Friday, September 27, 2002
Steamboat Springs American Skiing Co. is in danger of losing the 44-acre Tennis Meadows development parcel to foreclosure.
Fleet National Bank filed documents at the Routt County Treasurer's office Friday seeking to foreclose on $81.9 million in loans granted to American Skiing Co. Resort Properties in July 2001. The amount of outstanding principal on the loan is $41.8 million. Tennis Meadows is one of six pieces of undeveloped land here that ASCRP used to secure the loans.
Mark Miller, ASC's chief financial officer, said the company anticipated the foreclosure proceedings.
"The filing was expected," Miller said. "It was not a surprise. We're still in negotiations with Fleet Bank, but while we are negotiating, they are continuing a parallel course with their legal remedies under the agreement. We're optimistic about the outcome."
Miller did not make himself available for questions and spoke though Erik Preusse, ASC's senior financial analyst.
Tennis Meadows has figured prominently in ski area master plans over the years. When former ASC chief executive Les Otten came to Steamboat in late 1997, he approached the City Council with a major development plan that would have included hotels, condominiums and a people-mover gondola to shuttle guests to the ski area base.
Many people know Tennis Meadows best as the launch site for the Rainbow Weekend hot-air balloon festival every July.
Undeveloped land parcels at Killington, Vt., and The Canyons near Park City, Utah, also were used to secure the $81.9 million loan. Preusse could not confirm Friday if Fleet had initiated foreclosure proceedings at those resorts, but he didn't rule them out.
"If Fleet is taking that action at Steamboat, it wouldn't surprise me if they were doing the same thing at the others," he said.
The other significant pieces of land in Steamboat affected by the foreclosure proceedings are a 6.2-acre parcel between Snowflower condominiums and Gondola Square that has been identified as a potential hotel site. There is also a pair of smaller commercial lots in the Steamboat Village Commercial Center close to Mount Werner Road. Finally, two smaller parcels represent easements related to the larger parcels.
The Tennis Meadows parcel does not involve the ski area's large remote parking lot on Pine Grove Road. The parking lot comprises a separate commercial lot not implicated in the Fleet Bank loans.
Should ASC prove unable to successfully conclude its negotiations with the lenders, it would still have two periods of more than two months each during which it could "cure" the foreclosure proceedings. In any event, foreclosure would not be finalized until after the first of the year.
Fleet Bank is actually the agent for a portfolio of lenders who combined to make the original loan. The deed of trust granted in connection with the loan was originated in September 1998. But the language in the deed anticipated that it might be amended in the future by additional loans. The monies involved in the foreclosure filing were connected to a recording added to the deed in the summer of 2000.
By filing foreclosure documents here, Fleet is demanding payment of the full $41.8 million outstanding.
ASC notified investors through the Securities and Exchange Commission in May that it faced the possibility of foreclosure on loans, including those made by Textron Financial to fund the construction of the Steamboat Grand Resort Hotel and Conference Center.