LoDo’s Nativ Hotel is going up for auction next month and its largest creditor wants nothing short of $7.9 million, according to court records.
That might be challenging, since the 16,800-square-foot hotel and nightclub at 1612 Wazee St. in LoDo has been on the market as recently as last year for a lower asking price of $7 million.
An online auction for the four-story, 18-room property is set to begin on June 6 through Ten-X Commercial and end two days later, according to information available on LoopNet. Bidders need to qualify in advance.
The auction is the result of last September’s Chapter 11 bankruptcy filing by Nativ Hotel owner KDA Properties.
“The auction was my suggestion very early on before we went the legal route with our lender,” Nativ co-owner Amin Suliaman told BusinessDen. “If you do it on the right platform, it opens us up to a national and international market. You know there are 10 guys in Denver who are going to want the property because they understand what it is, but hometown guys aren’t going to pay what you want to get out of the property.”
KDA Properties said in its September filing that it owed $9.6 million to four creditors. The bulk of the money, $8 million, was owed to Chicago-based Pangea Mortgage Capital. Pangea initiated the foreclosure process for the hotel building in December 2020.
Suliaman owns 49 percent of KDA Properties. Kenneth Ware, listing a Centennial address, owns the other 51 percent. Ware is also the entity’s second-largest creditor, owed $1.2 million for “capital investment,” according to the filing.
Pangea, which did not respond to a request for comment, and KDA Properties reached a stipulation agreement last month detailing the planned auction. The Chicago firm said in the stipulation that that auction must generate a minimum offer of $7.9 million, and $7.2 million of that sale will go to Pangea.
If not, the court will dismiss the bankruptcy case and Pangea can move forward with the foreclosure sale, according to filings.
“In that event, Pangea shall be free to immediately proceed with its public trustee foreclosure sale on the Property, UCC sale of the personal property, and to utilize any other legal and equitable remedies collect all amounts due against the Debtor, Nativ Hotel, LLC, Amin Suliaman, Kenneth C. Ware, and any other collateral securing the debt owed to Pangea,” according to the stipulation.
KDA Properties is also responsible for paying delinquent property taxes, the auctioneer’s transaction fee, the brokers’ commission of 3 percent of the gross purchase price and other fees, according to the filing.
KDA Properties purchased Nativ Hotel and its real estate for $6 million in 2018 after the previous owners pulled out of operations, Suliaman told BusinessDen at the time.
Hotel operations have been paused since the pandemic began, but Suliaman said he has recently been letting a local club promotion company host events at the property. That’s who Suliaman says was in charge two weekends ago, when two individuals were shot inside the building early on a Sunday morning.
“It’s just an asset. I’m not emotionally connected to it,” Suliaman said. “I am upset my customers and employees are losing something that was magical, but a building is a building.”