Utah firm buys $57M debt on Trailhead Lodge in Steamboat

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SilverLeaf Financial, a Salt Lake City investment company, reportedly acquired the $57 million debt secured by 58 unsold luxury condominiums in the 86-unit Trailhead Lodge near the base of Steamboat Ski Area.

Trailhead Lodge, developed by an entity of Resort Ventures West, the developer of the larger Wildhorse Meadows project, has been in foreclosure proceedings since early May.

SilverLeaf specializes in purchasing nonperforming loans on commercial properties at below face value, and with the adjusted cost basis, helping the borrowers convert the asset into cash with enough room to deliver a return to its own investors.

Documents contained in the foreclosure filing at the Routt County Courthouse show 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 original debt. The original construction debt was extended by LaSalle Bank and acquired by Bank of America through a merger. The total unpaid balance is about $48 million.

Brent Pearson, chief financial officer of and a principal in Resort Ventures West, confirmed the debt purchase Tuesday. He said he and his partners were not involved in the transaction, though they were made aware that the debt would be auctioned and approved of that process.

He said his group continues to be involved with Trailhead Lodge, which is managed for nightly rentals by Wyndham Vacation Rentals.

“We’ve met with SilverLeaf people over the course of a couple days” since the debt auction took place, Pearson said. He said he believes it is a good thing for his group and that Trailhead is on the way to being marketed at prices adjusted to current economic conditions.

Pearson predicted in May that the filing of foreclosure proceedings would prove to be a precursor to restructuring the debt so that the unsold condos could be positioned properly in terms of asking price in a greatly changed real estate market.

SilverLeaf stated in its press release that it intends to aggressively market the Trailhead units based on their new cost basis. The release contained a statement by SilverLeaf principal Shane Baldwin, saying his goal is to sell the remaining units, paving the way for the completion of the Wildhorse Meadows master plan.

Recent acquisitions by SilverLeaf include $18.2 million in debt on more than 477,000 square feet of office space at the North Valley Tech Center in Thornton, a stalled golf course development in Flagstaff, Ariz., and development land in Park City, Utah.

The Salt Lake Tribune reported Aug. 11 that Baldwin was the defendant in a lawsuit in Nevada filed by real estate investors there who claim he misrepresented the ownership of foreclosed residential real estate, resulting in the loss of $1.2 million.

The suit also claims that Baldwin failed to disclose that in 2010 he had reached a plea agreement with the Utah Attorney General’s Office, allowing him to plead guilty to securities fraud and two counts of attempted theft for deceiving two people in another real estate deal in exchange for repaying the victims and agreeing to 18 months of unsupervised probation.

Pearson said he was aware of those legal matters but had received a strong indication that they were not as serious as they sound. He said the lawsuit appears to involve an “unfortunate disagreement” between investors and a developer.

SilverLeaf Vice President of Public Relations and Marketing Campbell Dosch could not be reached for comment late Tuesday afternoon.

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com

Comments

bigfatdog 2 years, 9 months ago

find out what they what they paid for the debt? 200k per unit?

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steamboatsprings 2 years, 9 months ago

Looks like they paid nearly retail, overpaying by a good margin given the value of bids that didn't win, the market and the quality of the building. The original developer missed their chance to accept reality and sell when prices where only 20% off which would have still allowed a profit. Maybe the lawsuits don't seem like a big deal to RVW given their outlook but it sounds like there could be real concerns here and people should be careful. Fraud doesn't sound like a disagreement.

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Scott Wedel 2 years, 9 months ago

"SilverLeaf Financial, a Salt Lake City investment company, reportedly acquired the $57 million debt"

Does not say the paid $57M for the debt, just that they acquired the debt. Considering it is distressed debt with the properties in foreclosure then it is extremely unlikely they paid $57M.

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Steve Windsor 2 years, 9 months ago

I don't think they paid $57M for the loan, they must have bought it for a substantial discount given the nature of the debt. Otherwise it wouldn't make sense. I know a business attorney that worked with Silver Leaf in a few transactions last year. Said he was very impressed with those guys. Maybe now trailhead will be able to move forward and sell their remaining units at a price more relative to todays market.

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steamboatsprings 2 years, 9 months ago

The price was likely more like $18-22M, sorry I wasn't clear. Sellout value is something like $24M given the quality of the construction and amount of units they need to sell so there is little margin.

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