San Miguel County Treasurer Jan Stout confirmed last week that her office had received a foreclosure package against RAL Mountain Village Lodging, LLC and that those documents are still under legal review.
RAL Companies and Affiliates President and CEO Robert Levine also confirmed the foreclosures in an open letter to the Town of Mountain Village titled “Difficult Times, Difficult Actions…”
In the letter, Levine explained that the developer is not unlike other firms struggling in a depressed economy, and that condominium sales have not been sufficient enough to cover the construction debt.
“Starting with the demise and bankruptcy of our equity and lending partner, Lehman Brothers, and ending with the impacts of the current weakness in tourism and leisure travel, depressed occupancy, lower room rates and high fixed operating expenses of a luxury resort hotel, we unfortunately find ourselves, not unlike any other similar properties, burdened with debt which is not supported by the current financial performance of the property,” Levine stated in his Oct. 25 letter. “Furthermore, the lack of residential condominium sales in this market to repay the construction debt, and the recognition of the reduced value of the hotel property in this economy has caused our lender to take logical action to secure the property as their collateral asset.”
Levine went on to say that his firm continued to maintain a positive relationship with its lender, a receiver has been put in control of the property “to protect the interests of all parties concerned.” (Levine’s complete letter is posted below.)
The foreclosure comes just before Capella Telluride prepares to open its doors for its third winter as Mountain Village’s premier lodging establishment. The property was developed and built over a nine-year period at a cost of over $200 million.
Despite the foreclosures, John Volponi, general manager of Capella Telluride and the Inn at Lost Creek said both hotels will be operational this winter and reservations are already pointing to a strong season.
“As far as Capella and the Inn at Lost Creek is concerned, they will still be operational this winter,” Volponi said Friday. “There is a dispute between the developer and the lender and it doesn’t have any affect on the hotel operations. We are still here working in preparation for this season; the employees still have jobs and we will be coming back.
“We really want to make sure everybody knows there are no changes in the hotel operations and reservations for this winter are shaping up rather nicely.
“I look forward to my continued involvement to assist our lender in the restructuring process, and ultimately recognizing our mutual vision in better times under different circumstances.”