Couple sues to stop Snowmass conference center sale
December 31, 2003
A Snowmass couple is suing the Snowmass Village Resort Association to stop the association’s impending sale of the town’s conference center.
Charles B. Gassett, president of the Top of the Village Condominiums Association in Snowmass Village, filed the lawsuit in Pitkin County District Civil Court on Friday with his wife, Pamela.
Vail is in the early stages of planning construction of a conference center.
The Snowmass lawsuit says the resort association will receive millions of dollars less than the center’s full worth if it is sold to the Silvertree Hotel.
The center was slated to be sold to the hotel owners under the name of Snowmass Conference Center LLC if a majority of Snowmass Village Resort Association members approved the sale as of midnight Sunday. If the sale is approved, it will close on today.
The Snowmass Village Resort Association –or SVRA – is made up of approximately 3,300 owners of commercial and residential space in Snowmass Village. Ballots for the vote were sent to members on Dec. 10.
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The lawsuit, which says the conference center has been valued by the Pitkin County Assessor’s Office at $7.5 million, claims SVRA’s executive committee has entered into a contract to sell the property to the Silvertree Hotel for $3.4 million. The suit asks the court to grant an injunction to stop the sale.
“We think it’s a bargain price. We also think that if the board is going to sell, they should consider a higher competing offer,” said Tim Flanagan, the Gassetts’ Denver-based attorney.
SVRA’s attorney, Maria Ticsay, said that for months the SVRA has heard objections from its members about the common assessment, similar to a tax, that they have had to pay to operate the conference center for the past year. If the sale to the Silvertree Hotel goes through, the common assessment would be eliminated for 2004.
The money that would come in from the sale will be used to pay off the loan the SVRA used to buy the center, and the assessment would no longer be needed to cover the center’s operational deficit, she said.
According to court documents, there is a $3.4 million mortgage left on the conference center, which was built in 1984. The 18 condominium associations that comprise the SVRA, including Top of the Village, bought the center from the town of Snowmass Village in 2002.
The lawsuit says the resort association has not fully explained why it wants to sell the center.
“We want to know why they want to sell it in the first place,” Flanagan said. “They say they’re doing everyone a favor by taking the operating expense off everyone’s backs, but we think it’s a valuable asset, especially since the assessor thinks it’s worth $7.5 million.”
But Ticsay said the assessor’s value of the property is actually an evaluation of the “real property” at hand and doesn’t take into account how the space must be used.
“The issue with the conference center is that it’s zoned for conference center use only,” she said. “It’s not like you could sell it to anyone in the world. Anyone who buys it has to operate a conference center there. You have to find someone who has to operate it at a loss.”
The Gassetts’ lawsuit claims the sale of the conference center is a breach of the SVRA’s fiduciary duty to its membership. “No reasonably prudent director would sell all or substantially all of a nonprofit organization’s real property and assets,” the suit says.
“The center has been operated as an amenity to the village, and if it’s sold to a private party like the Silvertree, there’s no guarantee that it would be operated in such a fashion,” Flanagan said. “Now, if someone wants to book 100 rooms there, reservations are sent out to all the constituent members who have vacancies. If it’s sold to the Silvertree, they’ll just fill up their hotel.”
But Ticsay said while there may be a small impact with the Silvertree owning the center, local condominiums have been competing with that hotel for years for the same business.
“There’s already a good number of business that already books at the Silvertree because it’s right there next to the conference center,” she said. “But there are big chunks of groups that prefer a condominium with a kitchen, and that’s a different type of property. The Silvertree isn’t putting themselves in a better position to get that business.”
Charles and Pamela Gassett did not return a call for comment.