All construction on the gondola system and Idaho Springs' Virginia Canyon Mountain Park is on hold while Mighty Argo Cable Car LLC sorts out its financial situation.
The company recently filed a civil lawsuit against its debt funder, a title company and the title company's owner over alleged breach of contract and failure to return $4.5 million the Mighty Argo had in escrow.
According to co-owner Mary Jane Loevlie, Dallas-based TriVecta Capital Group was supposed to provide $32 million in debt funding in January and didn't. So, in February, the Mighty Argo sent Virginia-based First Title a demand letter to get back its $4.5 million in escrow and didn't receive it.
The company then filed a lawsuit against TriVecta, First Title and First Title owner Sandra Bacon in U.S. District Court on April 19.
TriVecta didn't respond to the Courant's request for comment, and an attorney for First Title and Bacon has told BusinessDen that his clients deny the claims.
Because of these complications, the Mighty Argo paused gondola construction and all other expenses in February, Loevlie explained, including a $400,000 advance on ticket sales to the city for VCMP construction.
The park is a separate but complementary project from the gondola, and city officials clarified that trailbuilding can't proceed without that financial backing to match grant funds.
Loevlie emphasized that the gondola system is still going forward once financing is reestablished. However, she's unsure when that will be.
“It could be tomorrow; it could be two months from now,” Loevlie said Friday. “(The community's) main concern was that it might kill the project. It won't.
"It's a setback,” she said.
Loevlie added that the $400,000 advance to the city is a high priority and will go through once finances are secured.
Idaho Springs had planned to start VCMP trail construction this spring, with City Administrator Andy Marsh saying, “We were hoping to be underway right now and so were (the Argo team).”
However, once the city receives the advance, all staff has to do is send out a Request for Proposal for trailbuilding, look over the bids and have City Council approve a contractor. That process should take about six weeks, he estimated, and VCMP's trailbuilding can start almost any time of year thanks to its southern exposure.
Marsh said the city has about two years to use the $100,000 Great Outdoors Colorado grant and the $250,000 Colorado Parks & Wildlife grant, explaining that the advance from the Argo will go toward matching both along with the city's in-kind services.
Ultimately, Marsh was confident that the project would go through and the money would be spent in time.
Loevlie was likewise positive, stating, “(The gondola) will be open at this time next year, easy.”
Then and now
The Mighty Argo's gondola project, which has been in the works for two-and-half years, involves a lower landing at the Argo Gold Mill, an upper landing called Miners Point with several amenities, and expanded parking at the mill site, Loevlie explained.
The project has already received all the necessary permits and approval, and work on Miners Point started this fall, she continued.
Simultaneously, Loevlie, her fellow co-owners and their friends and family had raised $6.4 million and put $4.5 million of it into escrow to leverage debt financing with TriVecta. Loevlie clarified that this is a typical way of financing a business.
The company was due to receive its $32 million from TriVecta, but the date kept getting pushed back, she commented. The Jan. 20 closure didn't go through, and the Mighty Argo claimed TriVecta and First Title were in breach of contract and filed the lawsuit last month.
Loevlie said she and her colleagues are exploring every avenue possible to find the necessary backing while the lawsuit goes forward.
In the meantime, the Argo team is also working on a few smaller projects at the gold mill, which is a separate but related company. Loevlie said the fence around the main yard will be taken down by Memorial Day weekend, and she hopes it will make the area feel more open to the community.
Overall, Loevlie said she appreciates all the local support she and her colleagues have received recently, and she's very proud of the Argo team and its partners for weathering the proverbial storm.
“We wish we could be under construction right now,” she said. “ … It's a setback, but as (Mighty Argo co-owner) Dana Crawford says: `It'll be a good chapter in the book one day, when we're through it.'”