‘Makes me sick’: Uptown 240 condo buyers worry that they will lose their deposits amid project’s bankruptcy proceedings
After Barbara O’Brien, 78, moved to Summit County to be closer to family, she learned a condo building was being built near Dillon Reservoir, just where she wanted to be.
“I put a deposit down that was close to $80,000, which makes me sick,” she said.
After decades in law enforcement, Joel Cochran, 63, had only one retirement dream: to own a place on Dillon Reservoir and spend the rest of his days gazing out over it.
O’Brien, Cochran and dozens of other people signed contracts to buy condos at Uptown 240, a slickly marketed project that broke ground in Dillon in 2019, floundered financially for three-plus years, and then declared bankruptcy last month. Only the foundation has been built, and that will need to be replaced due to weather damage.
In doing so, they unknowingly wagered not only their combined $6 million but also their life plans on the assumption that Uptown 240’s developer, who has never built a building, would complete the project or at least return their deposit. Neither is guaranteed now.
“I think there’s probably a 90% chance that we have lost our money,” said Justin Phelps, who with his wife deposited $115,000 for a $575,000 one-bedroom condo on the fifth floor in early 2020. “We don’t think it’s looking too good, but I guess you never know.”
Between 2018 and 2022, 41 condos were sold on the top four floors of the proposed eight-story building. The buyers are residents of a dozen states and include an Omaha philanthropist, a spacecraft engineer from Golden and owners of an organic coffee farm in Hawaii.
Last Thursday, some of them listened in to a telephonic U.S. Bankruptcy Court hearing at which Danilo Ottoborgo, a developer of Uptown 240, testified under oath about the project. Others attended a second hearing that afternoon where attorneys debated its feasibility.
Ottoborgo said the $6 million paid by condo buyers has been spent on construction and another $57 million is needed to build Uptown 240. The sale of all 80 condos will generate $54 million to $59 million, Ottoborgo testified, and retail space will then generate profits for years after.
“Our intention is to complete construction and complete this project,” he said.
Keri Riley, the bankruptcy attorney for Uptown 240, said her client expects to secure financing within 60 days and have a plan for escaping bankruptcy in 90 days. She said the Ottoborgo family anticipates Fairchild, a national lender, will provide funding for the project.
Paul Urtz, an attorney for a prior lender owed $9.5 million by Uptown 240, doubts that. He noted that the Ottoborgos have been trying to secure a loan from Fairchild for two years. He also believes Uptown’s property is worth less than Riley claims.
“We think that, barring a miracle, this reorganization plan is not going anywhere,” he said.
Danilo Ottoborgo, who is developing the project alongside his sister Chantelle, faced questions about whether they were paid salaries while the project sat idle in 2020 and 2021 (they were), whether Uptown 240 received unpaid Paycheck Protection Program loans (yes, totaling $393,000), and whether the Ottoborgos paid themselves from condo deposits (yes).
“Is this your first development project?” asked David Rich, a Denver attorney who represents a neighbor of Uptown 240 whose land will be impacted by the development.
“Yes, sir. This is my first. I’ve been working on it for 16 years,” said Ottoborgo, who came up with the idea of turning his family’s Italian restaurant into condos as a teenager in 2007.
That restaurant, Adriano’s Bistro, was popular among residents and guests, including Phelps, who ate there as a child. So when he and his wife visited Dillon in early 2020 and saw the property was being turned into condos, they put $115,000 down for a one-bedroom.
“I wish we hadn’t been there in Dillon that day,” Phelps said in an interview.
He isn’t alone in wishing he’d never heard of Uptown 240. Matt Follett and his wife sold their house in Wisconsin in 2021, moved to Colorado, put a deposit down on a condo and planned to rent a house in Boulder for one year before moving to Uptown 240. That never happened.
“This has completely changed our retirement plans, completely reorganized where we are going to live and what we are going to do,” Follett said. “It kind of sucks, to tell you the truth.”
For Richard LaPierre, Uptown 240 was to be a respite from the scorching summers of Texas, where he lives. A $135,000 deposit in January 2019 snagged him a $673,000 condo.
“I’ve lost $135,000, but more importantly I’ve lost four summers in Colorado,” he said.
This story is from BusinessDen.com.
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