Three years after opening, a hotel/hostel in Summit County has been foreclosed on.
“The most difficult part of this journey is knowing that things could have turned out so differently,” said Lynne and Rob Baer, former owners of The Pad in Silverthorne.
Built in part from shipping containers, the building at 491 Rainbow Drive has won awards and praise from travel outlets. But it has struggled to emerge from under the large and untraditional loans that funded its 20 months of pandemic-era construction in 2020 and 2021.
“Because the nature of our business was so unique, we had no choice but to rely on an expensive hard-money lender, leaving us little flexibility for the unexpected,” the Baers said in an email to BusinessDen on Monday, “and COVID was the definition of that.”
In August 2023, The Pad was sued by BRMK Lending, of Seattle, which had loaned it $12.9 million and not been repaid. A receiver was appointed to run the hotel as a result.
Two months later, The Pad filed for Chapter 11 bankruptcy and the Baers regained control of it. They fended off foreclosures as they went in search of a financier or a buyer. They thought they found the latter in Blue Rhino Investments and its owner, Stephen Caragol of Steamboat Springs.
“We found a group that offered what they believed was a fair market price for a property going through bankruptcy. Selling it was heartbreaking, but we were grateful for the chance to possibly stay on as operators,” recalled the Baers, who Blue Rhino hired.
But BRMK and other creditors objected to the sale for $10.1 million, well below the property’s appraised value and well below what The Pad owed lenders. In the face of those objections, the Baers dropped their attempt to sell and BRMK foreclosed on The Pad last week.
The property was $21 million in debt at the time of sale, according to Summit County records. BRMK’s credit bid of $12.88 million was the only one received.
“This business was our dream, and we poured everything we had into making it a reality,” its now-former owners said. The married couple came up with the idea in 2015. “From the start, it was embraced by the community and travelers alike, which meant the world to us.”
“Running a small, independently owned business in a world dominated by larger players hasn’t been easy,” they added. “We faced financial challenges that, despite our best efforts, ultimately proved insurmountable. Yet, we wouldn’t trade this experience for anything.”
The Pad will host a farewell party at the hotel’s bar on Wednesday night, beginning at 7 p.m.
“This is not the end,” Lynne Baer said in a press release announcing that. “The Pad is more than a place; it’s a spirit, a mindset, and a movement. We don’t know what the next chapter holds, but the connections we’ve built and the impact we’ve made will carry on.”
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