The undeveloped lots at 1464-1484 Winona Court in Denver in March 2024, with Flywheel Capital’s Circa West project in the background. (Matt Geiger/BusinessDen)
A pair of development sites flanking a West Colfax condominium building have landed in foreclosure for the second time in roughly six months.
Arizona-based Capital Fund 1 submitted paperwork last week to force a sale of 4560 W. Colfax Ave. and nearby 1464-1484 Winona Court lots in Denver, all of which are owned by Denver-based real estate firm Flywheel Capital.
Capital Fund 1 had previously done so in late March, although that case was closed weeks later.
Both filings stated that Flywheel’s Golden Manor Vacant LLC still owes all $4.6 million in principal on an 11-percent-interest loan taken out in December 2021. The loan was supposed to be fully paid off in about a year.
Ben Hrouda is the founder of Flywheel Capital.
Flywheel founder and managing partner Ben Hrouda told BusinessDen that he’s in negotiations with the lender and expects the matter to close again soon.
“This project had been on a pause over the last six to eight months and during that time we did fall behind on various amounts,” Hrouda said in a prepared statement. “However, we are in a position to move forward with the development at this site and have brought payments up to date. We have been working collaboratively with our current lender as we move forward on the development and expect the foreclosure to be lifted within the next week.”
Flywheel purchased the lots — which are about 1.1 acres combined — for a combined $2.4 million in 2017, at the same time he bought the four-story building between them, records show. He converted the building, which had been an assisted living facility called Golden Manor, into a condo complex dubbed Circa West.
The 4560 W. Colfax parcel, east of Circa West, is a parking lot. The two adjacent parcels along Winona to the west are vacant land. Hrouda wants to construct a five-story apartment building on each of the lots, public records show.
Capital Fund’s loan isn’t the only unpaid bill associated with the properties. Several liens have been filed in recent months. Greenwood Village-based architecture and engineering Galloway Co. Inc. said it hadn’t been paid about $26,000 for work there, and Denver’s Department of Transportation Infrastructure and Parks and Recreation department both dinged the property for unpaid taxes.
BusinessDen reached out to Hrouda about the foreclosure filing on Tuesday. A spokeswoman for Hrouda later provided an email showing that Hrouda made arrangements Wednesday morning to pay off Galloway’s bill. She also provided receipts showing Hrouda paid the tax bills on Thursday morning.
A dispute between Hrouda and former Flywheel co-owner Adam Hazlett went to trial in January.
A judge ruled last month that Hrouda stole $218,000 from Hazlett, but also ordered Hazlett to pay $48,378 after interest for failing to pay back funds he borrowed from the company. The judge ordered the pair to restart an appraisal process to determine the value of Flywheel so that Hrouda can buy out Hazlett’s stake.
The undeveloped lots at 1464-1484 Winona Court in Denver in March 2024, with Flywheel Capital’s Circa West project in the background. (Matt Geiger/BusinessDen)
A pair of development sites flanking a West Colfax condominium building have landed in foreclosure for the second time in roughly six months.
Arizona-based Capital Fund 1 submitted paperwork last week to force a sale of 4560 W. Colfax Ave. and nearby 1464-1484 Winona Court lots in Denver, all of which are owned by Denver-based real estate firm Flywheel Capital.
Capital Fund 1 had previously done so in late March, although that case was closed weeks later.
Both filings stated that Flywheel’s Golden Manor Vacant LLC still owes all $4.6 million in principal on an 11-percent-interest loan taken out in December 2021. The loan was supposed to be fully paid off in about a year.
Ben Hrouda is the founder of Flywheel Capital.
Flywheel founder and managing partner Ben Hrouda told BusinessDen that he’s in negotiations with the lender and expects the matter to close again soon.
“This project had been on a pause over the last six to eight months and during that time we did fall behind on various amounts,” Hrouda said in a prepared statement. “However, we are in a position to move forward with the development at this site and have brought payments up to date. We have been working collaboratively with our current lender as we move forward on the development and expect the foreclosure to be lifted within the next week.”
Flywheel purchased the lots — which are about 1.1 acres combined — for a combined $2.4 million in 2017, at the same time he bought the four-story building between them, records show. He converted the building, which had been an assisted living facility called Golden Manor, into a condo complex dubbed Circa West.
The 4560 W. Colfax parcel, east of Circa West, is a parking lot. The two adjacent parcels along Winona to the west are vacant land. Hrouda wants to construct a five-story apartment building on each of the lots, public records show.
Capital Fund’s loan isn’t the only unpaid bill associated with the properties. Several liens have been filed in recent months. Greenwood Village-based architecture and engineering Galloway Co. Inc. said it hadn’t been paid about $26,000 for work there, and Denver’s Department of Transportation Infrastructure and Parks and Recreation department both dinged the property for unpaid taxes.
BusinessDen reached out to Hrouda about the foreclosure filing on Tuesday. A spokeswoman for Hrouda later provided an email showing that Hrouda made arrangements Wednesday morning to pay off Galloway’s bill. She also provided receipts showing Hrouda paid the tax bills on Thursday morning.
A dispute between Hrouda and former Flywheel co-owner Adam Hazlett went to trial in January.
A judge ruled last month that Hrouda stole $218,000 from Hazlett, but also ordered Hazlett to pay $48,378 after interest for failing to pay back funds he borrowed from the company. The judge ordered the pair to restart an appraisal process to determine the value of Flywheel so that Hrouda can buy out Hazlett’s stake.
