Receiver appointed despite its owner’s pushback

Zeppelin Development’s bid to maintain control of a Rino office building has come up short.

Denver District Court Judge J. Eric Elliff on Monday appointed The Stapleton Group as receiver for the Zeppelin Station building at 3501 Wazee St., siding with lender Wells Fargo rather than the development firm.

Lenders have requested a receiver for about 10 sizable Denver-area office buildings since the pandemic. But Denver-based Zeppelin Development was the first to fight such a request in court.

Zeppelin completed the fourstory building, which has a food hall on the ground floor, in 2018.

The company took out a $32 million loan from Wells Fargo the following year. The building houses the headquarters of ski resort operator Alterra.

The San Francisco-based bank said the loan had been in default since June 2021 for failing to maintain the necessary ratios regarding property income to debt spelled out in the loan agreement.

Zeppelin, meanwhile, said the “technical defaults” were due to offering COVID concessions to food hall tenants, and emphasized that the firm had been making its required debt service payments.

The company said Wells Fargo was not thinking about the broader impact on the community.

In making the decision to appoint a receiver, Elliff largely laid out the basics of the situation — that the loan was in default, that Zeppelin had not cured the defaults and that the loan agreement allowed Wells Fargo to get a receiver in such a situation.

While Zeppelin still owns the building, the receiver otherwise has full control of it and is given authorization to collect rent, undertake leasing efforts and even sell the property if that’s what Wells Fargo wants.

In a Tuesday statement to Businessden, Zeppelin said it is appealing the decision and continuing efforts to negotiate with Wells Fargo to avoid a fire sale of the property.

“This would place a highfunctioning, award-winning property, backed by committed local ownership, onto the scrap heap of the distressed office sale market,” Zeppelin said.

“The likely result is that it will turn over to national speculators, with no true community interest, resulting in the immediate closure of the market hall at the cost to tenants and the neighborhood.”

Zeppelin said the surrounding area would suffer if the property were sold.

“Zeppelin Station continues to generate positive activity that is instrumental in counteracting rising levels of vacancy, crime, and homelessness that can be found throughout the downtown area,” the company said.