print page | send as email | email editor

The property outlined in yellow in Teton Village has been forced into the first steps of foreclosure. Owner Tatanka Hotel Development has failed to pay on its $13.5 million loan. MAP COURTESY TETON COUNTY GIS

View our entire photo gallery >>

Wells Fargo Bank has forced a Teton County developer into the first stages of foreclosure on a $13.5 million loan made for a commercial lot in Teton Village.

The property, known as the H-1 lot, is scheduled for sale on the steps of the county courthouse Aug. 27. Tatanka Hotel Development Partners, whose principals include James Reinert and Antonio Ortega, are listed as the owners of the 3.26-acre property uphill of the Cody parking lot and east of the Tram Tower Townhouses.

An attorney for the landowners said the developers are working to prevent a forced sale to repay the bank loan.

“We’re in the process of trying to work it out with the bank,” said Frank Majorie, a Texas attorney representing the landowners. “We’ve been in constant conversations with [Wells Fargo]. We’re disappointed that they decided to take the first step. We’re confident that we can work it out.”

Majorie said his clients are sure the owners will avoid a foreclosure sale.

Bank Market President Pete Lawton said Wells Fargo attorneys advised him not to comment.

It’s not just the Tatanka partners who could be affected by a sale. Jackson Hole Mountain Resort President Jerry Blann said Tatanka owes his company between $5.5 million and $6 million. That loan is subject to a subordinate agreement, which means the resort’s claims come second to the bank’s.

If the bank forecloses on the first loan, under some scenarios the mountain resort might never recoup millions it is owed. Whether the resort – or Tatanka, for that matter – will lose investments remains to be seen.

First, a foreclosure sale must be scheduled and completed.

Then, “It depends on who bids on it and for how much,” Blann said. “The initial mortgage is somewhere around $14 million. If somebody bids less than that and gets it, then our second [mortgage] may be lost.”

Blann said the loss could be significant but it’s not surprising. In Aspen and Vail, Colo., commercial projects are sitting at resorts half completed. The struggle to obtain commercial loans is worse there, he said.

“So we’re fortunate in that regard,” Blann said. “At the same time, it certainly has an impact, particularly when you are trying to pay for a $31 million tram.”

According to land records, the resort has the right to pay off the sum owed to the bank, though purchasing a property in foreclosure is often complicated.

Properties sold on the courthouse steps go to the highest bidder, who must then have cash wired into a sheriff’s office account by 5 p.m. on the day of the sale. The delinquent landowners then have 90 days to match the price.

Meanwhile, Blann said the resort is going to see what plays out within the next few weeks. Often, deals are negotiated between landowners and lenders before a property actually makes it to sale.

The foreclosure would be the largest in Teton County, said civil process supervisor Cheryl Chidester.

“I think the next highest one we’ve had is just over $1 million,” she said.

The starting bid is listed at $14 million, which is more than the loan because it includes interest and other fees, she said. Chidester said the loan is accruing interest of $6,750 a day.

“It’s just getting worse for them,” she said.

Ortega also has three other properties in the foreclosure process, Chidester said.

Those appear to be time-share condos in the Teton Club, she said. Ortega owes $62,516 for those loans.

The resort sold the H-1 lot in 2006 to Crescent Mountain Resources for $12 million. The sale helped finance the Couloir Restaurant at the top of the Bridger Gondola.

During the sale, the resort negotiated to receive a percentage of sales from future development on the property rather than the $12 million up front, Blann said.

“We thought we had a developer who was going to be doing the right thing for the village,” he said.

At the time of the sale, Crescent Mountain Resources said it would develop a ski-in, ski-out complex with 50 units, all available for purchase, with resort-style amenities.

Instead, Crescent Resources sold the property to Tatanka Hotel Development Partners on March 30, 2007. During that sale, Blann said, he believes that Tatanka put some equity into the deal, but he said he could not recall how much. He also could not recall the purchase price.

Documents on file with the county clerk show Tatanka secured a loan from Jackson State Bank & Trust, which was later purchased by Wells Fargo, of $13.5 million, pledging the property as collateral in the mortgage.

During the sale, the resort’s agreement with Crescent Resources to receive a percentage of future sales was transferred to an agreement with Tatanka to pay a flat fee. The deal was changed because it was confusing, Blann said.

“During the transfer, they wanted to understand exactly what the obligation was,” he said.

That fee, which escalates over time, comes due next year, Blann said.

According to documents filed with the county clerk, the resort agreed to put its mortgage second only if bank loans did not exceed $18 million.

Meanwhile, Tatanka has not been paying Wells Fargo for that loan. Majorie said the loan matured and his clients have been in discussions to extend it or, otherwise, work it out. He said his clients are confident they’ll be able to develop the property.

“Obviously, with the recent events and the economy, that has, you know, made it a little more difficult for them to meet their timing,” Majorie said.

Bob Graham, owner and associate broker with Jackson Hole Real Estate Associates, said owners these types of properties often secure a loan to purchase the land and then roll that into a new loan to develop the property.

While Tatanka Hotel Development Partners may not have been able to secure a development loan, Graham said a likelier scenario is that they didn’t even try for one.

“It doesn’t make sense to do a development right now,” he said.

Graham called Tatanka’s troubles unfortunate for Reinert.

“He’s a nice guy who’s been beat up in this community,” Graham said.

In 2007 and 2008, Reinert, in another partnership with Ortega, proposed to build 500 homes in South Park priced for area workers, a project called Teton Meadows Ranch. A public outcry over the density of the project compared with surrounding neighborhoods abruptly ended when county commissioners approved a moratorium in May 2008 that stopped it and other large developments in their tracks.

Reinert and Ortega sued the county over that moratorium. The case is still being reviewed in a Casper court.

Graham said the situation for Reinert may not be as bad as it appears.

“Remember, Donald Trump went into foreclosure on his property in Atlantic City,” Graham said.