The historic 92-bedroom Hotel Jerome in Aspen, Colorado is facing foreclosure auctions on January 27, 2010. According to court records, the circa-1889 hotel was foreclosed because the owner, LCP-Elysian Aspen Owner LLC has defaulted on its mortgage balance amounting to $36.3 million.
The foreclosure process for the hotel was opened by the Pitkin County Treasurer’s Office when it filed an election notice and a demand for a sale.
Under the notice of election, the said owner has a loan balance of more than $36 million that should be paid to Jerome Property LLC. Public records showed that the company is the holders of the property’s deed of trust. The entity was established in Delaware last August 25.
The notice stated that the agreement contained in the deed of trust has been violated following the hotel owner’s failure to make a final payment upon reaching the maturity date. According to the Pitkin County Clerk and Recorder’s Office’s records, Jerome Properties has acquired the trust deed from Lehman Brothers Holding Inc. affiliate, the Aurora Bank, last August 31.
The original holder of the note was Morgan Stanley Mortgage Capital Inc.
The original trust deed, issued on May 24, 2007, carried an amount of $48 million. On the same day, Chicago, Illinois-based Lodging Capital Partners LLC and Elysian Worldwide LLC purchased the hotel that measures 113,282 square feet from Oklahoma Publishing for about $52.2 million. Oklahoma Publishing bought the hotel which is now facing foreclosure auctions for $33.7 million in June 2005.
The Hotel Jerome is currently managed and operated by luxury hotel company, RockResorts, a Vail Resorts Inc. subsidiary. Elysian Worldwide David Pisor said that the hotel has achieved and preserved its legendary status, statewide, nationwide and around the world.
He added that the company will work with RockResorts and Aspen city in order to reestablish the historic grandeur of the hotel.
According to industry experts, owners of the hotel can still prevent the foreclosure by filing a notice of intent to cure. They said that many commercial properties are now facing the threat of foreclosures. They explained that the massive job loss created business failures and many vacant properties.
Many landlords are scraping their coffers in an effort to pay their mortgages and make their accounts current. Adding to their problem is the rapid decline of property values. Industry experts are predicting that the number of residential and commercial properties that will be placed on foreclosure auctions will continue to increase in the following months.
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