A rendering of the proposed Base 2 lodge on Main and Monarch streets in Aspen.
A rendering of the proposed Base 2 lodge on Main and Monarch streets in Aspen. Credit: Source: Base 2

ASPEN – Whoever is funding Mark Hunt’s acquisition of over $100 million in commercial real estate in downtown Aspen, including the proposed Base 2 lodge site, it’s not the Crown family of Chicago, according to both the Crowns and Hunt.

The Crowns, however, did invest with Hunt in at least three commercial real estate projects in Chicago’s Gold Coast neighborhood, two of which were caught in the 2008-09 real estate crash.

“Prior to July, 2010, Crown family members were invested with Mark Hunt in several Chicago properties,” said a statement released Monday by Aspen Skiing Co., which the Crowns own.

“Since that date, there has been no business relationship with Mr. Hunt whatsoever,” the statement said. “Neither the Crown family nor the Aspen Skiing Co. has any economic interest in the Base 2 project, or any other Hunt investments, in Aspen or elsewhere.”

The proposed 37-room Base 2 lodge would be across Monarch Street from Carl’s Pharmacy, where the Conoco station is today. An LLC controlled by Hunt bought the gas station at 232 E. Main St. in June 2014 for $6 million. The lodge project was approved by city council in June and it is now before city voters.

On Wednesday, Hunt was asked if he thought SkiCo is supporting the Base 2 project because the Crown family once invested in his properties in Chicago.

“No, absolutely not,” Hunt said.

David Perry, the chief operating officer of SkiCo, publicly supported Hunt’s Base 2 lodge in a Sept. 28 letter to the Aspen Daily News.

At the time, according to SkiCo’s public relations director Jeff Hanle, Perry “had no information” on the Crown’s investment history with Hunt.

“Aspen Skiing Company has publicly supported the need for more hot beds and a variety of lodging options in town for a number of years,” Hanle said in an email. “Our support for Base 2 is in line with what we have been advocating for a number of years and comes after our review of the project based solely on its merits.”

The former Cedar Hotel property on N. State Street.
The former Cedar Hotel property on N. State Street. Credit: Source: Google

The Chicago investments

Hunt said this week that the Crowns were investors in his proposed redevelopment of the Esquire Theatre building, at 58-104 E. Oak St., and of the Cedar Hotel building, at 1112-1118 N. State St.

Both buildings are close to the popular Oak Street Beach on Lake Michigan in a revitalized neighborhood a few blocks from Michigan Avenue’s “Magnificent Mile” shopping district.

Hunt purchased the historic Esquire Theatre building in 2002 for $13.2 million, according to rebusinessonline.com. The theatre itself closed in 2006 and Hunt was working to secure approvals to tear down the building and build a boutique hotel and retail spaces.

Hunt also bought the worn-down Cedar Hotel property in 2007 and gained approvals from the Chicago city council to build a Mondrian hotel there with over 200 rooms, according to Chicago Real Estate Daily, a division of Crain’s Chicago Business.

Then the real estate crash came in 2008 and Hunt’s lender, the soon-to-be-closed Anglo Irish Bank Corporation, filed foreclosure suits on his loans in August 2009.

The bank was seeking $33.2 million for the loan against the Esquire Theatre property and $18.7 million for the loan on the Cedar Hotel property.

The Crown’s specific investment position in the two properties has not been made public.

A view of the Esquire Theatre property on E. Oak Street in Chicago.
A view of the Esquire Theatre property on E. Oak Street in Chicago. Credit: Source: Google

Didn’t go well

After the foreclosure suit, successful Chicago trader Don Wilson, Jr. of DRW Trading Group, who Hunt has described as a friend and a neighbor, bought the Esquire Theatre building in July 2010, according to the Chicago Tribune.

Wilson then bought the Cedar Hotel building in early 2011, according to Crain’s Chicago Business. After Wilson stepped in, the Anglo Irish foreclosure suit was dismissed.

Wilson did not return a request for comment.

Hunt said that the investments in the Esquire and Cedar Hotel buildings did not go well for the Crowns.

“No, I don’t think it went well for anyone in real estate in those years, I mean, those were some scary years,” Hunt said. “Tell me a real estate development that ended well 2008 through 2010.”

Wilson, however, appears to have done well by buying the Esquire Theatre building in the depths of the recession. In 2011, he began redeveloping the building into a luxury retail complex and then sold it in February 2015 for $176 million, according to the Tribune.

Wilson also bought the outstanding loan for Aspen’s iconic Hotel Jerome in 2010 for $29 million from the wreckage of Lehmann Brothers, according to a lawsuit filed in Pitkin County by Fred Latsko, a former development partner of both Hunt’s and Wilson’s who was involved in the Jerome deal.

Wilson, after renovating the Jerome, sold it for $69.15 million in February of this year, along with the neighboring Aspen Times building for another $3.35 million.

Hunt said Wednesday that while he helped bring the potential Hotel Jerome deal to Wilson’s attention, he did not have a financial position in the project.

The building on corner of Division and State streets in Chicago.
The building on corner of Division and State streets in Chicago. Credit: Source: Google

Division and State

Another Chicago building the Crowns invested in with Hunt is a relatively modest two-story commercial building at the corner of Division and State streets. The building, which houses a Bank of America branch at 1163-67 N. State St, is in a tony neighborhood just north of downtown Chicago.

Back in 1999, one of Hunt’s frequent development partners, John Terzakis, bought 51 percent of the Division and State building.

David R. Markin, the former chairman of Checker Motor Corp., which made the iconic Checker cabs, owned the other 49 percent of the building.

In January 2007, Markin filed suit in U.S. District Court in Chicago against Chebemma, Inc., of which Hunt was president, over payments owed to him from the sale of his interest in the building to Chebemma,

In June 2007 an entity called Division State LLC paid $4.9 million to Chebemma for an interest in the Division and State building, according to Markin’s lawsuit.

In August 2009 Markin amended his ongoing lawsuit to include Hunt, Terzakis and Division State LLC.

He accused Terzakis and Hunt of conspiring together to fool him into selling his interest to Chebemma under false pretenses, and at a lower price than he otherwise would have.

And Markin claimed Division State LLC, by buying into the building in 2007, had “accepted the fruits” of Hunt’s and Terzakis’ “wrongful conduct.”

One member of Division State LLC was a similarly named entity controlled by Hunt, M Division State LLC.

The other members of Division State LLC were the Crown Investment Fund, a Crown family investment vehicle, and three Crown family investment advisors, James A. Star, Dan Drexler and Aaron Rappaport.

Star is the son-in-law of Crown family patriarch Lester Crown, and the brother-in-law of Jim Crown, the managing director of SkiCo.

The lawsuit over the property at Division and State was settled in October 2010 without a trial or a final judgment. Hunt deniedthe substantive allegations in the suit.

And the Crown family, in the statement released this week by SkiCo, said they were simply “passive investors” in the building and were not a party to the lawsuit.

Hunt said on Wednesday that he no longer had a financial interest in the Division and State building.

Meanwhile, Terzakis, Hunt’s former development partner, was convicted in 2012 for running a Ponzi scheme in a completely separate business venture that helped sellers of real estate avoid capital gains taxes under Section 1031 of the IRS code. He was sentenced to seven years and ordered to pay back $25 million.

Aspen, Colorado
Aspen, Colorado Credit: Brent Gardner-Smith/Aspen Journalism / Aspen Journalism

Bankers, investors, friends and family

Mark Hunt's Aspen property acquisitions:
Building by common nameAddressDatePurchase price
Bodega*305/307 S. Mill St.April 2010$5.1 million
Gap*204 S. Galena St.October 2012$13.25 million
Bidwell*434 E. Cooper Ave.December 2012$22 million
Johnny McGuires730 E. Cooper Ave.April 2013$445,800
Crystal Palace*300/312 E. Hyman Ave.September 2013$12.5 million
Paragon commercial*419 E. Hyman Ave., # 2 & 6January 2014$5 million
Aspen Brewery304 E. Hopkins Ave.May 2014$4.25 million
Conoco station*232 E. Main S.June 2014$6 million
Daily News*517 E. Hopkins Ave.June 2014$10 million
Crazy Shirt*413 E. Hyman Ave.May/June 2014$3.4 million
Magasin*411 E. Hyman Ave.July 2014$2.52 million
New York Pizza409 E. Hyman Ave.July 2014$4.75 million (sold in Sept. 2014 for $5 million)
Red Onion$420 E. Cooper Ave.October 2015$18 million
* One of nine properties in $83.45 million loan from Jefferies LoanCore LLC
Properties under contract:
Bootsy Bellows308 E. Hopkins Ave.
Casa Tua/Guido's403 S. Galena St.
Pismo447 E. Cooper Ave.

If the Crown family of Chicago is not funding Hunt’s acquisition of $100 million worth of Aspen real estate, who is putting up the estimated $20 million in “credit support,” or cash, that local real estate experts say Hunt’s probably needed?

It remains a good question.

On Oct. 12, during a live broadcast of a debate about the Base 2 project, Aspen Public Radio News Director Carolyn Sackariason asked Hunt directly who was funding his property acquisitions and who controls them.

“I control all of the properties here in Aspen,” Hunt said. “I make all the decisions for them. Do I have bankers? I do. Do I have investors, I do.”

Hunt also described his investors as “friends” and as “people that care very much about Aspen.”

This week, he added “family” to his tally of different types of backers, but declined to share any details about his “family” funding.

Hunt, however, was willing to confirm details on a number of loans that he has taken out against his Aspen properties, and that are also visible in public records in the Pitkin County Clerk and Recorder’s database.

For example, in June 2014 Hunt used nine of his Aspen properties as collateral to secure an $83.45 million loan from Jefferies LoanCore LLC, which is financially backed by the Jefferies Group and the sovereign investment fund for the government of Singapore.

The Jefferies Group was founded by the late Boyd Jefferies, who lived for years in Aspen.

Hunt’s $83.45 million mortgage is against nine properties, perhaps easiest described by their current or past well-known tenants or owners: The Bodega/Grey Lady buildings on Mill Street, the Gap building, the Bidwell building, the Crystal Palace/Grand Finale buildings, two retail spaces in the Paragon building, the Conoco station, the Aspen Daily News building, and the Crazy Shirt and neighboring Magasin buildings on the Hyman Avenue mall.

And last month, an entity managed by Hunt borrowed another $13 million from Jefferies LoanCore LLC, putting his loans from Jefferies at a total $96.45 million.

“I’m friends with those guys,” Hunt said of his relationship with Jefferies LoanCore LLC.

Hunt confirmed that the various corporate entities associated with the properties he controls must make mortgage payments on the loans to Jefferies LoanCore LLC.

“So far, so good,” Hunt said Wednesday.

And Hunt shows no signs of slowing down, as he has three other Aspen properties under contract, including the Casa Tua, or Guido’s, building, the neighboring Pismo Gallery building on the Cooper Avenue mall, and the Bootsy Bellows building, which is on Hopkins Avenue where La Cocina used to be.

The Bidwell building on Cooper Avenue in Aspen.
The Bidwell building on Cooper Avenue in Aspen. Credit: Brent Gardner-Smith/Aspen Journalism

Financing arrangements

Hunt also confirmed that he has borrowed $50.73 million from various sources since 2012 against his Aspen properties that have been paid back.

In October 2012, an LLC Hunt controlled borrowed $20 million from an entity affiliated with Aristone Realty Capital LLC of New York in conjunction with the $13.25 million purchase of the Gap building at 204 S. Galena St.

That loan was paid back in May 2014, Hunt confirmed Wednesday.

In December 2012, Hunt borrowed $6.63 million from Aspen real estate broker Lorrie Winnerman as part of his $22 million purchase of the Bidwell building.

Winnerman confirmed she was paid back in July 2013.

“I helped on the interim financing,” said Winnerman, who has also helped broker deals for Hunt on at least six of the Aspen properties he has bought since 2010.

By July 2013 Hunt had also secured an $8.5 million loan from Alpine Bank in Aspen against the Bidwell building.

Scott Gordon, the former Aspen branch president at Alpine Bank, who is now working for the bank in Denver, confirmed the loan to Hunt was approved by the Aspen branch’s loan committee and that it was paid back in February 2014.

In January 2014, a Hunt-controlled entity borrowed $2.6 million against two retail spaces in the Paragon building on the Hyman Avenue mall from Sunflower Bank, a Kansas bank with a mortgage-lending branch near Denver.

A month later, a Hunt entity borrowed $11 million from Sunflower Bank against the Bidwell building. Both of the loans from Sunflower were paid off in May 2014, Hunt confirmed.

Also in January 2014, a Hunt entity borrowed $2 million from the Donald Wilson Jr. Trust against the Bodega and Grey Lady buildings. That loan was paid back in December 2014, Hunt confirmed.

So Hunt clearly has lenders. And it’s possible that Hunt has his own ample means.

Consider that in December 2007, while still working in Chicago, Hunt paid $14 million for a home on upper Red Mountain, and did so in his own name. He took out a $9 million loan against the house from North Community Bank in Chicago as part of the deal.

Hunt bought his Red Mountain house property from Toni Zurcher, a granddaughter of Walter Paecpke, the father of modern Aspen. Zurcher said she only recently met Hunt and that the Paepcke family was not funding his real estate projects.

Not all of Hunt’s Chicago real estate projects went down in flames in the recession.

An entity controlled by Wilson, for example, paid $12.35 million in December 2012 for one of Hunt’s properties at 1003 N. Rush St. in Chicago, after Starbucks opened a two-level store in the redeveloped space.

A Hunt-controlled entity bought the property, according to Crain’s Chicago Business, for $9 million in 2008.

Editor’s note: Aspen Journalism and the Aspen Daily News are collaborating on coverage of downtown development in Aspen. A version of this story was published by the Aspen Daily News on Friday, Oct. 30, 2015.

Brent Gardner-Smith, the founder of Aspen Journalism, and who served as AJ’s executive director until August 2021 and as editor from 2011-2020, is the news director at Aspen Public Radio. He's also been...