Steamboat Springs The office of the Routt County Public Trustee has confirmed that Bank of America has filed foreclosure proceedings on Trailhead Lodge at Wildhorse Meadows LLC, a luxury condominium project near the base of Steamboat Ski Area.
The action affects the remaining 57 unsold luxury condominiums in Trailhead Lodge and not the 27 residential units that have sold.
Documents contained in the notice of election and demand filed at the Routt County Courthouse show that the outstanding balance on a Bank of America loan of $57.36 million stands at $41.74 million. Alpine Bank also has a piece of the debt. The original construction debt was extended by LaSalle Bank and acquired by Bank of America through a merger.
Brent Pearson, chief financial officer and principal in Resort Ventures West, the development entity that oversaw the city permit process, marketing and construction of the lodge, seemed unfazed by the foreclosure filing when reached Friday afternoon.
“This is not what any of us expected when we began,” Pearson said. “What happened to Trailhead is the same thing that happened to every condominium project that launched in 2007. Given the circumstances, this is good for Trailhead Lodge and very good for the overall Steamboat market. Trailhead needs to go through this process.”
He added that it is significant that Resort Ventures West continues to manage Trailhead and the bank has not appointed a receiver.
Trailhead Lodge is a $71 million condominium project (including land costs) that broke ground in summer 2007. The five-story building comprises 184,000 square feet. A July 2007 sales event saw 62 of 86 condominiums go under contract with an aggregate value of $56 million. However, the majority of those contracts did not close, and a few of the original prospective buyers are in an extended legal proceeding seeking to recover their deposits on condos they no longer want.
In all, 27 residential and one commercial condominium sold at Trailhead. One-bedroom condos in the lodge sold for prices from $575,000 to $750,000, and two-bedroom units sold into the high $900,000 range. At the higher end, for example, a three-bedroom, four-bath condo sold for $1.45 million in 2009.
Public Trustee Jeanne Whiddon has scheduled a foreclosure sale on the unsold condos and their furnishings for 10 a.m. Sept. 7. It’s possible that during that event, a third party might acquire Trailhead’s assets by exceeding a minimum bid entered by Bank of America and delivering a cashier’s check, numbering in seven figures, to Whiddon by the end of the day. More likely is that the banks will take ownership of the property.
Pearson said the foreclosure sale date sets a process in motion.
“It means the recapitalization ticker has begun ticking,” he said. “It gets the whole process of (determining) overall ownership in the next 120 days going.”
The filing of the foreclosure notice does not signify the end of difficult negotiations, he explained, but an increase in the intensity of negotiations.
“The negotiations and discussions continue,” Pearson said. “There are a number of players in discussion, and foremost is the bank.”
The current ownership and debt structure attached to Trailhead has made it all but impossible to market the remaining unsold condos in the current real estate market, Pearson said. Restructuring ownership and debt will allow the project to re-enter the marketplace properly positioned, he said.
Pearson told the Steamboat Pilot & Today in July that the debt associated with Trailhead Lodge does not encumber other phases of the broader development known as Wildhorse Meadows. He said the same Friday about the impact of the foreclosure.
The notice of election and demand does not have implications for the nearby Wildhorse Marketplace commercial center or the more modest condos at First Tracks, Pearson said Friday. The single-family lots that sold out in The Range, a block from Trailhead, and the public people mover gondola that ferries skiers and pedestrians from a bottom terminal near Trailhead to the base of the ski area, as well as other amenities grouped in Trailhead, also are unaffected.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com