A bankrupt and unbuilt condo complex in Dillon that would-be residents have sunk millions of dollars into is slowly wasting away, worth far less than what its developer claims and likely cannot be completed, according to a company that wants to take it over.
Michigan-based Porritt Group, which purchased the debt of Uptown 240 last year and estimates it is now owed about $9.5 million and counting, is painting a bleak picture of the distressed project’s present and future as it asks the U.S. Bankruptcy Court to let it foreclose.
Cheered on by Dillon town leaders, Uptown 240’s developers broke ground on the 80-unit complex in 2019 but it floundered financially for several years before they declared bankruptcy in February. Only the foundation has been built and that will need to be replaced.
“There has been no significant work on the project since March 2020. Today, the project is nothing more than a partially completed parking structure,” Porritt Group said.
Uptown 240’s developers — brother and sister Danilo and Chantelle Ottoborgo — have “made repeated assurances that refinancing was imminent, but nothing ever materialized,” so current refinancing plans “should be met with great skepticism,” Porritt Group told a judge April 7.
Testifying under oath during a meeting with creditors March 23, Danilo Ottoborgo sounded an upbeat note about Uptown’s trajectory. He and his bankruptcy attorney predicted that financing will be provided in the coming months by Fairchild, a national lender.
“Our intention is to complete construction and complete this project,” Ottoborgo said.
He and attorney Keri Riley did not respond to BusinessDen questions this week about the far more pessimistic claims of Porritt Group and its attorney, Paul Urtz, who say the property is worth $11.4 million rather than the $27 million that Ottoborgo claims. That’s a problem since Porritt is owed $9.5 million and there is another $8.4 million in liens on the property.
“Debtor’s ‘business’ is not viable, there are substantial and continuing losses to or diminution of the estate (and) there is no reasonable likelihood of rehabilitation,” Urtz wrote April 7.
“Construction costs have increased substantially since 2020 and the project cannot be completed for a price that will allow the debtor to earn a profit,” he said.
Because the Ottoborgos and Uptown 240 defaulted on the substantial debt that Porritt Group holds, Porritt moved to foreclose on the property in October and a foreclosure sale was set for Feb. 24. On Feb. 23, Uptown 240 filed for bankruptcy, putting the sale on hold.
“The timing of the debtor’s bankruptcy filing leaves little question why the case was filed,” Urtz said. He alleges the Chapter 11 case was filed by Ottoborgo in bad faith.
A hearing on the matter is scheduled for May 2 at the U.S. Bankruptcy Court in Denver.