of the receivership, it 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.

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Part of the streamflow management infrastructure at the city’s existing hydropower plant on Maroon Creek. Groups in the community are calling for stream gauges to be installed below the city’s infrastructure on both Maroon and Castle Creeks. Photo: Brent Gardner-Smith

Brent Gardner Smith, Aspen Journalism
Monday, Feb. 13, 2012

Two groups critical of the city of Aspen’s proposed hydropower plant along the banks of Castle Creek are now raising funds to install stream gauges on that stream, as well as Maroon Creek.

A stream gauge suitable for inclusion in the U.S. Geological Survey (USGS) system cost between $20,000 and $35,000 to install, depending on the site, and $16,000 a year to operate.

Saving Our Streams, a recently formed nonprofit that is challenging the city’s proposed hydro plant, wants at least one gauge on both Castle and Maroon creeks in order to keep an eye on how much water is left in the streams below the city’s diversion dams.

Maureen Hirsch of Saving of Streams has contacted federal officials with the USGS, who have agreed to make a site visit this winter to the Aspen area.

“If somebody is interested in a new stream gauge, we are certainly open to talking to them,” said David Brown, the director of western Colorado operations for USGS, who is based in Grand Junction.

Friends of Rivers and Renewables (FORR), a new initiative from the Aspen-based Public Counsel of the Rockies, also wants gauges on those two streams.

The group also is calling for new gauges on the Roaring Fork River in Aspen, on Hunter Creek and on the lower Crystal River.

“It’s time to get the Roaring Fork River basin properly gauged,” said Tim McFlynn of Public Counsel for the Rockies. “It’s shockingly overdue.”

But the expense of doing so can be shocking as well.

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Public information from the Federal Election Commission shows that in 2011, Aspenites made 99 donations to Rep. Scott Tipton (R-Cortez), totaling $50,322. In the same year, they made 79 donations totaling $20,585 to Sal Pace, Tipton’s Democratic challenger.

Between September 1 and Dec. 31, 2011, Tipton had 14 donations from Aspenites totaling $8,375, while Pace had 69 donations from Aspenites worth $18,855.

Information such as this can be gleaned from the searchable database above.

Aspen Journalism and the Rocky Mountain Investigative News Network worked together to compile the 2011 campaign contributions made to Colorado’s congressional candidates from donors who call the Roaring Fork River valley home.

The resulting table is sorted alphabetically by congressional candidate. but it can be changed to display contributions to individual candidates by amount or by the communities in the Roaring Fork River valley, including Aspen and Glenwood Springs.

Below is a list of notable local donors to both Tipton and Pace in 2011.

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The Base Village metro districts are struggling, given that many condos that were supposed to generate property taxes have not been completed. Now a legal battle is ongoing over money tied to bonds that were issued by the metro districts to finance construction of infrastructure in the village. Photo: Brent Gardner-Smith

Brent Gardner-Smith, Aspen Journalism
Wednesday, Feb. 1, 2012

SNOWMASS VILLAGE — Attorneys for The Related Cos. have responded to charges in a lawsuit by its European lenders that it fraudulently moved $32.5 million tied to bonds issued by the Base Village metro districts from one corporate entity to another.

An attorney for Related, Mark Walfish, of Katskey Korins LLP, filed an answer on Jan. 18 to a Dec. 28 lawsuit filed by the banks over the $32.5 million, which was loaned to Related by the banks to use as collateral against bonds issued by two Base Village metro districts that effectively function as one district.

One of the banks is Hypo Real Estate Credit Corp., a subsidiary of Hypo Real Estate Group, a German bank that was nationalized by the German government after the 2008 financial crash.

“Hypo had full knowledge of, was a willing participant in, and in fact authorized in writing the very transactions about which it now complains,” Walfish wrote in his response to the court.

Hypo and other European banks had lent $520 million to entities controlled by Related, which was used to buy and develop Base Village in Snowmass Village.

Related defaulted on the Base Village loan in April 2009, leaving Hypo and three other banks to foreclose and assume ownership of the unfinished project, which they did last year.

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A streamlined process? Maroon Creek in late summer, with about 14 cfs of water flowing through it, just below the city’s diversion dam. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Monday, January 23, 2011

The city of Aspen’s request to the feds to use an expedited review process for its Castle Creek hydroelectric project has run into stiff opposition based on comments submitted to the agency that’s reviewing it.

Scott Fitzwilliams, the supervisor for the White River National Forest, sent a letter to the Federal Energy Regulatory Commission (FERC) on January 10 in response to the city’s request to use a “traditional licensing process” instead of an “integrated licensing process,” or ILP.

The Forest Service recommended that a more lengthy review process be employed for the Castle Creek hydroelectric project because it allows FERC staff to be involved from the beginning and a process similar to full-blown NEPA (National Environmental Policy Act) review will occur. There also is more opportunity for back-and-forth discussions regarding study designs, dispute resolution and public participation, Fitzwilliams wrote.

For Matt Rice, the director of conservation at the Colorado chapter of the nonprofit organization American Rivers, the letter from the Forest Service to FERC is a big deal. American Rivers opposes the city’s request for an expedited process and is questioning the project’s environmental impacts.

“It’s huge,” Rice said. “We have not had very much success requesting an alternate licensing process without a request from a federal agency as well.”

City officials in December filed a pre-application document and a request to use the “traditional licensing process,” or TLP, with the federal agency.

FERC, based in Washington, D.C., issues licenses for hydro projects.

The city told FERC officials that going the TLP route would save time, money and prevent unnecessary duplication of effort when reviewing the proposed Aspen hydro project, which would use water diverted from Castle and Maroon creeks to spin a turbine to make electricity.

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It’s still all about the view, including this view of Mount Daly from the McLain Flats area, where a buyer paid $16 million for a home in 2011. Photo: Brent Gardner-Smith

By Catherine Lutz, Aspen Business Journal
and Brent Gardner-Smith, Aspen Journalism
Monday, January 23, 2012

ASPEN – For many watching Aspen-area real estate, 2011 will be remembered for its large volume of high-end home sales.

Twenty-two residential properties in the upper Roaring Fork Valley changed hands for $10 million or more last year — equivalent to nearly two each month.

Those sales added up to more than $325 million, roughly one-quarter of Pitkin County’s $1.27 billion worth of property transfers — on less than 3 percent of the number of transactions.

Clearly, the buyers of these luxury properties have not been too badly hurt by the Great Recession — yet they are price savvy, as many of the estates changed hands for significant discounts.

Many of the properties had also been for sale for quite some time. Still, the new owners generally paid a higher price per square foot than other segments of the market.

The buyers vary. They are self-made businessmen, heirs to ongoing concerns or international billionaires. Some have strong ties to Aspen and already own property here, while others are new to the scene.

But what binds them all — a big league sports team owner, a major grocery store chain CEO, and an investor in Vail among them — is that they chose Aspen as a place to invest in both property and lifestyle.

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This is the road that winds through a parcel of BLM land that splits Bill Koch’s Bear Ranch east of Paonia Reservoir. He would like to trade the BLM land for other federal land in Colorado and Utah. Peaks on public land in the Raggeds Wilderness are visible in the background. Photo: Brent Gardner-Smith

By Madeleine Osberger, for Aspen Journalism
Monday, Jan. 16, 2011

PAONIA, Colo. — Billionaire Bill Koch, who has made his presence felt in Aspen by suing the city over hydropower water rights and proposing a million-dollar guardrail on Castle Creek Road, has also attracted the attention of residents over McClure Pass.

Koch, who is building a Western-style compound on his 4,500-acre Bear Ranch east of Paonia Reservoir and below Ragged Mountain, is proposing a federal land swap that would grant him control of a three-mile strip of BLM land separating his ranch.

In exchange, he would give the government private land he controls overlooking Blue Mesa Reservoir in Gunnison County and an in-holding he has under option in Dinosaur National Monument, along with other inducements to win local public support.

On Wednesday at a Paonia Town Council meeting, so many people showed up to comment on Koch’s proposed land swap that the meeting had to be moved from town hall to a theater across the street, where the crowd still filled the main floor, balcony and aisles.

The assembled crowd of ranchers, teachers, retirees, mine workers and other locals were intent upon speaking their piece about the proposed land exchange, as were representatives of Bear Ranch.

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The heart of the Base Village metro districts, where condo owners now have a bigger debt burden. Photo: Brent Gardner-Smith

By Brent Gardner-Smith, Aspen Journalism
Sunday, Jan. 15, 2012

SNOWMASS VILLAGE — Interest rates on $32.6 million in bonds two Base Village metro districts issued in July 2008 have shot up to 10 percent from 1 percent as a result of actions taken recently by the Related Cos., the former owner and developer of the project at the base of the Snowmass Ski Area.

James DeFrancia, an executive at Destination Snowmass Services, which was appointed as receiver for the financially struggling project, said the increase in the bond interest rates could force Base Village property owners in 10 years to pay off about $65 million in debt, not $32.6 million.

“They are causing the metro district and owners considerable harm,” DeFrancia said of Related. “I don’t think it is very ethical business behavior.”

DeFrancia, who is also president of Lowe Enterprises Community Development, claimed that by forcing the bonds to be called last month under a tight deadline, Related was acting out of spite, likely as part of an ongoing legal and financial battle between Related and a consortium of European banks that now own the stalled project, where 611 residential units once were envisioned.

“There was no reason to do this,” DeFrancia said. “The Related people were shamefully uncooperative. They are obviously doing this to be obstructionist and intransigent.”

Dwayne Romero, president of Related WestPac, views the situation differently.

“Related WestPac is merely exercising its rights under the bond documents, which were negotiated back in 2008,” he said in a prepared statement.

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A snowmaking gun on Little Nell on Aspen Mtn. earlier this winter. The National Ski Areas Association claims a new Forest Service rule could hinder ski areas’ ability to make snow by illegally taking water. Photo: Brent Gardner-Smith

Here is a copy of the lawsuit, NSAA v. USFS, filed in the Tenth Circuit in Denver on Jan. 9, 2012 by the National Ski Areas Association against the U.S. Forest Service over water rights tied to ski areas.

NSAA also named the U.S. Dept. of Agriculture, the parent organization of the Forest Service in the suit, as well as Harris Sherman, a former Denver lawyer who is now the Under Sec. for Natural Resources and Environment at the Dept. of Agriculture.

Here is a copy of the exhibits that were filed in the suit.

The USFS and other defendants have yet to file an answer to the suit.

Here is a position paper from NSAA on the lawsuit.

Here is testimony from an attorney for NSAA at a Congressional hearing on the issue on Nov. 15, 2011.

Here is a letter on the new regulations from Rep. Scott Tipton (R) of Colorado to Tom Tidwell, chief of the U.S. Forest Service.

Here is some recent news coverage of the lawsuit:

Denver Post – National ski group sues Forest Service to keep water rights

The Colorado Independent: National ski areas association sues U.S. Forest Service.

Vail Daily: Ski industry suing Forest Service over water

KDNK: Ski area battle Forest Service for water rights

Here’s the NSAA lawsuit embedded in a Document Cloud reader (which has a zoom function):

The city’s diversion dam on Castle Creek, which is about 2.5 miles above the proposed hydro power plant. Photo: Brent Gardner-Smith

By Brent Gardner Smith, Aspen Journalism
Wednesday, January 4, 2012

ASPEN – The nine people behind a lawsuit against City Hall challenging its proposed hydro plant all own multimillion-dollar Aspen-area properties and some hold consumptive water rights on Castle and Maroon creeks.

The city of Aspen, through its Denver-based water attorney, filed a motion in to dismiss the lawsuit this past fall based on the notion that the plaintiffs don’t have standing to challenge the city’s water rights.

The plaintiffs recently submitted information to the court either detailing their water rights or giving other reasons why they should be allowed to sue the city over its water rights.

In the mix of property owners are two billionaires and two Aspen locals with a history of successfully taking on local governments.

The property owners sued the city in September 2011 in state water court (case number 2011CW130) in an effort to strip the city of its right to use water from the creeks for a new hydropower plant.

The city responded three weeks later by telling Judge James Boyd that the property owners don’t have the right to make their claims.

“The complaint does not identify which plaintiffs own water rights, what water rights they may own, or how those are or may be affected with respect to the alleged abandonment of the hydropower component of the subject water rights,” Cindy Covell, the city’s water attorney, told the court in a motion to dismiss the case.

The plaintiffs responded Oct. 24 with a 16-page brief and 139 pages of exhibits documenting their water rights and other interests.

The plaintiffs’ initial claim was that since the city has not used its hydropower water rights on the two creeks since 1961, it no longer has the right to divert 25 cubic-feet-per-second of water from Castle Creek and 27 cfs from Maroon Creek for hydropower use.

One of the most recognizable names in the lawsuit is that of Bill Koch, a billionaire who now owns one of the most scenic homesites in the Aspen area in the upper Castle Creek Valley.

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