{"id":2445570,"date":"2019-06-20T21:36:00","date_gmt":"2019-06-21T03:36:00","guid":{"rendered":"https:\/\/www.aspentimes.com\/news\/judges-order-will-keep-aspen-club-afloat-for-now\/"},"modified":"2019-06-21T07:47:23","modified_gmt":"2019-06-21T13:47:23","slug":"judges-order-will-keep-aspen-club-afloat-for-now","status":"publish","type":"post","link":"https:\/\/alwaysmountaintime.com\/kspn\/local-news\/judges-order-will-keep-aspen-club-afloat-for-now\/","title":{"rendered":"Judge\u2019s order will keep Aspen Club afloat for now"},"content":{"rendered":"
\n
PCL Construction Services have haulted their efforts on the Aspen Club, a high-profile construction project due to finance restructuring.<\/strong>
Anna Stonehouse\/The Aspen Times<\/em><\/figcaption><\/div>\n<\/figure>\n

The financially distressed Aspen Club & Spa is getting a $4 million injection to retain any chance of being redeveloped into a luxury fitness and wellness center and fractional town-home project owner its current ownership.<\/p>\n

U.S. Bankruptcy Judge Joseph G. Rosania Jr. ruled Thursday the club can obtain the financing to keep its business afloat while it tries to reorganize its debts, devise a plan to emerge from bankruptcy, settle more than $25 million in debts to contractors and $50 million to other creditors. Construction work on the residential and commercial development project has been dormant since the fall of 2017.<\/p>\n

\u201cI understand that there\u2019s a lot of anxiety and angst that exists in this case,\u201d the judge said, \u201csince construction has been stopped for a long time, about a year and a half.\u201d<\/p>\n

Rosania Jr. had the option of selecting either EFO Financial or GPIF Aspen Club to provide the interim financing. Or he could have ruled against any interim financing, which would have spelled the end for the club\u2019s redevelopment under its current ownership, led by Aspen resident Michael Fox, while leaving the creditors little to show.<\/p>\n

The judge went with Florida-based EFO Financial Group, which will provide $4.05 million to the club. It originally had an offer of $6.75 million, but Aspen Club attorneys reduced that amount after attorneys for five secured creditors \u2014 Gould Construction ($1.7 million), Ludvik Electric Co., PCL Construction Services ($18.8 million), Revere High Yield Fund ($12.2 million) and GPIF Aspen Club ($34 million) \u2014 mounted pushback.<\/p>\n

Creditor GPIF Aspen Club Redevelopment, which The Aspen Club owes the most, also tried to provide interim financing by submitting an offer Tuesday, but the amount did not cover the more than $325,000 owed for Pitkin County property taxes as well as dues to the neighborhood homeowners association.<\/p>\n

Aspen Club attorneys as well as Michael Fox, the company president, said GPIF was trying to provide financing through what they referred to as \u201cloan to own\u201d tactics using aggressive contractual terms to force the club into default so it could take over the property. Club attorney John Young said GPIF also is looking out for its bottom line only, with no concerns about the construction firms owed cash.<\/p>\n

\u201cGPIF doesn\u2019t care about any of the creditors behind them,\u201d he said.<\/p>\n

Jason Cohen, counsel for GPIF Aspen Club, said that\u2019s not the lender\u2019s endgame, as evidenced by its withdrawing its foreclosure action<\/a> on the property in March. He also took a dig at Fox.<\/p>\n

\u201cThere\u2019s no way GPIF would ask these men and women to work and not got paid \u2026 that\u2019s what Mr. Fox did,\u201d he said, adding \u201cthere\u2019s just no truth that we want to own this property. We don\u2019t want to own this property. They just want to get paid off.\u201d<\/p>\n

GPIF Aspen Club, which is affiliated with Dallas investor Jeff Goff\u2019s GP Invitation Funds, acquired a loan note from FirstBank in December 2017. GPIF is associated with companies that own the Canyon Ranch luxury resorts in Tucson, Arizona, and Lenox, Massachusetts, and the Brown Palace hotel in Denver.<\/p>\n

FirstBank originally had agreed to provide The Aspen Club a loan of $45 million, but withdrew a $15 million installment in the summer of 2017, forcing the club to stop construction that fall, Fox testified Wednesday.<\/p>\n

The judge noted that his decision to allow interim financing was based in part because the club is behind in property taxes to the county, and it also is behind on its neighborhood homeowners association dues. His decision came after an evidentiary hearing held most of Wednesday in Denver.<\/p>\n

\u201cWe all agree, I think, the proposed financing is an exercise in sound business judgment, because all parties agree the property is in immediate need of preservation,\u201d Rosania Jr. said. \u201cThe only other financing available is from GPIF. The court finds that GPIF\u2019s offer is inferior on a number of bases.<\/p>\n

\u201cFirst, it does not include payment of real property taxes to the county or its HOA dues. And respectfully, as a judge sitting in the district of Colorado, it\u2019s extremely important to me to see the real property taxes and HOA dues be paid. The amounts really are quite nominal in the larger scheme of things. And if we\u2019re going to turn this project around and get it off the ground and pursue the plan on any bases, first they need to be paid.\u201d<\/p>\n

Testimony also included remarks from appraiser Christopher Donaldson, who said Wednesday the Aspen Club land is worth $43 million and will have a build-out value of $200 million, should the project ever get completed.<\/p>\n

The judge also leaned on Donaldson\u2019s testimony to make his decision.<\/p>\n

Work on the project \u2014 including a remodel of the 40,000-square-foot Aspen Club & Spa building, the construction of a 54,000-square-foot lodge with 20 timeshares, and 12 multi-family affordable-housing units \u2014 came to a near halt in August 2017 when subcontractors abandoned the site because they were owed money for labor and materials.<\/p>\n

Mark Gould, CEO and CFO of Gould Construction out of Glenwood Springs, said his firm\u2019s work is done.<\/p>\n

\u201cWe\u2019re not going back to work for Michael Fox,\u201d he testified.<\/p>\n

The judge also touched on the impacts on the community.<\/p>\n

\u201cI\u2019m sensitive to that group of creditors, of course, because \u2026 when contractors and subcontractors don\u2019t get paid, it causes a ripple effect on the economy where now the contractors can\u2019t pay their employees, and their employees can\u2019t pay their bills, and unfortunately, some of that has probably happened here.\u201d<\/p>\n

Fox said he still wants to complete the project.<\/p>\n

\u201cI believe completing the project creates a much higher return for the creditors,\u201d Fox testified.<\/p>\n

Rosania Jr. currently is overseeing the joint administration of two bankruptcy cases \u2014 The Aspen Club & Spa LLC declared Chapter 11 on May 16<\/a> and Aspen Club Redevelopment LLC made a near identical filing May 17 in the U.S. Bankruptcy Court for the District of Colorado in Denver. A trustee has not yet been appointed to the case.<\/p>\n

rcarroll@aspentimes.com<\/a><\/p>\n

via:: The Aspen Times<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

PCL Construction Services have haulted their efforts on the Aspen Club, a high-profile construction project due to finance restructuring.Anna Stonehouse\/The Aspen Times The financially distressed Aspen Club & Spa is getting a $4 million injection to retain any chance of being redeveloped into a luxury fitness and wellness center and fractional town-home project owner its […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-2445570","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-local-news"},"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-06-20 01:22:03","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"KSPN The Valley's Quality Rock","distributor_original_site_url":"https:\/\/alwaysmountaintime.com\/kspn","push-errors":false,"_links":{"self":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2445570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/comments?post=2445570"}],"version-history":[{"count":1,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2445570\/revisions"}],"predecessor-version":[{"id":2445586,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/posts\/2445570\/revisions\/2445586"}],"wp:attachment":[{"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/media?parent=2445570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/categories?post=2445570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kspn\/wp-json\/wp\/v2\/tags?post=2445570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}