Taken for a ride? Developers of Idaho Springs gondola sue over missing $4.5M. – The Denver Post
A company looking to build a gondola in Idaho Springs says a lender on the project has failed to deliver — and $4.5 million is currently missing.
Mighty Argo Cable Car LLC filed a lawsuit in federal court last week against Dallas-based Trivecta Capital Group, along with Virginia-based First Title Inc. and that company’s owner Sandra Bacon. It accuses both companies of breach of contract, and First Title of fraudulent concealment, among other claims.
An attorney for First Title and Bacon told BusinessDen Friday that his clients deny the claims. Trivecta did not respond to a voicemail and email requesting comment.
The lawsuit revolves around the planned Mighty Argo Cable Car project, which would carry hikers and tourists from the historic Argo Mill and Tunnel in Idaho Springs, which was last used for commercial mining operations in the 1940s and now offers tours.
The gondola would climb 1,300 vertical feet to a network of trails on the mountainside above it, where there would also be viewing decks and event space, according to the mill’s website. It would operate year-round.
The mill was purchased in 2016 by a group including Mary Jane Loevlie, co-founder of Idaho Springs-based mining products supplier Shotcrete Technologies, and Dana Crawford, the Denver developer responsible for the preservation of Larimer Square.
The gondola is intended to be the first phase of a redevelopment project that would ultimately include a hotel and other buildings.
The entity that filed the lawsuit is led by Loevlie and Bryan McFarland, founder of Evergreen-based Denali Development Group. There are 55 members of Mighty Argo Cable Car LLC, according to court documents, and some of those members are LLCs that are made up of multiple individuals.
McFarland told BusinessDen that plans for the gondola continue to move forward.
“It’s just a delay in the project,” he said. “The project remains as viable as ever.”
According to the lawsuit, Mighty Argo and Trivecta entered into negotiations over financing to construct the gondola in 2020. McFarland said the group initially identified a different lender to work with, but “as the impact of COVID continued to magnify, they just weren’t able to get traction.”
The lawsuit claims that Trivecta owner Jay Matthiesen represented that, if Mighty Argo could raise $4.5 million, his firm could raise and loan an additional $32.4 million to complete the project.
Mighty Argo subsequently deposited its $4.5 million into an escrow account controlled by First Title, but Trivecta failed to deposit its portion of the funds, the lawsuit claims.
In February, Mighty Argo sent a letter to Bacon, First Title’s owner, demanding that the entity be given back its $4.5 million, the lawsuit claims. Matthiesen also signed that letter, but the money hasn’t been returned. Mighty Argo says Bacon appears to have transferred it into another account she controls.
“Upon information and belief, First Title and/or Trivecta engaged in fraudulent conduct with respect to the escrowed funds,” the lawsuit reads.
The lawsuit also states that, in January 2021, a Trivecta entity entered into a construction loan agreement with a Trivecta affiliate, but that entity has also failed to come up with the agreed-upon funds.
The total expected cost of the gondola is $40.24 million, according to a budget included with the lawsuit.
McFarland said he’s hopeful that the gondola will be under construction later this year, and be completed in 2022.
“We’re talking with a few different lenders right now,” he said.
Attorney Anthony Leffert of Robinson Waters & O’Dorisio is representing Mighty Argo in the litigation. Derek Deyon of The Deyon Law Group in Texas disputed the claims on behalf of First Title and Bacon.
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