By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
Mayor Wellington Webb's administration is poised to give the Winter Park Recreational Association unprecedented control over development at the city-owned mountain resort--including handing over clear title to ninety acres of land that now belong to Denver taxpayers.
But top administration officials admit they know almost nothing about the one development already completed by the WPRA: a privately owned hotel built on the same public property ten years ago with the ski resort's okay. That deal, which took place largely outside the public eye, resulted in the land being controlled by some of the most notorious players in the savings-and-loan scandal of the 1980s--including Denver's Silverado Banking. And today the Vintage Hotel stands as a reminder of what happened the last time the WPRA ventured into the realm of high-stakes real estate development.
The city and the WPRA are now battling in Grand County District Court over whether the land on which the hotel sits may actually be a park. The city contends that it is--yet Denver parks manager Bruce Alexander says he "doesn't remember" who built the Vintage and has no idea who owns it now. The city attorney's office is equally perplexed about the hotel's lineage. "Back in those days, the WPRA sort of ran the show, and to a large degree they still do," says Assistant City Attorney Don Wilson, adding that it's unclear whether the city even has a copy of the hotel lease in its files.
Over the years, however, the ownership records of the Vintage have made interesting reading--for those who knew where to look.
The ski lodge had its origins in the early 1980s, when the WPRA, legally an agent of the city, signed off on a deal that involved a pair of high-flying Oklahoma developers and a group of freewheeling S&Ls. In two long-term leases signed in 1982, Oklahoma developers Joe R. Love and Don W. Hassebroek got control over roughly thirty acres of city land, says WPRA general counsel Mike Repucci. The Oklahomans planned to build a sprawling ski resort with three wings, including one devoted exclusively to posh condominiums.
Internal documents show that the original $10.8 million construction loan on the Vintage wasn't made until 1984, brokered by Savings Investment Service Corporation (Siscorp), a consortium of S&Ls that poured nearly half a billion dollars into development projects during the go-go Eighties. According to Repucci, the lenders participating in the Vintage loan included Silverado and three other thrifts. The lead lender was Commonwealth Savings of Fort Lauderdale, Florida, which, along with Silverado, made the government's Top 100 list of thrifts being investigated for criminal activity at the height of the S&L crisis.
Love and Hassebroek hoped to build one wing of the hotel first and then use it to leverage financing for the other two, says Repucci. They had plenty of time to pull it off, too: The leases approved by the WPRA ran to the year 2078. But the project quickly bogged down, with construction proceeding in fits and starts through 1985 and 1986. Love and Hassebroek's development company finally defaulted on the loan, and Silverado and the other lenders began foreclosure proceedings, taking over both the unfinished hotel and the lease on the surrounding land in 1987.
When the S&Ls decided to sue the WPRA over assorted lease provisions, the action proved a blessing for the ski area. In a September 1988 settlement, the WPRA won back control of the adjoining city land. The thrifts got the Vintage.
Silverado and the others began pumping money into the hotel to get it up and running, says Repucci. The only thing that prevented them from hanging on to the Vintage was their own financial collapse: The four institutions were all seized by government regulators, and loan broker Siscorp also began to unravel. The bankrupt Oklahoma company's chief executive later pled guilty to receiving loan kickbacks during the period when the Vintage loan was being arranged. (There is no indication that kickbacks played a role in the Winter Park loan.) At least one other Siscorp officer also went to prison.
The federal Resolution Trust Corporation wound up with the Vintage, and in December 1991 unloaded the property to its current owner, Utah hotelier John D. Cahill. Though Repucci says he believes up to $21 million was ultimately poured into the hotel by the original lenders, the government sold it to Cahill for $2.5 million.
According to John Cahill's son, Dennis, the Vintage is now financially stable and turning a profit. And Repucci says the WPRA is ready to jump back into real estate development, convinced it can create a world-class destination resort at Winter Park. Taxpayers needn't worry about losing title to their land, he adds: Any revenues derived from the sale or lease of the property will be counted as part of the WPRA's gross revenues. According to the formula worked out in a 1994 agreement with the city, notes Repucci, Denver will be entitled to a full 3 percent of the money.
That agreement replaced a deal in which the resort didn't pay the city a dime from its own profits, instead simply passing on 12.5 percent of its take from the Vintage lease. In part because the Vintage deal was so little known, those payments, about $7,000 per year, were widely assumed to have been from WPRA revenue.