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Mystic Miner Mountain Resort near Lead is up for sheriff's sale today after owners failed to pay $3.7 million in mortgages on the property. 

LEAD | Mystic Miner Mountain Resort, a winter recreation area 5 miles south of this historic mining community, will be sold on the steps of the Lawrence County Courthouse this morning after its owners reportedly failed to pay $3.7 million in mortgages on the property.

That concerns some 100 homeowners who have residences in neighboring Deer Mountain developments that are served by a private water system located on tracts set for the sheriff’s sale, slated for 10 a.m.

The sale comes in the wake of a July 18 default judgment in Fourth Judicial Circuit Court in Deadwood which stated the defendant, Union Resort LLC, had failed to respond or file a responsive pleading to creditor’s efforts to satisfy the resort’s debt. In his order, Judge Eric Strawn declared the company in default on its loans and awarded the plaintiff $74,500 in principal, $27,458 in interest, and $8,763 in legal fees, sales tax and costs, for a total judgment of $110,722, plus post-judgment interest at a legal rate, court records revealed.

Then on Aug. 2, Strawn issued a judgment and decree of foreclosure against the same defendants, noting none of them had filed an answer to the plaintiff’s motion for summary judgment. Strawn awarded Victory Land, the creditors, $2.2 million in first and second mortgages, $1.1 million in interest, as well as additional interest and attorneys’ fees for a total of $3,738,594.

Furthermore, Strawn ruled that the plaintiff was entitled to immediate possession of collateral described in security agreements and said Victory Land would be allowed to sell the property to meet the obligations of the debtors, leading to today’s sheriff’s sale.

Court records show the defendants listed as Union Resort LLC, Kevin Klapprodt, Mark and Margaret Brockman, Core of Apple LLC, Mark and Margaret Vanderwerff, Steve and Nancy Vander Pol, and Richard and Susan Raposa. However, attorneys familiar with the case say some of those defendants had liens on the property from previous investments.

According to published reports, Union Resort LLC and four Black Hills area businessmen purchased the property in 2008 and renamed it Mystic Miner at Deer Mountain with the intention of developing it into a year-round resort.

In addition to its ski area with 850 feet of vertical runs, the resort with a 6,850-foot summit features a Zero Gravity Tube Park and 1,000-foot tube tow lift popular with locals and out-of-town winter enthusiasts.

Calls to Mystic Miner on Wednesday were greeted with a message noting the resort was closed for the season and urging callers to leave a voicemail. However, the voice mailbox was full. Its website snow report noted it was last updated in February.

Notice of today’s sheriff’s sale of the property, first published in newspapers in early September, caused great concern among the neighboring Deer Mountain residential development, according to one homeowner contacted by the Journal.

“We have been hearing rumors for months, but we did not hear anything officially before it was published in newspaper,” said Shari Kosel, who with her husband, Joe, has been a permanent resident of Deer Mountain since 2002. “In a matter of three weeks, we’ve been scrambling, getting documents, and trying to understand the situation and how it impacts Deer Mountain residents.”

Kosel said residents, the majority of whom only live part time in the developments, were primarily concerned with the private water system that serves the resort as well as their homes. Most of the mechanical systems involved with delivering water to residences are located on tracts slated to be sold in the court-ordered sale today, she said.

“Our water company is a private entity, so if someone buys it, they can do whatever they want with it,” Kosel said. “Our concern is being without water. We need our water, a vital component to living. We can’t have 100 homes individually drilling our own wells at this point.”

Although residents had formed a road district to maintain thoroughfares in the developments, Kosel said they were now considering forming a sanitation district to take over the water system if necessary.

“My hopes are we could form a sanitary district, purchase it from the new investment concerns, and take legal matters into consideration to at least put a stay and maintain our water system until all legal matters and issues are resolved with the sale,” she said.

And it appears those residents will have some time to get that done. Attorneys familiar with the case who asked not to be named said the sheriff’s sale would automatically trigger a one-year redemption period in which Mystic Miner owners would have the opportunity to satisfy the court judgments against them and meet their financial obligation to creditors.

When informed of that fact Tuesday, Kosel said she was relieved.

“That makes us feel great,” she said. “It makes me feel reassured that we will have the time to go forward with planning a sanitary district and required election and voting to establish that, and to address the Lawrence County Commission with our request to establish a sanitary district.”

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