16 Hidden Springs lots go to foreclosure sale today
Alpine Bank submits bid of $1.152 million for auction
May 18, 2010
Steamboat Springs — Routt County Public Trustee Jeanne Whiddon will conduct a foreclosure auction this morning for a portion of the stalled Hidden Springs Ranch subdivision west of Hayden.
The 10 a.m. sale outside Whiddon's office in the historic downtown Routt County Courthouse involves 16 building lots grouped into a single sale. Alpine Bank, holder of a deed of trust on the property, foreclosed on its borrower, 4S Development, more than a year ago. The developer owes Alpine Bank a little more than $1.785 million.
Whiddon said the original sale was scheduled for July 29, but that sale and succeeding sales have been continued one month at a time ever since. That pattern is typically a sign that negotiations are under way, she said.
Alpine Bank already has submitted a bid of $1.152 million, effectively setting a minimum bid for any third party hoping to acquire the building lots at today's auction. That strategy is called a deficiency bid, something that was rare up until the recent economic downturn, Whiddon said.
"They're bidding at the sale hoping someone will bid $1 more than their bid," she explained. "They're allowed to do that as long as they don't go below fair market value."
The bid is called a deficiency bid because it falls short of the total indebtedness. In this case, the deficiency is the $633,087 difference between the total indebtedness and Alpine's bid.
The bank originally loaned 4S Development $2.53 million in spring 2004. The outstanding principal on that debt is $1,268,594.
Hidden Springs, located west of Hayden Valley Elementary School on Breeze Basin Boulevard, is among several troubled developments launched by an entity called Mountain Adventure Property Investments. MAPI's local partners were 4-S Development, controlled by Ron Sills, and Grassy Creek Holding Company, controlled by Roger Johnson. Mountain Adventure and Grassy Creek were in Chapter 7 bankruptcy as of March 2009. 4-S was in Chapter 11 bankruptcy at the same time.
Whiddon said that if a third party submits a bid higher than Alpine Bank's deficiency bid today, they would be required to bring the full amount to her office by 3 p.m. They would not be liable for the $633,087 deficiency. However, Alpine Bank still would retain that right to seek to recover that amount from the original borrower in court.