Inside Real Estate News » Greenwood Village

John Fielder’s house hits the market

John Rebchook — Wed, 16 Jun 2010 21:04:20 +0000

The courtyard at John Fielder's home in Greenwood Village.

After a hard day at the office, John Fielder loved to come home to his Greenwood Village house, sit under the shade provided by many of the trees on the 1.6-acre site along the Highline Canal, and unwind.

“It kept me sane,” said Fielder.

Of course, as most people know, Fielder’s office is the antithesis of some high-rise building along 17th Street. Instead,the office of Colorado’s best-known nature photographer is the great outdoors, which might be some hidden gem of a mountain stream or Colorado ranches, the subject of one of Fielder’s many coffee-table books, which included text from the late James Meadow, a feature writer at the Rocky Mountain News.

And his “day” typically is 13 weeks traveling and photographing the state, which provided him the time to spend with his family, including his late wife Gigi and two grown daughters.

Fielder’s home priced at more than $1 million

Now, Fielder has decided it is time to sell his Mediterranean-style home on 1.6 acres at 940 E. Sunset Court. The ranch-style home has five bedrooms and four baths and a total of 4,712-square-feet – 2,981-square-feet of living space and a 1,731-square-foot basement. It’s being listed by Barb Fullerton of Fuller Sotheby’s International Realty for $1.199 million.

John Fielder in his backyard

“Anyone who has seen the move, It’s Complicated, (starring Alec Baldwin, Meryl Street and Steve Martin), will recognize this house,” Fullerton said. “It wasn’t in the movie, but it is the same style.”

Fullerton said the first couple to own the house, initially built in 1974, although Fielder put on an addition, hailed from Marseilles. “That’s my understanding,” Fullerton said. “That’s why the house looks like it could be in the French countryside. It’s one of the few houses in Greenwood Village with a red-tile roof.”

Many people might have assumed that Fielder, given his profession, might have called the mountains his home. Indeed, he has built a home 10 miles north of Silverthorne in Summit County in the Ptarmigan Wilderness area, 1,000 feet above the Lower Blue River Valley, which he insists in the most beautiful spot in Colorado – high-praise indeed, from someone whose photos often are as intense and as vibrant as a painting by a master.

His home was his sanctuary, his rock

“I lived here because it was better to be in Denver for business, politics and family reasons,” said Fielder, 59, an ardent environmentalist, while Realtors and others toured his home during an open-house held by Fullerton. Later, Fielder sold and autographed his books, as well as selling never-seen-before photographs that he displayed on his walls. “The house is in the Cherry Creek School District, so it was good for the kids. But I knew when I sold my publishing company three years ago, and with my daughters grown and living in the Washington Park area, I knew I would move to the mountains.”

However, because he still owns a photography gallery in the art district along Santa Fe Boulevard, he probably will buy a small town home, perhaps off 6th Avenue, as he will be driving down from the mountains every week or two to visit the gallery, teach a class, or attend a function.

It was love at first sight when they first saw the home about 25 years ago.

Home spoke to him

About 75 people recently attended an open house in John Fielder's home.

“We had probably looked at 50 homes in Greenwood Village and Cherry Hills,” Fielder said. “We heard from a neighbor that this home had just gone on the market. The person who bought it, thought he could subdivide the land and put another home on the property. But in Greenwood Village you needed at least an acre for each home, and this lot has 1.6-acre. So he bought it and immediately put it back on the market, and we bought it.”

Fielder, a native of North Carolina, made the decision to move to Colorado when he was 14. He discovered Colorado when his art and science teacher, Dolly Hichman, took his class to a cross-country field trip to the Rocky Mountain National Forest. “I told her that I would someday live here, and that was what, 46 years ago,” Fielder said. “I still keep in touch with her. Dolly Hichman is now 93 years old. I saw her not that long ago and we were identifying the genus and species of flowers in the mountains. She used to pack a bunch of kids in her station wagon, and we would go on a five-week field trip. I often use her as an example in speeches of how a teacher can change your life.”

Once in management at May D&F

After graduating from Duke University, “with a degree in accounting, can you believe it,” he moved to Colorado in 1977 and soon found a job…in retail.

“I worked for May D&F,” the former dominant department store chain in Colorado. “I started at the bottom and worked my way up to the general manager of the Southglenn May D&F, which is now a Macy’s,” Fielder said. “I was at the executive level and it paid well. One day I said to Gigi, “What would you think if I quit my job and turned my nature-photography hobby into a full-time job? She looked at me and said “Are you crazy? I’ll divorce you if you do.” But he said they later decided to give the nature-photography shot, with the understanding if he couldn’t make any money at it after a year, he would return to the business world.

Hits his stride as a shooter

John Fielder signs books at a recent open house in his home.

But it didn’t take long for his photographs to capture the imagination of consumers and retailers. He published the 1982 Colorado Scenic Calendar and showed it to 130 book and gift stores, and all but one stocked it. While it sold pretty well, his first break came when he found a venture capitalist to buy half of his publishing company and financed his first coffee table book, Colorado’s Hidden Valleys, which eventually sold 100,000 copies in 1983. “That got me started and led to the publication of my first book and 38 more, as well as several hundred more by other photographers and writers, mostly picture and guide books around the country about up to 35 different states at out peak,” Fielder said. ‘The fine-art print business did not start to work until I had built a reputation.”

He has many fond memories of living in his Greenwood Village house.

Taking photos in his pajamas

“Family of course….riding bikes, pushing strollers, with the kids on the Highline Canal Trail,” Fielder said. But he wouldn’t be a photographer, if some of his recollections didn’t include taking beautiful photos.

And he didn’t have to lug heavy equipment, trek for miles along paths to find the right spot and light, or brave rapids in a raft. “Being up in the mountains, or at ranches, and traveling the state, is my job,” Fielder said. “It’s hard work and very physically demanding. I’m not complaining. I love it. It’s a great way to make a living. And I’m not like some nature photographers who have to spend 90 percent of their time on the road. I could make a living by mostly staying in the state, and I feel very fortunate about that.”

One big difference is at home, he could take photos while wearing his pajamas. The quality didn’t suffer, as a haunting and ethereal photo of the Highline Canal from his back yard, shows.

John Fielder didn't have to go far to take this shot of the Highline Canal, which borders the site of his home in Greenwood Village.

Pinnacle tops $100 million in sales

John Rebchook — Fri, 05 Feb 2010 21:49:50 +0000

Buyers paid more than $33 million last year for 53 units at the Pinnacle.

The Pinnacle at City Park South last year bucked the trend of super-slow condo sales in the Denver area.

In 2009, buyers paid more than $33 million for units in the Pinnacle, arguably making it the best-selling condo project in the Denver area last year. (Peloton in Boulder actually sold more units, according to an analysis by Hanley Wood Market Intelligence. But the Boulder market is not a direct competitor with the Denver market.)

Since 2007, when sales started at the only high-rise condo project along City Park, buyers have paid about $101 million for 174 units for the two-building community in east Denver.

“Honestly, sales were down some in 2009 for us and everyone else,” said Herb Emmeran, of Chicago-based Equity Marketing, which is in charge of sales and marketing for the only high-rise project along City Park.

“But we probably did better than most,” Emmerman added. “In the good years, which started a few years back, sales were very strong. We continued to sell very well last year. ”

In 2008, 56 units sold for $37 million – only two more than in 2009, but for $4 million more. In other words, the average price of all units sold in 2008 was $660,714, while the average unit sold last year was $611,111.

While overall condo sales in the Denver area fell by 9 percent in 2009 from 2008, according to an analysis of Metrolist data by independent broker Gary Bauer, the Pinnacle’s sales activity was even more remarkable given its price points. In the $600,000 to $699,999 price range, condo closings in the overall metro area fell by 44 percent in 2009 from 2008. And for units priced above $2 million, closed sales volume fell by 80 percent. The Pinnacle has one remaining penthouse unit on the market. The asking price? $2.75 million for 4,646 square feet of unfinished space that spans two stories. The buyer might expect to pump another $1 million or so into finishing it.

Emmerman said the most significant difference between 2009 and previous years was the age of the buyer. “When we started, we had more empty nesters. In the early years, we sold a lot of larger homes in the tower and penthouses in the first tower.”

Last year, 35 percent of the sellers were less than 35-years-old and 46 percent of them had been renters. Empty nesters, many who previously hailed from Park Hill and other nearby neighborhoods, had trouble selling their single-family homes last year, he noted.

Meanwhile, first-time home buyers were invigorated by the $8,000 federal tax credit available to them. ”That helped us maintain our sales pace,” Emmerman said. Still, older home buyers were not totally out of the market. “Sixty five percent of our buyers were over the age of 35.” He said the extension of the first-time home buying tax credit, coupled with the new $6,500 tax credit for some existing owners, also should help sales in the Pinnacle during the first half of the year, before they expire.

While many may think that Pinnacle only has high-end units, condos are available starting at just under $300,000, with other units priced to $1.2 million.

Since “Day 1,” when the project kicked off about four years ago, the average price of a unit sold has been $370 per square foot, he said. “Our current contracts are averaging about $400 per square foot. We’re not the cheapest out there. But we provide views and a location that no one else can offer.”

And while they have cut the asking prices on some units, they have not slashed them, which has been the case at other projects, he said. He said they are still able to make a profit – not as much as they originally hoped, of course – but at the same time they aren’t destroying the value of the people who bought at the Pinnacle when the overall market was much stronger.

“We wanted to maintain the integrity of the project, while still being profitable,” he said. “We might help some buyers now a little bit more with upgrades.”

When the project, developed by Opus Northwest, first kicked off about four years ago on the site of the former Mercy Hospital, Emmerman said they weren’t sure how well it would be accepted.

“But it has never been an issue of being accepting it; everyone immediately loved it,” Emmerman said. “It’s been a great asset to the neighborhood. Everyone loves that you can just shoot up 17th and it is easy to get to downtown. It’s also an easy drive to I-70.

That’s exactly right, said Debbra Fagan, a broker with Fuller Sotheby’s International Realty. Fagan and her business partner, fellow Fuller broker Wendy Handler, have sold a number of units at the Pinnacle.

“Our clients who have moved into the Pinnacle just love it,” Fagan said. “They think it has a Manhattan-type view. It’s like living over Central Park. And you have everything downtown, all of the 17th Avenue restaurants, and all the new developments along Colfax, including the new Tattered Cover, which is just around the corner. And, of course, everyone loves having the park right there.”

She said most of the buyers at the Pinnacle also checked out some condo developments in downtown, as well as in nearby LoHi, because a number of those projects also offer fantastic views. She said few of her buyers at the Pinnacle looked at suburban projects, such as the Landmark. Typically, buyers at the Landmark are moving from big homes in Cherry Hills or Greenwood Village, and want to stay in that area.

But Dee Chirafisi, co-owner of Kentwood City Properties, said some clients have wanted to see everything out there, in the downtown area or along the southeast suburban corridor. In fact, she has found that very few of her buyers at the Pinnacle seriously considered more low-rise buildings in and around downtown.

“It’s a lifestyle change,” Chirafisi explained. “A lot of high-rise buyers want to see all of the high-rises and decide whether they want to be more urban or more suburban. They want the lock-and-leave lifestyle, and all the amenities, such as the pool and workout rooms. And with light rail, people who buy at places like the Landmark can quickly and easily get downtown.”

That said, she said no one she has put into the Pinnacle has regretted it.

“It’s a great building,” Chirafisi said. “It’s very well constructed and has a developer with a great reputation behind it. People love the location, especially now with all of the great things happening along Colfax. And those views are just unbelievable and one-of-a-kind.”

Hanley Wood Market Intelligence ranked top condo closings last year by a variety of measures, at the request of InsideRealEstateNews.com. It gathered information from developers and public records.

Denver ties for top city in Case-Shiller report

John Rebchook — Tue, 24 Nov 2009 22:14:23 +0000

Home prices in the Denver-area fell by 1.2 percent in the third-quarter from the same period in 2008, which tied Dallas for the top spot in the country, shows a S&P Case-Shiller report released today.

The report shows that the U.S., overall, saw prices drop by 8.9 percent during that time period. And the 10 and 20 city composites in the report, fell by 8.5 percent and 9.4 percent, respectively.

“Neither Denver nor Dallas saw that meteoric rise in prices other cities did, so it is logical that they would not see the meteoric declines,” said Tom Cryer, a broker with the Kentwood Co.

Overall, the third-quarter report is a marked improvement over the 14.7% decline in the annual rate of return reported in the second quarter of 2009, and the 19.0% drop in the first quarter.

“We have seen broad improvement in home prices for most of the past six months,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month to month improvements in September than in August in both seasonally adjusted and unadjusted figures.”
Nationally, the U.S. National Composite rose by 3.1% in both the second and third quarters of 2009. Both the 10-City and 20-City Composites posted their fifth consecutive monthly increase with September’s report.

Steve Blank, a broker with Fuller Sotheby’s International Realty, said that the 1.2 percent decline in Denver is “freakishly good,” and better than he would have expected.

“I would say that things are pretty well bottoming out now, and if they are not at the bottom, they are close,” he said.

But he said that the market is only down by 1.2 percent because of price improvements at the lower-priced homes, as expensive homes are still hurting.

“There are some phenomenally good deals at the high-end,” Blank said.

However, there is some good news for buyers of luxury properties, he said. Just recently, lenders started making more competitive jumbo loans – that is, for mortgages of more than the conventional loans that top out at $417,000, he said.

“One lender offers what it calls “doctor loans,” he said. These loans are fixed for either 10 or 7 years and are amortized over 30 years.

“You can get them at in the 4.375 percent or 4.75 percent range,” Blank said. But you need a credit score of 740 or higher, and typically lenders want at least 20 percent down, he said. Thirty year fixed jumbo loans also are available in the 5.5 percent range, for extremely qualified buyers who put at least 20 percent down, although he said occasionally a lender will allow only a 10 percent down payment.

Diane P. Huttner, a broker with Prestige Real Estate Group, said the top ranking at Case-Shiller is wonderful.

“That is really good news,” she said. “That tells us something about our market.”

But she agrees with Blank and other Realtors that the top-end of the market is still “quite challenging.”

She said that she has noticed a number of expensive homes recently selling in the Hilltop and Cherry Creek areas for less than the mortgage amount, although she said one expensive home in Cherry Creek recently sold for a mere $15,000 below the asking price.

And she said she spoke to a builder about buying some land near the Preserve in Greenwood Village. The builder, who constructs homes priced above $2 million, said even if she gave the land to him, “no one wants to pay me what it would cost to build a home.”

But she said for someone wanting to move up, it may be worth it to sell their home for even a slight loss, because they can drive a great bargain for a luxury home.

Mike Rinner, of the Genesis Group, which tracks housing along the Front Range, also said that the most recent Case-Shiller ranking is good, and continues a trend seen for most of the year.

He said Denver and Dallas each have has seen seven months of consecutive improvements from the previous months this year. But some of that, especially in mid-year, was because of seasonality, he said. Even in overall down years, there are some month-to-month improvements for seasonal reasons, he said. No markets are showing consistent improvements from the same month in 2008, Rinner noted.

While that, with today’s report are encouraging, he said the market still faces more pain.

“I think it is going to stay negative, as far as price appreciation,” Rinner said. “We will be lucky if we hit zero (price appreciation) next year. In the third quarter of this year, foreclosures jumped 54 percent from foreclosures last year. And with more foreclosures, and fewer jobs, it is just tough to get a housing recovery. Housing demand is a function of employment.”

Still, for those able to buy today and hold on until 2012, will be rewarded, said Cryer, of Kentwood.

He said 2010 will not be that much different from 2009, and 2011 “will not be super. But in 2012, I guarantee you that you, me, my neighbors and everybody will wish they had bought those short sales and foreclosures in 2009. If you want a “lock it and leave it” lifestyle, and plan to retire in the next few years, now is the time to buy a condo in the Landmark. Look at the confleucen of events we have with low interest rates, a good supply of homes to choose from at the upper end, and depressed prices. It just takes one of those factors to go away to completely change the buying opportunity we have today.”

Area	Appreciation since 2000	September to October change	1-year change from October
U.S.	46.58	0.4%	-7.3%
Atlanta	10.12%	-1.0%	-8.1%
Boston	54.7%	-0.6%	-2.8%
Charlotte	19.05%	-0.7%	-7.0%
Chicago	30.78%	-1.0%	-10.1%
Cleveland	4.97%	-1.6%	-3.5%
Dallas	19.90%	-0.6%	-0.6%
DENVER	28.91%	-0.4%	-0.1%
Detroit	-26.93%	0.2%	-15.1%
Las Vegas	04.7%	-0.1%	-15.1%
Los Angeles	68.43%	0.3%	-6.3%
Miami	49.09%	0.4%	-14.0%
Minneapolis	24.51%	-0.5%	-8.4%
New York	75.01%	-0.0%	-7.7%
Phoenix	9.26%	0.8%	-21.8%
Portland	49.72%	-0.5%	-11.8%
San Diego	55.37%	0.4%	-2.4%
San Francisco	35.81%	1.3%	-2.6%
Seattle	49.26%	-0.4%	-12.4%
Tampa	40.27%	-1.6%	-15.2%
Washington, D.C.	79.71	-0.4%	-2.8%
Composite-10	58.82%	0.0%	-6.4%
Composite-20	46.58%	0.0%	-7.3%

General contractor and subcontractors protected at Landmark/Meridian

John Rebchook — Mon, 02 Nov 2009 22:32:50 +0000

The general contractor and 26 subcontractors owed more than $2.3 million for work on the bankrupt Landmark and Meridian condominium towers in Greenwood Village have won an important agreement in bankruptcy court in Denver that protects their ability to be paid.

At the heart of the matter is an additional $30 million that developer Zachary Davidson’s group is poised to get from its main lender, Hypo Real Estate Capital Corp., the subject of an earlier InsideRealEstateNews.com blog today. Davidson’s group, 7677 East Berry Avenue Associates L.P., already is on the hook to Hypo for more than $90 million. The additional $30 million in debtor-in-possession financing would be instead of $15 million in DIP financing from Carmel Partners in San Francisco, which Davidson had announced soon after filing for Chapter 11 reorganization bankruptcy on Aug. 30., citing $168 million in assets and $116 million in liabilities.

“We opposed (the DIP financing) at first,” said Thomas C. Bell, a partner with Denver-based Davis Graham & Stubbs, who represents the general contractor, Dallas-based Beck Residential LLC, and 26 local subcontractors. The subcontractors have claims ranging from $1,000 to $200,000.

“Our mechanic liens would have been wiped out,” under the initial debtor-in-possession, or DIP, financing agreement, Bell said today. “Should Hypo have chosen to foreclose, all of our concerns would have been wiped out. We are definitely now in better shape. ”

If Davidson’s group was to default on the DIP financing and Hypo chose to foreclose, it would have only needed to bid the amount it was owed, whether it was $10 million or $30 million, and that would have left no money available to Beck and the subcontractors, Bell explained.

Instead, Hypo has agreed not to place its repayment of the $30 million ahead of the money owed to the subcontractors, although the exact amount they will be paid still has not been determined.

“I think it was as good as we were going to get,” Paul Higgins, managing director of Beck Residential told InsideRealEstateNews.com last week. Higgins, however, said he would have preferred that the court had specified the amounts the workers would have been paid. Instead, that will be determined at a later time.

In a colorful phrase called the “Liquidation Waterfall,” court documents spell out what will happen to the mechanic liens in the event of a default and foreclosure. As part of the terms of the liquidation waterfall, Hypo would “pay in full all undisputed Mechanic’s Lien Claims (including interest to the extent by law),: and would escrow the full amount of all disputed mechanic lien claims.

“To be clear, the DIP Lender will not cause a foreclosure sale or otherwise cause the conveyance or liquidation on terms that will defeat this Liquidation Waterfall, including by restricting the funds available for distribution to the Mechanic’s Lien Claims,” according to court documents.

Also important, Bell said, is that the court set deadlines for filing objections to claims by three of the main players – Beck, Environmental Landworks and Milender White Construction. Anyone filing an objection needs to file a “proof of claim” by Nov. 30 and they must be “filed and served” by Jan. 25, which the court said will expedite resolutions.

Typically, a general contractor is paid by the developer, who then pays the subcontractors. At the Landmark/Meridian, the general contractor, Beck, had a clause in its contracts with the subs saying that if it did not get paid, the subs would have no claim against Beck.

Since Beck has not been paid, lawyer Bell said the subs, who along with Beck have filed mechanic liens of about $3 million on the project, would have had a difficult time collecting from Beck. Davidson, who did not immediately respond to a request for a comment, is disputing some of the claims. Still, Beck wants to protect the rights of the subs and see that they are paid, said Bell, who in addition to being a lawyer is a certified civil engineer.

In addition to Beck, Land Title and Environmental Landwork, others who have filed mechanic mechanic liens include Blue Architects, Buchanan Yonushewski Group, Code Fire LLC, Colorado Comfort Products and Dal Tile.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

Hypo commits another $30 million to Landmark

John Rebchook — Mon, 02 Nov 2009 20:53:36 +0000

Hypo Real Estate Capital Corp., lender on the bankrupt Landmark and Meridian in Greenwood Village, is committing about another $30 million to the European-styled condominium towers off Interstate 25 near Belleview Avenue.

The $30 million in what is known as debtor-in-possession financing, would be instead of the $15 million it had been negotiating with Carmel Partners of San Francisco, as previously reported by InsideRealEstateNews.com. The money, similar to a construction loan, will be used to complete work on the project, so units can be sold and the funding can be repaid.

Hypo, however, is providing not only more money, but at a better interest rate for the developer, than Carmel had proposed, according to court documents. The $30 million, which will be drawn down and repaid by condominium sales, if all goes well. If not, Hypo would have the option to foreclose, according to attorneys familiar with the situation.

Developer Zachary Davidson’s group can draw down no more than $10 million at a time, which is then paid back as soon as possible, according to attorney Thomas C. Bell, partner of Denver-based Davis Graham & Stubbs, who is representing the general contractor, Dallas-based Beck Residential LLC , and subcontractors on the project.

Last week, Bell won an important court decision providing safeguards for Beck and 26 local subcontractors who have filed mechanic liens for work they said was performed, but which they have yet been paid by Davidson’s group.

Davidson’s development group, filed for reorganization under Chapter 11 Bankruptcy on Aug. 30, citing $168 million in assets and $116 million in liabilities. Neither Davidson, nor his lawyer could immediately be contacted for comment. Davidson’s group currently owes slightly more than $90 million to Hypo.

But according to the 44-page order by U.S. Bankruptcy Court Michael E. Romero, Davidson’s group could find “no credit available on more favorable terms,” than that offered by Hypo. Davidson, the debtor, “has been unable to obtain unsecured credit,” and does not have “sufficient available sources of working capital and financing to operate its business or maintain its property in the ordinary cause of business,” according to bankruptcy documents.

Carmel is entitled to a $300,000 break-up fee “in the even that the Court approves any other post-petition financing,” for the debtor, which is Davidson’s group, 7677 East Berry Avenue Associates L.P., according to documents.

Still, Davidson’s group has determined that the Hypo financing: provides it with the “best opportunity to rehabilitate and complete construction”; more favorable pricing and terms than the Carmel loan; and presents a better opportunity for obtaining consensus among the debtor’s stakeholders, according to bankruptcy court documents.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

Landmark plans to reorganize, not liquidate

John Rebchook — Tue, 22 Sep 2009 15:44:30 +0000

Zack Davidson, the developer of the Landmark high-rise condominium project in Greenwood Village that filed for reorganization under Chapter 11 about three weeks ago, has no intention of moving to Chapter 7 liquidation.

Indeed, the Landmark remains “open for business,” Davidson said in a letter to Realtors.

“Unlike some developers that have declared Chapter 11 reorganization and subsequently ended up in Chapter 7 liquidation, The Landmark has a strong asset to liabilities ratio,” Davidson wrote in a recent letter to Realtors. He also sent a letter to residents and tenants at the Landmark along Interstate 25 near Belleview Avenue, as I reported in an earlier blog.

Davidson said that his bankruptcy is different than other high-profile bankruptcies in the Denver area, such as Village Homes and McStain Neighborhoods.

The company is reporting $168 million in assets and $116 million in liabilities, some of which it is disputing.

Here is a copy of Davidson’s letter to Realtors:

We value our relationship with Realtors and believe it is important to keep you informed on the Chapter 11 reorganization filing for The Landmark

Since we entered into the reorganization on Aug. 30, our team has been working diligently through the many legal steps associated with the filing.

While it is early in the process, the court is making decisions that we believe your buyers might be interested in knowing about, and The Landmark team is pleased about.

Judge Michael Romero granted our motion for the interim use of cash collateral to continue day-to-day operations at the community. This is good news for the community since it assures visitors and residents that we’re continuing with the first-class service and maintenance of the residential towers and the retail shops. Your clients will see the beautiful streetscapes, stylish storefronts and immaculate lobbies and amenities that are the trademark of of our community.

The next important step in our reorganization is securing post-petition funding for operations.

Our hearing about funding is set for Oct. 1. We have a fully executed loan agreement with Carmel Landmark LLC for a loan of up to $15 million. This is known as a Debtor-in-Possession (DIP) loan and the use of proceeds from this loan will provide capital for all ongoing operations and will pay for costs associated with the reorganization.

The lender is an indirect subsidiary of Carmel Partners III, LLC, a prominent $700 million real estate investment fund headquartered in San Francisco with offices around the country, including Denver.

Denver-native Ron Zeff founded Carmel Partners in 1992 serves as Carmel’s CEO today. When approved by the court, the new lending facility will provide enough capital to complete all remaining construction in the development, as well as provide funds to pay for the day-to-day ongoing operations of the Homeowners Association, the retail center, and the costs necessary to market the residential and retail.

Just this week we filed a complete set of financial statements with the court that demonstrate our financial viability.

In the Summary of Schedules, we reported assets of $168 million and liabilities of $116 million, including $15 million of unsecured creditors, some of which is disputed. Unlike some developers that have declared Chapter 11 reorganization and subsequently ended up in Chapter 7 liquidation, The Landmark has a strong asset to liabilities ratio.

Each re-organization is unique, and ours is vastly different than what your clients may have read about with other local builders, including Village Homes, McStain or John Laing Homes.

The Landmark community is completely finished on the outside and there is only interior customization work left to be done in residences at the two towers and in some of the retail space. The Landmark remains financially viable, which is why Chapter 11 protection has been granted by the court.

We have a full schedule of Court activities in the weeks ahead, including the first creditors meeting and the hearing regarding the post-petition funding, however, it is important for us to bring to the Court a motion asking for approval to close homes that are under contract.

We have 23 buyers under contract and one reservation, all of whom are anxious to move into The Landmark and The Meridian. We understand from our legal counsel that is very typical for judges in Colorado to grant the motion to close homes because it is in the best interest of all parties to generate sales that inevitably allow the loans related to the partnership to be paid off.

We have also received the approval of Hypo (our largest creditor and primary lender) to begin closing units again, which will be looked upon very favorably by Judge Romero. We are hoping to be able to start closing residences again in October and move new homeowners into our community.

Homebuyer deposits are held at Land Title, (Editor’s note: a co-sponsor of InsideRealEstateNews.com) and are not exposed to any risk of any kind during the Chapter 11 proceedings.

This is important because you can be assured that the deposits are not put into our general operating funds but are separated and secure at Land Title. These funds are not at risk and if your buyer contracts on a home at The Landmark, their deposit would also be placed with Land Title.

Let us just assure you that The Landmark is open for business.

Our retail shops are over 80 percent leased and we continue to have strong interest in the remaining available retail spaces and the available condominium homes. Don’t be hesitant to bring your prospects to our community. FHA and Conventional financing is available for residences at The Landmark at current market rates and with standard down payments.

Your buyers will love our extensive amenities, including concierge services, rooftop spas and decks, infinity-edge swimming pool, spectacular mountain views, state-of-the art fitness centers, wine cellars, private dining rooms, private movie theater, art studio and much more.

The brokerage team of Rike Palese and Katie Everett from Re/Max Professionals, Classic New Homes, has onsite staff to answer all of your questions. Please visit our sales center, open regular hours of Sunday and Monday from 11 am to 6 pm, and Tuesday through Saturday, 10 am to 6 pm. If you have questions, please contact Rike Palese at (303) 552-5550.

Regards,

Zack Davidson

CEO and President

Contact John Rebchook with real estate news at JRCHOOK@gmail.com or 303-945-6865.

Landmark developer updates bankruptcy

John Rebchook — Sun, 20 Sep 2009 16:17:00 +0000

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A judge in the Landmark bankruptcy trial has approved a motion to allow the developer to use $120,899 in cash for day-to-day operations.

The judge also has allowed the developer’ to pay a potential $300,000 “break up fee” to Carmel Landmark LLC, which plans to provide $15 million in financing to the high-rise condo project near Interstate 25 and East Belleview Avenue in Greenwood Village, which filed for Chapter 11 bankruptcy on Aug. 30.

The developer, Zack Davidson also is seeking to continue to retain Denver-based Brownstein, Hyatt, Farber, Schreck as its law firm.

“However, because Brownstein is a very large firms and the Judge and opposing counsel are concerned about possible conflicts, a hearing has been set for September 22, to review the Application for Employment Brownstein ongoing throughout the case,” Landmark developer Zack Davidson told retailers and residents in a letter.

I think Davidson deserves praise for being so transparent and upfront regarding the bankruptcy, which cannot be easy for him.

Far too often, when a a project enters in bankruptcy, often people impacted by it are left in the dark. Sometimes they only learn about developments in the case when a reporter calls them for a comment, or they hire their own lawyer to protect their interests..

Following is a copy of the letter Davidson distributed.

Since our last update on September 4th, our team has been working diligently through the many legal steps associated with Chapter 11. We entered Chapter 11 on August 30, 2009, and there have been 68 items filed in the case, related to everything from the mundane task of address changes; to certificates of mailings to creditors; to the very important tasks of interim orders on the use of cash collaterals and opposing counsels objections; and motions related to the Debtor-in-Possession loan.

If you’re following along side us, either because you are also a creditor and you’re receiving information in the mail, or you’re accessing court documents online through the courts record access system, the sheer volume of filings can seem daunting, surprising or both. Let me assure you that most of these filings are customary and completely par for the course in a reorganization case. There are a few filings that are noteworthy and we’d like to point them out and offer some additional insight.

Statement of Financial Affairs and Summary of Schedules

These two documents were filed with the Court on September 14th. Together they represent our financial status. The Summary of Schedules details all of our assets and liabilities. Assets include The Landmark and The Meridian towers, the retail shops and the additional assets of personal property, deposits on homes, the sales tax rebate agreement with Greenwood Village, retail leases, and office equipment, furniture, etc. The liabilities include secured and unsecured creditors and creditors holding unsecured priority claims. Every asset and every liability is listed in the Summary of Schedules document. The Statement of Financial Affairs details our sources of income and payments from May 31, 2009 through August 30, 2009.

Interim Orders Authorizing Use of Cash Collateral

Judge Michael Romero granted our motion for the interim use of cash collateral to continue day-to-day operations at the community. The interim order is for a specific timeframe, from September 4, 2009, through October 5, 2009. It permits us to use the revenue generated from rent for operating expenses, including our office overhead, building maintenance, warranty work, marketing and public relations. The total approved budget for the 31-day period is $120,899, of which $45,649 is allocated to building maintenance and warranty work. Our hearing for the ongoing budget and DIP financing is schedule for October 1st and 2nd. At this hearing, we will present our case for approval of our Post-Petition Financing, including the DIP Loan.

Carmel Landmark LLC Financing Fee and Employment of Professionals

Other items brought before Judge Romero include a financing fee related to our funding agreement with Carmel Landmark LLC. In an Emergency Motion to Approve Post-Petition Financing Break-Up Fee and Expenses for Carmel Landmark, LLC, our attorneys detailed the necessity of agreeing to pay a fee equal to 2 percent of the maximum amount of the DIP loan, or a total of $300,000, if the DIP loan is not approved by the Court. Known as the “Break-Up Fee,” we believe it is a reasonable fee related to Carmel Landmark’s risk, labor and expenses of executing a loan agreement with us. Judge Romero approved our motion and this means we have finalized the loan agreement with Carmel Landmark. The next step comes at the hearing for Post-Petition Financing, set up for October 1st and 2nd, as mentioned above. Naturally, we anticipate that the issue of Post-Petition Financing will bring out many objections by our creditors, thus the Judge has set aside two days to hear the arguments on both sides.

As for professional employed by Landmark for the case, as noted earlier, we have Court approval to continue our work with Lawscomm for public relations services. We have permission to work with Brownstein, Hyatt, Farber, Scheck, LLP, on an interim basis as well. However, because Brownstein is a very large firms and the Judge and opposing counsel are concerned about possible conflicts, a hearing has been set for September 22, to review the Application for Employment Brownstein ongoing throughout the case. While we don’t know what the outcome will be, we’re hopeful that Brownstein will remain our legal counsel for the duration. The Application to Employ CPH Holdings, LLC, as Financial Advisor was withdrawn and is being amended.

Hearing for Creditors

The first creditors’ meeting is scheduled for October 7th at 9:30 a.m. This meeting is held to give creditors important information including deadlines and proof of claims information. The Chapter 11 filing automatically stays certain collection and other actions against us. This meeting will help to explain that information as well as other information about the process to creditors.

Motion to Close Homes Under Contract to be Filed

We have a full schedule of Court activities in the weeks ahead, however, it is important for us to bring to the Court a motion asking for approval to close homes that are under contract. We have 23 buyers under contract and one reservation, all of whom are anxious to move into The Landmark and The Meridian. We understand from our legal counsel that is very typical for Judges in Colorado to grant the motion to close homes because it is in the best interest of all parties to generate sales that inevitably allow the loans related to the partnership to be paid off. We have also received the approval of Hypo (our largest creditor and primary lender) to begin closing units again, which will be looked upon very favorably by Judge Romero. We are hoping to be able to start closing residences again in October and move new homeowners into our community.

We recognize that many of you are interested in receiving regular updates on the case, and we’ll continue to provide you with information as the case progresses. You can send specific questions to reorg@landmarkresident.com. We’ll aggregate the questions and send out another letter addressing questions you have in the near future. In the meantime, you can access any of the ca
ses records by going to http://pacer.psc.uscourts.gov/cgi-bin/links.pl, the Web site for court cases, getting a login name and password and looking up our case. Our case number is 09-28000. We hope this information is helpful to you.

Contact John Rebchook at JRCHOOK@gmail.com, or 303-945-6865.

Q&A on The Landmark Bankruptcy

John Rebchook — Mon, 31 Aug 2009 20:06:09 +0000

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All bankruptcies are complicated.

And certainly a bankruptcy involving a high-profile project such as The Landmark in Greenwood Village is especially complicated.

The company that owns it provided this question and answer to address many issues and facts surrounding the Chapter 11 bankruptcy filing.

Q. Which entity filed for Chapter 11 reorganization?

A. Everest Holdings, LLC; EDC Denver I, LLC; and 7677 E. Berry Avenue Associates, L.P. (7677), the entity that owns The Landmark and The Meridian residential towers, and The Village Shops retail project, filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Colorado. The filing does not include The European Village of Homes, which is a separate entity.

Q. Why is the Landmark going into Chapter 11?

A. The primary reason the entity that owns Landmark filed for Chapter 11 protection is that its construction lender, Hypo Real Estate, has been unwilling to provide a short term loan extension to facilitate the pay down of the remaining loan. The $182 million loan has been paid down by the owner approximately $90 million since May of 2008, to its current balance of $182 million. The ownership entity, 7677 East Berry Avenue Associates, L.P., owns The Landmark and The Meridian residential condominium towers, and The Village Shops retail project. 7677 filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Colorado in order to restructure and extend its loan with Hypo.

The deterioration of the local and national residential sales market, combined with the inability of prospective residents under contract to sell their existing homes, led to a slowdown in the projected sales at the project and corresponding loan pay down that would have resulted. Hypo has been unwilling to provide an extension of the November 1, 2009 maturity for even a few months without requiring us to agree to bulk sales and significant discounts on all remaining residences.

Q. Is Landmark going out of business?

A. No, absolutely not. The Landmark has been a tremendous success, even in this difficult economy. Since opening in May 2008, 139 condominium homes have been purchased at The Landmark and The Meridian, totaling approximately $95 million in residential sales. The Village Shops have also flourished, with over 80 percent of the available 185,000 square feet leased to some of Denver’s most successful restaurants, retailers and entertainment venues. In the past three months alone, four new retailers and restaurants totaling nearly 13,000 square feet have made lease commitments for available space at The Village Shops.

We will continue will all normal business operations, including selling homes and leasing retail space. No retailers will close their doors because of the reorganization and there will be no disruption of the operation of either The Landmark or Meridian Towers whatsoever, or the extensive residential services provided to our homeowners.

Q. When will The Landmark emerge from Chapter 11?

A.As with all Chapter 11 proceedings, Landmark must submit its reorganization plan within 120 days of filing. It is the company’s intention to file a plan within 90 days. Once the plan is accepted by the creditors and approved by the Court, it is “confirmed” and The Landmark can emerge from Chapter 11.

Q. How much does The Landmark owe its creditors?

A. The company has assets with a current value of approximately $165 million, and debts totaling $100 million, including $93.8 million in secured construction debt with Hypo Real Estate Capital Corporation (Hypo). Since 2008, 7677 has repaid Hypo approximately $90 million toward its $182 million construction loan, resulting in a current outstanding balance of $93.8 million.

Q. How will the company fund day-to-day operations?

A. We have executed a loan agreement for a debtor-in-possession financing facility of $15 million with Carmel Landmark, LLC, an indirect subsidiary of Carmel Partners Fund III, LLC, a prominent $700 million real estate investment fund headquartered in San Francisco with offices in Denver. Carmel Partners was founded in 1992 by Denver native, Ron Zeff, who continues to serve as the company’s chief executive. When approved by the Court, the new facility will provide enough capital to the ownership entity to complete all remaining construction in the development, as well as provide funds adequate to pay for the day-to-day operations of the community going forward.

Q. What is Hypo Real Estate Capital Corporation?

A. Hypo Real Estate Capital Corporation is a New York-based real estate lending company, owned by the German company, Hypo Real Estate Holdings AG (HRE). In June 2009, the German Financial Markets Stabilization Fund (SoFFin) acquired a 90 percent stake in the share capital of HRE, effectively nationalizing the company. HRE recently reported a loss of $1.13 billion Euros for the first six months of 2009.

Q. Why couldn’t Landmark just work out an agreement with creditors?

A. Over the last several months, the ownership group has repeatedly requested a formal extension of our loan with Hypo, which matures in November 2009. Hypo has consistently indicated a complete unwillingness to renew the loan for even a few months, unless we agree to bulk sales of unsold condominiums and a substantial discount on all unsold residences. These two options would have a hugely negative impact on the value of our existing homeowners’ property and eliminate the chance of returning the invested capital to the other stakeholders in the project. After exploring every available option available to us, including extensive attempts to refinancing Hypo’s existing loan in the severely distressed capital markets, we have determined that filing for Chapter 11 is the only option available to protect all stakeholders in the project. We regret that this is our only option, but Hypo has forced the ownership group into this decision, which we acknowledge is a very unfortunate outcome given the success of the residential sales and retail leasing in such a troubled economy.

Q. Are The Landmark property values expected to drop?

A. No, The Landmark expects the reorganization to allow active selling at current market rates. The project has always been able to achieve the appraised value for financing, and developer-owned residences units have been resold at an average of 10.7 percent above the original listing price.

Q. Will the reorganization affect potential sales?

A. There is no doubt that Chapter 11 reorganization will be a deterrent to some buyers. However, there continues to be tremendous interest in the project and prospects continue to visit on a consistent basis. The Landmark will continue actively marketing to the community, and also has the luxury of an extremely successful retail center at the center of it all.

Q. What is the status of residential sales and retail leases at the community?

A. The Landmark has been a tremendous success, even in this difficult economy. Since opening in May 2008, 139 condominium homes have been purchased at The Landmark and The Meridian, totaling approximately $95 million in residential sales. The Village Shops have also flourished, with over 80 percent of the available 185,000 square feet leased to some of Denver’s most successful restaurants, retailers and entertainment venues. In the past three months alone, six new retailers and restaurants totaling nearly 17,000 square feet have signed leases for space at The Village Shops.

Q. Does this filing include The European Village of Homes project?

A. The filing does not include The European Village of Homes project, a 13-acre, 216-unit master-planned community just to the south of Landmark, slated to be developed as the second phase of the project.

Q. Will Everest Development and Zack Davidson remain with the project?

A. Yes, in fact, Carmel Partners has required that Zack Davidson and the Everest Development team remain in place throughout the duration of the project as a condition of their loan.

Q. Will Re/Max Professionals/Classic New Home Sales still market the project?

A. Yes, RE/Max Professionals/Classic New Homes will continue to market the project. It is anticipated that the entire sales team will stay intact during the reorganization.

Q. What is the effect of the reorganization on future residents who have not yet closed?

A. Future residents are still under contract and their deposits are protected by Land Title. The Landmark expects to close on these units in the very near future.

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