Steamboat Springs American Skiing Co. announced Monday it has arranged financing needed to free the Steamboat Grand Hotel from a lawsuit that had frozen real estate closings at the 232-unit property at the base of the Steamboat Ski Area.
The Steamboat Grand, which is sold on a quartershare basis, remains roughly 51-percent sold, according to company officials.
The new financing for the hotel represents a small portion of a complex financial deal American Skiing executives say they completed this week to position the company for the future.
The deal brings the beleaguered ski resort company a new infusion of capital and restructured debt. Oak Hill Capital Partners, a Texas-based management group that holds a majority of ASC's common stock, has agreed to commit an additional $30 million to the ski area operator.
"I think it's fair to say we've made a fresh start," American Skiing CEO B.J. Fair said.
The next piece of the plan involves ASC's plan to sell the Steamboat Ski Area.
"We believe we continue to be on track to close the sale prior to the end of the year," Fair said during a conference call Monday. A "substantial number" of interested parties have signed confidentiality agreements that allow them to research the purchase, he added.
Closings of sales at the Steamboat Grand were suspended this spring after the general contractor who built the hotel filed a lawsuit seeking foreclosure on the hotel. The suit was filed because ASC and PCL/Colorado First, the contractor, could not come to terms on the final amount of the contract.
PCL/Colorado First argued that an unusual number of change orders during the two-year construction of the hotel increased the final value of the contract.
A settlement of the suit has been reached, according to ASC officials, but they needed to renegotiate their construction loan in order to raise an undetermined amount of cash to satisfy its terms.
ASC Chief Operating Officer Hernan Martinez said Monday that the company has continued to put Steamboat Grand quarter-shares under contract and a "substantial number" of sales are backed up waiting to close. However, he would not discuss the number of pending closings or the dollar volume.
Martinez said the settlement with PCL/Colorado First is in place and real estate closings should be free to close immediately after the restructured hotel financing is closed, within a matter of days.
"This has been very good news, especially for the Steamboat Grand," Martinez said. "I think it's a big vote of confidence from the lenders. I think they feel we need to put this one to bed once and for all."
The portion of the financial restructuring that involves the Steamboat Grand was worked out with TFC Textron Financial, which provided the senior loan for construction of the hotel. ASC officials said the loan is now sufficient to settle all liens imposed on construction of the Steamboat Grand.
In addition, the proposed amendment, which had not officially closed by midday on Monday, would provide money to allow ASC to complete eight penthouse units on the seventh floor of the Steamboat Grand.
Martinez said he is within days of finalizing agreements with a contractor who will finish the interior of the penthouses.
Martinez expects the work to be completed before ski season.