Credit Crunch Hits the New West
Tamarack Resort Owners File for Bankruptcy Protection
By Matthew Frank, 2-19-08
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The majority owners of tony Tamarack Resort in west-central Idaho, owing more than $300 million to lenders and international banks, filed for bankruptcy protection in the U.S. Bankruptcy Court in Boise late last week.
According to Tamarack Resort CEO Jean-Pierre Boespflug, the Chapter 11 filing will have no impact on the resort’s day-to-day operation. “You can continue to do business with Tamarack Resort in a complete and normal way,” he said in an interview.
The two companies named in the filings are VPG Investments, Inc. and Cross Atlantic Real Estate, LLC, which own 27 and 48 percent of Tamarack Resort shares respectively. Boespflug owns Cross Atlantic Real Estate, and VPG is owned by Mexican businessman and resort co-founder Alfredo Miguel Afif.
Boespflug said the resort was counting on a $118 million dollar loan from the French bank Société Générale to complete the resort village, but the financing fell through. Société Générale is reeling from the loss of some $7 billion in a trading scandal, and banks around the world are pulling back from many types of loans in the wake of the sub-prime mortgage crisis and related problems in the finance world.
Because Tamarack did not receive the money by February 15—the day the bankruptcies were filed—the companies sought Chapter 11 bankruptcy protection to avoid foreclosure by creditor Credit Suisse, which is owed $262 million. Credit Suisse could have ended up with 75 percent ownership of the resort, and been “able to sell the company to whoever it wants,” Boespflug said.
“The filing we are doing here is so that Credit Suisse has no temptation to exercise on the pledge of their shares in Tamarack Resort,” he said. Bankruptcy filings can sometimes be, at least in part, a negotiating tactic between debtors and large creditors.
Tamarack’s troubles are an indication that luxury resort projects in the New West are not immune to the deep problems afflicting real estate and financial markets across the country. Moonlight Basin, a new resort in Montana, announced recently that it was seeking new financial partners, and even the much-ballyhooed Yellowstone Club is about to be sold.
The Tamarack bankruptcy documents give a brief but vivid glimpse into the internal financial workings of the resort, which recently announced an aggressive expansion plan including luxury condominiums, chalets and a European-style village, according to promotional material from Tamarack. The resort has a number of entities with projects under development and not all are involved in the bankruptcy.
Beyond the $262 million owed to Credit Suisse Cayman Islands (the financial firm has a lien on 24 percent of Tamarack Resort LLC), $4.1 million is owed to a company called Rotorwing of Houston, Texas; $3.2 million to Hopkins Loan Services of nearby Meridian in Idaho; and $2 million to a Mexican lender. The documents also say the resort owes an unspecified amount to the Internal Revenue Service and the State of Idaho.
The resort is now aggressively pursuing additional financing. “Despite the challenges of the current real estate and financial markets, Tamarack is very optimistic it will succeed in finding alternate financing,” Boespflug said. “We are hopeful of finding alternative financing within 60 days.”
To view a PDF of VPG Investment’s bankruptcy file, click here. For Cross Atlantic’s, click here.
The resort, which features skiing, golf, and numerous other activities as well as a wide variety of high-end real estate offerings, opened in 2004 after Afif and Boespflug took over a controversial and long-stalled ski resort project. It billed itself as the first new ski resort to be built in the United States in more than two decades. In 2006 Tamarack released a press statement touting a new financial plan allowing resort managers to borrow up to $250 million from a Credit Suisse fund.
In a prepared statement released Monday, Boespflug said some of the resort’s construction plans have been put on hold due to an “extraordinarily difficult financing environment.” But there was no mention of a bankruptcy filing.
“Tamarack finances our construction with large credit facilities, representing multi-million dollar loans, used to pay the cost of construction needed to deliver projects such as the Village Plaza,” he said in the statement. “Our finance team has been working diligently over the last several months to secure our next credit facility needed to continue our real estate development and construction projects.”
[End of article]Hmmmm....what does this do to their seeking a loan via the Municipal Bond Bank (via the state) and the North Lake ...Sewer District?
Comment By Jeff, 2-20-08Keep it simple stupid...focus on the skiing!!!! Looks like they lost their ass when they tried to make the place all Euro and expensive.
Comment By karen, 2-20-08Great story. Great reporting. Great job. You guys rock.
Comment By bearbait, 2-20-08Is this the Andre Aggasi tennis money at work??? Or is that another mega resort in Idaho?
Comment By Sisyphus, 2-20-08bearbait, Agassi is just a name to sell condos. I don't think he has much money in the project, if any. Its always been a house of cards that now seems to be coming to its inevitable conclusion. The banking crisis just hastened it. Many of the state's political leaders seem to be personally tied into its success and it'll be interesting how much more of the state's resources they are going to give to this "enterprise" in an effort to prop it up.
I sat down with a developer buddy of mine who would have none of the hype. We crunched some numbers over a beer and he convinced me rather pursuasively that it can't work. It just doesn't have the population base to keep the attendant businesses afloat.
Jeff-Tamarack is a real estate company, skiing is a sideline. $50 lift tickets don' t pay the bills.
Sis- I agree the banking crisis just caused the domino to fall sooner. Maybe another Kimberland Meadows.
Poor guys must not have the right Hedge Fund pals with gobs of money to re-launder. U.S. and international gangsters have been known to "invest" a few bucks in recreational real estate. Oh, I forgot, that only happens in other countries.
Comment By Annie, 3-02-08credit suisse might stir up Swiss tourists, but the area is not internationally astoundingly beautiful. Sad to say the population in Donelly / Cascade is not going to attract knowledgeable staff. While the condos were overpriced, surrounding cabins went from 80k to 400k overnight. I'm sure locals who forked over that money will have to sit tight for decades to ever see a return.
Comment By The Real Story, 3-08-08http://www.revistafortuna.com.mx/opciones/archivo/2007/noviembre/htm/Grupo_Miguel_Bribiesca.htm
Comment By More of the real story, 3-08-08 Comment By bearbait, 3-08-08Wow! You read the Mexican version of things financial about the principals in Tamarack, and you have to wonder who in Idaho got money under that table for whatever is needed to grease the skids of big time construction. Nowhere did I see Halliburton, but they have to be in there somewhere. Right? and Bush. See what happens where you go international? Sub prime loans and rogue traders ruined a perfectly wonderful money laundering scheme. Dang nab it! What we need is a ONE WORLD GOVERNMENT to protect us from this kind of fraud. wink wink
Comment By Response to BearBait, 3-08-08Nice one, bearbait. Tamarack has long time connections to Dirk Kempthorne, former governor of idaho. under kempthorne, tamarack was given forest land, enormous tax breaks and future promises of tax exclusion from the state tax base. this all traces back to kempthorne, who is now in charge of the department of the interior. all that has to happen now is for this story to go public and environmentalists will win a huge victory in the west for better resource management...and idaho people will finally vote the crooks out of boise.
Comment By Butch Otter Loves Corruption, 3-08-08http://gov.idaho.gov/mediacenter/proc/proc07/procapr/proc_alfredomiguelafif.html
Comment By Idaho State Board of Land Commissioners, 3-08-08There is growing concern amongst the media covering the Tamarack Resort bankruptcy that the Idaho State Board of Land Commissioners acted illegally in granting Alfredo Miguel Afif the right to lease state land when he was a wanted felon in the country of Mexico.
Here is the link in Spanish to prove that: http://www.revistafortuna.com.mx/opciones/archivo/2007/noviembre/htm/Grupo_Miguel_Bribiesca.htm
Wanted by Interpol in 2004 for tax evasion, money laundering and fraud, the media is now concerned that the Board of Land Commissioners knew that Afif was funneling laundered money into the Tamarack Resort Project.
We are also concerned that Butch Otter spoke incorrectly when he proclaimed April 27, 2007 Alfredo Miguel Afif Day in Idaho:
http://gov.idaho.gov/mediacenter/proc/proc07/procapr/proc_alfredomiguelafif.html
Since the State Board of Land Commissioners serves the public first, I would like to know why the head of that board lacked sufficient information about one of Tamarack's co-owners when he made that proclamation last year.
I would also like access to all records pertaining to the Tamarack Resort involvement with the State Board of Land Commissioners from 2001 to the present.
Where can I have access to those documents?
Thank you.
I predicted this right after I worked in construction the first year of this resort, What an unorganized mess and waste of money, this resort could have been built three times over with the amount of money they wasted. Jean Pierre Van hose probably has a few mill stashed somewhere too. What a rip off artist, keep the taters in idaho and the french frys in france. But I do love skiing there, no lift lines, Some one will pick it up dirt cheap and make millions, But not with JP involved. See Ya french Fry!! I know Larry will miss ya, But hey we can live without ya.
Comment By cmp, 7-03-08what will this do to mccall? Ive been thinking of moving from colorado to mccall cuz its just so much more "real"... maybe I should wait for the s**t to hit the fan first.
Comment By Jeff Huffman, 11-10-08By Jeff, 2-20-08 Keep it simple stupid...focus on the skiing!!!! Looks like they lost their ass when they tried to make the place all Euro and expensive.
The only problem, Jeff, is most big ski areas can't pay their way simply selling lift tickets and mostly crappy, over-priced food. Selling real estate and offering year-around recreation is what allows big areas to be.
By cmp, 7-03-08 what will this do to mccall? Ive been thinking of moving from colorado to mccall cuz its just so much more "real"... maybe I should wait for the s**t to hit the fan first.
Go now. You should be able to pick up some cheap real estate.
maybe if tamarack did not spend so much money in building hotels and other stupid stuff like that. They should have waited and built another hotel when they had a lot of business. When i went there, it wasnt as packed as i imagined it to be. they already have one hotel and they were building another. in my opinion they should have been making a bigger parking lot and working on the road. So they should be able to stay open and take out the stuff like they dont need like that second hotel. But that is just my opinion.
Comment By Fred Patton, 12-08-08I would like to know who to contact to get the information required to purchase Tamarack Resort. I can be reached at 208-871-3951 or by email. Best Wishes!
Cordially,
Fredrick J. Patton
Governor "Butch" had to do a little research before naming Alfredo Miguel ( the investor ) Day in Idaho. Don´t they know that Mr. Miguel has been running from the Mexican Law for the past 6 years. He has stolen a lot of government money in Mexico ( Frauds and avoiding taxes ). Now Tamarack is closed and Mr. Miguel ows 270 million t Credit Suisse, Bank of America and others.. Idaho´s Governor made a big mistake when he backed this investor. Now lets hoe is he going to pay the banks, if he follows his long habits he will never pay and decide to fight it with a bunch of high paid lawyers.
Comment By RichVacay, 11-27-09Hey does someone here know about credit fixing?
I'm a new member here so just want to say hello to the bloggers.
I hope I made this post in the right section.
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