By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
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By Melanie Asmar
By Michael Roberts
By Michael Roberts
An auction earlier this month of the Gilman Property, 6,000 acres of land adjacent to the Vail ski resort that a judge once called "some of the most valuable real estate in the state, if not the world," came off as scheduled--but not as expected.
Despite the advance hoopla, only two bidders were either willing or able to pony up the more than $30 million sought for the Eagle County property, which has been haggled over in bankruptcy court for several years. And the apparent winning bidder on September 3 was Glenn Miller, a cowboy who owned the land before going bankrupt. Miller showed up with new financial backers and even though his team offered less money, he has an edge on buying back the land he lost.
Although the property has been said to have enormous profit potential, it's had more than its share of environmental and financial disasters (see "Game of the Century," March 26). Miller bought the property in 1983 for roughly $15 million. In 1984, a large part of it was declared one of the state's first Superfund sites because of hazardous mining tailings and residue. In 1996 Miller went bankrupt and was thrown off the land amid accusations that Vail Associates was meddling from the sidelines. Lawsuits revolve around the property like a swarm of insects .
At one time, even recently, so did speculators. Bankruptcy trustee Joseph Rosania testified in court on May 13 that inquiries concerning the property were flooding in from exotic money bases such as the Bahamas, Switzerland and Saudi Arabia. But they all disappeared when it came time to put down money. Miller--who regularly appeared in bankruptcy court in cowboy duds, took frequent cigarette breaks during the proceedings and generally looked as if he didn't have two nickels to rub together--won out by forming a partnership with two newcomers from Tennessee, Ezon Incorporated and Belz Investco Inc.
But maybe it wasn't such a victory after all.
One insider who has followed the bankruptcy case says the other potential bidders may have dropped out for good reason. "I think they bought a pig in a poke," the insider says of the Miller team. "I'm shocked that anyone would pay that kind of money for that parcel. Sure, it's 6,000 acres next to Vail, but 4,000 of those are too steep to build on. And the places where you could build are at close to 10,000 feet. A retired couple from back East aren't going to want a luxury home at that altitude--not unless it's pressurized."
Some people involved in the bankruptcy case also question why the new group from Tennessee would include Miller in its plans when all he's had is bad luck with the Gilman property. The Tennessee developers couldn't be reached for comment. But Rosania says that perhaps a consent decree that Miller previously obtained from the federal Environmental Protection Agency, which is still in the process of cleaning up parts of the property, might have something to do with it.
EPA enforcement attorney Nancy Mangone says the consent decree gives the agency access to the cleanup site. Such a decree is an agreement with a property owner, she says, and isn't passed along when the property is sold. "We can do a couple things in that situation," Mangone explains. "First, we can ask the new owner politely for access. If that doesn't work, we have legal avenues we can pursue...I will say that we've enjoyed our relationship with Mr. Miller. We pretty much leave each other alone."
Miller's attorney, Jim Hahn, insists he isn't surprised that Ezon and Belz asked Miller to come aboard. "I think it's fair to say that they kept Glenn for business reasons," says Hahn. "And part of those business reasons would be his good standing with the EPA. I think they also believed that Glenn was entitled to be part of the process since he spent the last sixteen years trying to maintain the integrity of the project.
"We were very lucky to find these partners," Hahn continues. "It was like finding a needle in a haystack. But it doesn't surprise me that there were only two bidders. Basically, this project has so much breadth and depth that it doesn't lend itself to the auction process. If you were a prospective buyer, you've got to look at several things. There are all these questions about the property's environmental status, and there's still some ongoing litigation about a key 1,700-acre parcel. It's a piece of property that anyone in his right mind would have a lot of questions about. I'm sure several people went to the trustee and asked for more time to look it over, but he couldn't allow that."
But the deal isn't done yet. Representatives from Ezon and Belz spent last week huddled with Miller and Hahn trying to hash out the financial arrangements, which must be completed by September 24. As part of the deal, the Miller group put down a $1.7 million non-refundable deposit and has to figure out a way to come up with an additional $32.3 million.
If the deal isn't closed by the 24th, the trustee will have four working days to find another buyer or the property will be handed over to Turkey Creek LLC, a group of lawyers that purchased option rights on the property using money provided by Vail Associates and later foreclosed on Miller. If the deal is completed by the deadline, Turkey Creek will walk away with a cool $28 million.