An apartment complex wraps around the former Tavern Uptown building at 538 E. 17th Ave. in Denver. (Thomas Gounley/BusinessDen)
Put this loan down as a fumble.
Former Denver Broncos quarterback John Elway has initiated the foreclosure process for the 14,000-square-foot former Tavern Uptown building after restaurateur Frank Schultz defaulted on a $5.4 million loan.
Elway, who attended Schultz’s wedding in 2009, filed to foreclose on the vacant structure at 538 E. 17th Ave. in late June, according to public records. The Denver Business Journal first reported the filing.
John Elway speaks to the media in 2018. (RJ Sangosti, The Denver Post)
Schultz used to have a string of local Tavern-branded sports bars, including Tavern Uptown at 17th Avenue and Pearl Street — the first one to open, in 2000. But he closed that location in 2016, not long after he sold the building and lots to the south to Tennessee-based Southern Land Co. for $11.5 million.
Southern Land had planned to build a large apartment complex across the entire site and sell the retail space within it back to Schultz. But after a backlash from preservationists, the company agreed to preserve the structure, instead wrapping the new building around the former Tavern Uptown. The company then sold the corner to a Schultz-linked LLC in May 2021 for $3.6 million, records show.
Schultz told BusinessDen last week that he planned to open a new bar with a rooftop in the middle and lease out the smaller adjacent units to other operators.
In October 2022, records show, Schultz took out a $4.8 million loan against the property from a trust in the name of Elway, who played for the Broncos for his entire 16-year career in the 1980s and ’90s and later joined the team as an executive.
Frank Schultz
“He did me a huge favor. It was just impossible to get loans at a bank,” Schultz said, adding that he and Elway have been friends for about 20 years.
The building was an empty shell, Schultz said, so it needed a couple million dollars in work to house the bar and other tenants. But the loan seemed like it would work out fine, since the property had appraised at $8 million.
Schultz planned to refinance within a year and pay off Elway’s loan. When that didn’t happen, records show, Elway extended the maturity date for an additional 12 months, to October 2024. The loan amount also grew to $5.4 million.
Along the line, it became a tumultuous time for Schultz. He had grown Tavern Hospitality Group with his mother, Terry Papay, and the two had joint stakes in various restaurants and real estate. In March 2023, Schultz’s mother sued him over his use of company funds. He countersued. Instead of opening restaurants, he closed them.
In early 2024, the two sides reached a settlement, which involved putting a dozen properties up for sale, including the Uptown building.
There have been a handful of deals. A couple industrial properties sold quickly. A corner building in LoHi, which had also been in foreclosure, found a buyer in January. Some things didn’t pan out, notably the potential conversion of the onetime Tavern DTC into a Cherry Cricket.
The Uptown building, however, hasn’t attracted much interest. Schultz said he listed it for just under $4 million.
“Haven’t even had an offer at $3 million,” he said.
The foreclosure filing from Elway wasn’t unexpected, Schultz said. The pair had talked about doing a deed-in-lieu — in which a property is given to a lender without going through the official foreclosure process — before deciding on a “friendly foreclosure.” The property will go to auction and, barring some unexpected twist, Elway will be the only bidder and take ownership of the property.
“It’s not ideal for me and him, but he’s been a great friend,” Schultz said. “He’s still a good friend though all this.”
Schultz called Elway “a very number-driven, super-smart business guy.”
“He knows I’m going to get him whole and need a little bit more time. … I’ll feel a lot better the day he’s completely paid back,” he said.
While he’s surrendering real estate in Uptown, Schultz is simultaneously rebounding as a restaurateur. Amid the litigation, he paired down to one bar: Chopper’s in Cherry Creek. But he reopened Whiskey Tango Foxtrot in the Union Station North neighborhood in the spring, and is targeting an August relaunch for Otra Vez Cantina along the 16th Street Mall.
