LoDo’s Nativ Hotel will be auctioned next month and its main creditor wants nothing less than $7.9 million, according to court records.
That might be tough, since the 16,800-square-foot hotel and nightclub at 1612 Wazee St. in LoDo went on the market last year for a lower price of $7 million.
An online auction for the four-story, 18-bedroom property is set to begin June 6 through Ten-X Commercial and close two days later, according to reports on LoopNet. Bidders must qualify in advance.
The auction is the result of the Chapter 11 bankruptcy filing last September 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 up a national and international market for us. You know there are 10 guys in Denver who will want property because they understand what it is, but hometown guys aren’t going to pay what you want out of property.
KDA Properties said in its September filing that it owed $9.6 million to four creditors. Most of the money, $8 million, was owed to Chicago-based Pangea Mortgage Capital. Pangea started the process of foreclosure of the hotel building in December 2020.
Suliaman owns 49% of KDA Properties. Kenneth Ware, listing a Centennial address, owns the remaining 51%. Ware is also the entity’s second-largest creditor, which owed $1.2 million for the “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 this auction must generate a minimum bid of $7.9 million, and $7.2 million from this sale will go to Pangea.
If not, the court will dismiss the bankruptcy case and Pangea may pursue the foreclosure sale, according to filings.
“In such event, Pangea shall be free to immediately proceed with its Public Trustee Foreclosure Sale of the Property, the UCC Sale of the Personal Property, and to pursue any other legal and equitable remedy to collect all amounts due against the debtor, Nativ Hotel, LLC, Amin Suliaman, Kenneth C. Ware and any other security securing the debt due to Pangea,” according to the stipulation.
KDA Properties is also responsible for paying overdue property taxes, auctioneer transaction fees, brokers commission of 3% of the gross purchase price and other fees, according to the filing.
KDA Properties bought Nativ Hotel and its real estate for $6 million in 2018 after the previous owners pulled out, Suliaman told BusinessDen at the time.
Hotel operations have been halted since the pandemic began, but Suliaman said he recently let a local club promotion company hold events at the property. He was the one Suliaman said was responsible 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 that,” Suliaman said. “I’m upset that my customers and employees are losing something magical, but a building is a building.”
This story was reported by our partner BusinessDen.