Construction stalls at Snowmass
Aspen, CO Colorado
SNOWMASS VILLAGE, Colorado ” Developer Related WestPac officially suspended work on The Little Nell Residences Snowmass on Monday, citing a shortage of funds. Company executives expected the stoppage to put between 16 and 18 construction workers out of work immediately.
“We have continued to struggle in securing new construction financing for the building,” Related WestPac President Dwayne Romero said. “We didn’t want to expend any more of the equity dollars.”
The 27 luxury condominiums are designed to offer ski-in, ski-out access to Snowmass. They will be managed by the Aspen Skiing Co.’s five-star hotel, The Little Nell, and promise such amenities as 24-hour maid service, an exclusive owner’s lounge and private ski lockers.
Related WestPac is calling the work stoppage a “suspension,” but Romero acknowledged he didn’t know when work would resume.
“It’s not clear at the moment,” said Romero. “It will be driven by this continuing effort for new construction funding.”
Romero said the company has talked with upward of 60 different banks and financial institutions but has come up with no financing “and no strong leads ” so far.
Related WestPac has already pre-sold 16 of the 27 condominiums, according to company press releases.
In the meantime, Related WestPac has been financing the project itself. And for several months, Romero has been very open about the tenuous nature of that financial situation.
“We formally elevated this issue back on December 15,” Romero said, citing a memorable Snowmass Town Council meeting in which Romero first acknowledged that Related WestPac had lost its funding commitment for the project. At the time, Romero said the developer was funding construction out of its own pocket.
“But at some point, we’re going to run out of that pool. And we’re really close,” Romero said at the meeting.
In recent weeks, that scenario has seemed to be edging closer, as several indications have emerged suggesting that the developer is having cash-flow issues. Those include a $60,000 lawsuit over payment for a fence at Base Village, as well as six liens totaling approximately $464,000, filed against the developer and its partners at the Cattle Creek project in April. Cattle Creek is located between Carbondale and Glenwood Springs.
On Monday morning, The Little Nell Residences work site was noticeably empty. Several of the workers who were still in construction trailers on the site, or contacted by phone, said they hadn’t worked for a week or more ” and that they weren’t sure when they would be working again.
By Monday afternoon, word was official: Related WestPac was returning the $184,200 building permit that had been picked up by its contractor, unpaid.
“This is definitely devastating,” said Grant Orr, division manager for Denver-based McClone Construction, a subcontractor on the project. “On the 20th, I put 20 guys I know and like out of work.”
Mayor Bill Boineau initially noted his ” and the town’s ” shock that work had stopped. But later, he reconsidered that comment, noting that the developer had been very transparent about its funding challenges.
While he worried about the retail businesses in Base Village that were counting on more residential coming online soon, Boineau didn’t expect any dramatic reactions from the town, which reacted early, and arguably prudently, to the financial crisis.
Romero noted the company is still committed to building the temporary transportation center it has promised the town, a promise backed by a $2 million bond. Assuming the planning process was completed in a timely manner, Romero expected work to begin on that building sometime in April.
Romero also said that work was continuing on the first Viceroy Resort and Residences building in Snowmass.
The second building in the Viceroy Resort and Residences complex is being financed by the German bank Hypo, said Romero. Though the company had not yet received its first check from the recently-bailed-out bank, he anticipated receiving it shortly.
This is the fourth building on which Related WestPac has suspended construction. Three other delays were announced in October.