Troubled student-housing complex ordered into receivership

GREELEY — University Flats, a 262-bed student-housing complex at 1758 Sixth Ave., has been ordered by a Weld County District Court judge into receivership after lawsuits against the property owner that alleged loan defaults and mechanics liens. 

In an order dated Oct. 24, Judge Shannon Lyons ordered that Nelson Partners LLC, the owners of the property through the affiliate Greeley Land LLC, turn the complex over to a receiver “to protect the value of the Real Property and to market and sell the Real Property to satisfy the claims of creditors with respect to the Real Property.”

San Clemente, Calif.-based Nelson is facing a lawsuit from Pathfinder Crismon LLC, an affiliate of real estate investment and financing firm RRS & Co, alleging that Nelson has defaulted on two loans: an $8.6 million construction loan agreement from January 2020, and a $3 million loan from September 2021. 

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According to the complaint filed by Tempe, Ariz.-based RRS on Oct. 20, Nelson has not made any payments to the principal of either loan. Including interest and fees, Nelson now owes RRS $10.4 million for the January 2020 loan and $3.44 million for the September 2021 loan, the complaint alleges.

Nelson also faces mechanics liens totaling $338,624.66 from companies including HVAC companies Poudre Valley Air Inc. and Pride Mechanical Inc.; flooring companies MRK Industrial Solutions LLC and Creative Design Flooring Inc.; and kitchen equipment supplier Specialty Appliance. 

In her order, Lyons wrote that while University Flats is about 90% leased, Nelson had failed to make payments to any of its creditors for the property.

“The Real Property, its revenues, income, issues, and profits are in danger of being materially injured, impaired, reduced in value, or lost, and the appointment of a receiver is reasonable and necessary for the protection of the assets and the rights of the parties in this case,” according to the order.

Lyons appointed Randel Lewis, principal at the Denver consulting firm Foundation Ltd., as the receiver.

RRS has also initiated public trustee foreclosure proceedings with a scheduled foreclosure sale date of Dec. 14.

Nelson purchased University Flats, which opened in 2014, for $21.3 million in 2018. Since then, it has been beset with problems. In September 2021, students reported issues including stagnant water and algae in the complex’s swimming pool, overflowing trash bins and spotty WiFi. At one point, water to the complex was shut off because Nelson failed to pay its utility bill. 

Between September 2021 and March 2022, Nelson was cited six times by Greeley code compliance for the sanitation issues and three times by the Greeley Fire Department for improper signage, stairwell doors, and fire sprinklers and alarm monitoring.

RRS is represented by Matthew Rork, Daniel Garfield and Jason Robinson of the Denver firm Fairfield and Woods PC. Nelson does not have an attorney listed for the case. Attorneys for RRS and representatives for Nelson could not be reached for comment.

The case is Pathfinder v. Greeley Land. The case number is 22CV30788.