The lender of a $43 million loan to enable Bishop’s Lodge owner Richard Holland to reconstruct it as a 100-room ultraluxury resort filed a complaint late last week in the state’s First Judicial District Court seeking to foreclose on the property a few miles northeast of Santa Fe.
Holland — whose company is listed as BL Santa Fe LLC in the complaint — said the complaint is procedural. It will soon be resolved, he added, and won’t affect the resort’s summer operation plans.
“This does not impact the opening,” Holland said. “We’re in the process of paying that loan off.”
Holland said he has made payments on the June 2019 loan from Fortress Credit Co. LLC, which assigned the loan to DB Bishops Lodge LLC, the party that filed the complaint.
“What you’re missing is there is not going to be a foreclosure because we’re going to pay them off,” Holland said. “Unfortunately, problems with lenders like this are common in the commercial real estate markets during this pandemic, and we could not avoid this problem. But given that the property is worth much more than its debt, we will be able to solve this in short order.”
The legal document states $40.8 million will be due June 13. Holland said he will pay back the amount due by that date.
The Bishop’s Lodge resort, with rooms generally priced above $1,000 and $2,000 a night, is scheduled to open July 1. Holland acquired the property in 2014 and started construction on the $70 million-plus project in July 2019.
A letter dated April 7 from DB Bishops Lodge LLC to Holland states the “existence of a shortfall, carry shortfall and/or interest shortfall in an aggregate amount of not less than $9 million.”
Holland said this case revolves around the lender demanding he supply an unspecified amount of additional money to finish the resort project. He has supplied some but not all of that money, he said.
“That’s what started all this,” Holland said. “It’s much more complex. It’s not meaningful to anyone. We are in default under the loan terms. It is not a payment default. It is a technical default.”
Holland believes the legal complaint is procedural.
“The lender must follow their loan documents to keep the documents in force,” he said. “So that is why they are now posting their foreclosure notice, to follow what their loan documents require.”
Avraham Dreyfuss, chief financial officer at DB Bishops Lodge LLC, was not immediately available for comment.
The complaint by DB Bishops Lodge LLC asks the court for a monetary judgment of $40.8 million; foreclosure on the Bishop’s Lodge property; “barring and forever foreclosing [Holland] from all rights, interests and claims in and to the collateral”; and appointment of a receiver.
Holland characterized the complaint as “rumors.”