Company reaches settlement with European banks over stalled development
Ending a tumultuous period of multiple lawsuits and uncertainty in Snowmass Village, The Related Companies announced Tuesday that it will reclaim control of the Base Village project from the consortium of European banks that foreclosed on the stalled development last year.
Related Colorado president Dwayne Romero said the “massive” agreement between his company and the banks’ affiliate resolves nearly all of the pending litigation over the project. The deal will transfer to a Related subsidiary, Snowmass Acquisition Co. LLC, the titles for: the Viceroy Hotel, the arrival center and parking garage, retail units, unsold condominium units in the Capitol Peak and Hayden lodges, the Little Nell building and other land parcels, according to a press release.
Town officials said they were cautiously optimistic that construction of the partially finished Base Village — which voters approved in 2004 as a way to transform Snowmass into a year-round resort — will resume sometime after the closing between Related and the banks is finalized. The closing could happen this fall, said Related spokesman Steve Alldredge.
Construction halted on Base Village, which includes some 1 million square feet of retail, restaurant and residential space, in 2009 amid the global recession. Related accused a major project lender, Hypo Real Estate Capital Corp., of reneging on promised funds, while Hypo alleged that Related had stopped paying back $500 million in loans. Numerous lawsuits involving contractors, developers and the banks followed, and Base Village went into receivership. In November the development was sold uncontested at a foreclosure auction to Snowmass BV Holdco, an entity formed by the lenders, for $138 million.
Romero declined to say how much Related was paying to get Base Village back, citing confidentiality terms of the settlement. The $500 million debt on the project remained with the banks, and he said it was not relevant to the deal announced Tuesday.
Asked if he ever envisioned his company again being the driving force behind Base Village, Romero said he had retained a “glass half-full” outlook for the past few years.
“It was always our optimistic view that we would get there,” he said.
The project “fits in very well with what we’ve been attempting to do the past two to three years, as to restructuring our existing businesses and our existing assets,” Romero said.
Conversations with the town about extending vesting rights, which allow developers to build under previous approvals, will likely take place after the closing. Vesting for Base Village expires in 2014.
“We look forward to having those conversations with the community and other stakeholders,” Romero said.
Snowmass Village Mayor Bill Boineau said he hopes that in three or four months, Related officials and the Town Council can discuss how to shape Base Village.
“It’s definitely optimistic for the community,” he said. “We can stop holding our breath … and can start addressing the stalemate that has been going on here.”
That the new owner is Related is also a plus because of its involvement in the town, Boineau said. The company owns the Snowmass Center, most of the Snowmass Mall, the Snowmass Inn, the Mountain Chalet and property management firms.
“Related is involved in the community to more of a degree than most people realize,” Boineau said. “They’ve been here on the ground.”
Town Manager Russ Forrest said the agreement is a good step, as not knowing who the owner and the developer would be precluded many conversations about the project.
“We’re still kind of holding our breath until the parties get to the table for the closing,” he said.