Bachelor Gulch Ritz falls into foreclosure
AVON, Colorado – The Ritz-Carlton, Bachelor Gulch went into foreclosure this week, according to Eagle County records.
The luxury hotel’s owner, Gencom, owes Lehman Brothers $61 million, the County Treasurer’s records say.
Gencom is based in Miami, Fla., and owns 27 hotels and properties around the country.
The foreclosure sale date is Aug. 24, county records say.
In the meantime, it’s business as usual for the Ritz-Carlton staff.
“Ritz-Carlton is the management company and the foreclosure is unrelated to the operations of the hotel. The hotel will continue to provide the same high level of service and facilities our guests have come to expect,” said Parool Shah, market director of public relations for Ritz-Carlton. “There will be no disruption. Our sales team is in place and working hard, and the day-to-day operations will continue with the same excellence they always have.”
No one from Gencom returned phone calls Thursday, and no one reached would discuss it.
The foreclosure doesn’t seem to be a distress issue, but is more likely positioning the property for potential financial restructuring, say hotel and financial industry insiders.
The $61 million foreclosure likely makes this the largest in Eagle County history, county officials said.
The Ritz’s value for only the real estate – the building and land on which it sits – is $24,260,000, said Eagle County Assessor Mark Chapin.
What the Ritz might fetch on the open market is quite a different matter, Chapin said.
The Park Hyatt Beaver Creek sold May 20, 2007, for $69,050,000, and that included all the commercial space, Chapin said.
The Ritz dubs itself a world-class resort, and is also a world-class taxpayer.
Gencom owes $443,386.24 in 2010 property taxes that has not yet been paid. It’s due by April 30, said Mike Murray with the Eagle County Treasurer’s office.
Gencom also owes $52,520 in taxes on personal property. The Miami company has until April 30 to pay that bill, as well, Murray said.
Much of Gencom’s financial trouble stems from its deals with Lehman Brothers, according to an analysis by the Wall Street Journal.
Gencom’s lender, Lehman Brothers, collapsed in September 2008 in the biggest bankruptcy filing in U.S. history, $600 billion.
Other banks acquired Lehman mortgages on some Gencom resorts. For the Ritz-Carlton, Bachelor Gulch, that’s Swedbank.
Last year, Swedbank restructured part of Gencom’s loan on the Ritz-Carlton, Bachelor Gulch, the Wall Street Journal reported.
Gencom raised the money to partially pay Swedbank and other creditors by selling half of its company to Argentinean investor Alfredo Roman, a shipping magnate and investor. Roman and Gencom founder Karim Alibhai are using the $250 million from that deal to restructure similar problem loans on other properties, the Wall Street Journal reported.
Gencom could still end up with the Ritz-Carlton, Bachelor Gulch.
Gencom bought its Ritz-Carlton in Rancho Mirage, Calif., at its foreclosure sale for $230 million, Journal said.
“They have the same rights as any homeowner,” said Murray, who helps keeps track of foreclosures for the county Treasurer’s office. “If they want to withdraw their foreclosure, they can do that until noon the day before the sale.”
To do that they have to bring the loan current, Murray said.
Denver attorney Kent Karber with Holland and Hart is handling the foreclosure for Gencom. He politely declined to discuss it.
“We have a number of matters going on some high profile properties, but we cannot discuss them. We have standing orders,” Karber said.
But people in Beaver Creek were talking about it.
“There’s no question that the Ritz is a big part of Beaver Creek. It’s in everyone’s best interest to make sure that property is operating,” said Tim Baker, head of the Beaver Creek Resort Company.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or email@example.com.
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