Steamboat Springs A Littleton Realtor working on the sale of the Ski Town Inn and Suites in Steamboat Springs said this week he hopes to have a deal finalized within two months, but earlier hopes that the 68-suite hotel would open for ski season have not materialized.
"We have had offers, there's activity ongoing and we're in negotiations," said Ed Cheney of Sanborn and Co. However, he said the progress of efforts to sell the hotel have not reached a point where he can discuss specifics.
The Ski Town Inn and Suites, located on U.S. 40 between downtown and the mountain, has stood virtually empty for 32 months, and it doesn't look like it will open this ski season. The hotel, which includes 68 multi-room suites, operated under the ownership of Richcam Adventures from Dec. 24, 1997, until April 15, 1998. Court records show Richcam defaulted on the initial payment of a U.S. Department of Agriculture loan. Court documents also show that Vectra Bank began the process of providing a permanent loan to Richcam after telling the partners in August 1997 they were prequalified for a $5 million USDA-guaranteed loan. The loan origination was handled by bank officials in Denver before there was a Vectra Bank Colorado/Steamboat Springs. The local bank was not involved. According to the court, the original construction financing of $4.3 million was provided by Mountain Parks State Bank. That money was used up before the hotel was completed. Even as Vectra was processing the permanent loan, Richcam approached Vectra in September 1997 for an additional construction loan of $1 million.
The hotel was acquired by Vectra Bank/Denver as a result of a trustees sale conducted by Routt County Treasurer Jeanne Whiddon in August. It is listed for sale at $4.6 million. However, Vectra Bank was already owed $6.3 million on a construction loan to the original developers of the hotel when they defaulted more than two years ago.
"Given that the property is not occupied, I think it's priced competitively," Cheney said.
The ability of Vectra Bank to sell the hotel for its asking price could be affected by the outcome of a hearing pending before Steamboat Springs City Council.
The city of Steamboat Springs' original approval for the hotel included an additional wing on the building. Bill Moser of Moser and Associates, acting as the receiver for the hotel, was scheduled Dec. 5 to seek a 12-month extension of the permit allowing the 108-room expansion; however, City Council tabled the public hearing, and there are no immediate plans to build the addition.
Typically, a permitted expansion in good standing would have cash value at the time of a real estate transaction.
The transfer of hotel ownership to Vectra was almost a foregone conclusion because Vectra was by far the biggest creditor. But Vectra did not bid on the hotel at the trustees sale in the Routt County Courthouse in August, Whiddon said.
Instead, RFC Property I Inc., an assignee of another creditor, Phoenix Leasing, initiated foreclosure proceedings in District Court and bid just less than $1.5 million at the trustees sale.
However, Vectra had already listed the hotel with Sanborn and Co. in anticipation that it could acquire the hotel from the successful bidder in this case RFC Property I Inc. The deal was consummated after a 75-day waiting period required in a trustees sale.
Dave Pellegrino, a special assets manager with Vectra Bank in Denver, said his bank wants to see the hotel open and viable.
Ski Town Inn closed in 1998, less than a year after it opened, and has been sitting virtually empty for two years. The hotel operated under the ownership of Richcam Adventures. The developers, Stephen Campbell, Patricia Strandberg and Richard Porreco, defaulted on a $6.3 million construction loan from Vectra Bank. They also owned Phoenix Leasing $1.4 million for fixtures, furnishing and equipment. There are also five holders of mechanics liens totaling $1.8 million. The lien holders include Commercial Design Engineering, which has a claim for $312,000 against Richcam, as well as local companies Steamboat Lumber ($48,606) and Connell Resources ($6,000).
District Court Judge Richard Doucette ruled in late May that the principle in Richcam must pay Vectra Bank at least $6.3 million on the loan. But he also ruled that the mechanics liens must be paid before Phoenix, and then Vectra Bank will get its money.
The ruling by the judge cleared lien holders on the hotel to file for foreclosure proceedings.