This morning's Standard-Examiner has the latest update on the Midtown Village at The Junction hotel/waterpark project, which Orem developer Larry Myler has now reportedly put on "temporary" hold, due to currently unfavorable conditions in the financial and real estate markets, which essentially means the developer has run out of money. From Ace Reporter Schwebke's story, buried on the Business Page at the back of today's newspaper:
OGDEN — It may be several months before Midtown Development presents a formal proposal to the city’s Redevelopment Agency for a possible $115 million downtown hotel and waterpark, Mayor Matthew Godfrey said Monday.And here we'd believed all along the main problem was those 275 missing parking spaces for which Dave Harmer has been searching during these past few weeks. Oh my.
A downturn in the national economy is making it more difficult for projects like the proposed Midtown Village at The Junction development to obtain financing, Godfrey said.
“It’s made them (lenders) very conservative,” he said.
As a result, it could be months until economic conditions improve, allowing the Midtown Village project to move forward, Godfrey said.
And there's more. At the foot of the article the Std-Ex's Ace Reporter ever-so-gently gently mentions another Larry Myler project which has been likewise put on hold, this one apparently in mid-construction:
A slump in the economy has also temporarily halted construction on a $100 million luxury condominium project that Midtown Development is building in Orem, said Midtown President Larry Myler.The Deseret News also had a story on Myler's Orem project in yesterday's edition, from which we glean a sampling of the several interesting reader remarks from the comments section beneath the D-News article:
Several subcontractors have filed liens against the property to receive payment.
Myler said Monday he is hopeful that work will resume on the project within the next several months. [Emphasis added]
Concerned Citizen: Does anybody remember that the CITY paid for the parking garage to be built? Does anyone remember that the developer got that for FREE? Now we pay the bond with taxes so the developer can continue to build a building that doesn't make economic sense, because he has connections at OREM City. Who is going to organize a movement to hold them accountable?So many questions... so few answers.
Orem is not Alone!!!: This is the same developer that wants to build the same project in Clearfield, and the same builder that wants to build the 14 story hotel in downtown Ogden. Can you imagine the people of Ogden having a 14 story downtown hotel stop construction half way through the process. It will be Ogden City mall all over again. Good luck Clearfield and Ogden, Mylers coming North.
Another Orem Resident: The big question is? Who on the city council approved this disaster - and WHY?
And is it just us, or are there others among our readership who think the Emerald City taxpayers may have inadvertently dodged a bullet in re this project?
29 comments:
Rudi:
Can't help but wonder if the financial problems of the developer are the real reason the Development Agreement for the Ogden project was pulled from the agenda of the Ogden RDA Board 72 hours before it was slated for a vote, and expected to be approved. The reason the crack Godfrey Development Team gave, through Mr. Harmer, at the time, was that somehow 275 city-owned parking places due to be leased to the development company for hotel use had been... well, misplaced.
Not even I believe that the Godfrey administration could misplace 275 parking spaces, and I wondered at the time what the hell was really going on. Given the story Ogden Resident tumbled to on KSL radio, I wonder if the real reason the development agreement was pulled from the agenda was that the problems of the developer came to light. And the lost parking place story was cobbled together to cover the real reason: that the city was about to guarantee millions in subsidies, and interest free loans not to be repaid until the project was completed, to developers who were in so much trouble in another similar Utah project that they suspended construction. That makes a lot more sense to me than the sudden disappearance of 275 parking places. If that's so, then our new Council members are getting... I hope... a crash course in the reliability --- politely so called --- of the Godfrey team.
Curiouser and curiouser....
I’m not suggesting that the developer is in financial trouble though you have to wonder considering it’s limited existence in these types of developments but that the project was ill conceived in like of the state of the economy. Not only is it important that any major project be scrutinized with a financial feasibility and demographic study of the project before any financial commitment is made but also timing within economic cycles needs to be considered. This is the reason that the City Council needs to perform a study prior to any financial commitment by the city.
As for the land sale, I think the sale has gone through as the Council apparently does not feel that they have the right (which I disagree with) to stop the mayor from selling property.
And as for the 275 parking stalls, the developer may very well have used that retraction within the offer by the city as an excuse to politely bow out of their commitment to the development in Ogden, particularly considering their potential over exposure in Orem. Over riding all this though is the fact that this whole project should be viewed as a private development that offers, at best, suspect accretive value to the city and that if ever developed, does not warrant any type of city subsidy.
The City Council clearly needs to set up (for their own protection if not for the residents), or needs to convert current guidelines into enforceable ordinances that will outline the required process steps by which the city follows in determining how the city approves any project that seeks financial support of the city. Current process guide lines are not bad but they do need to be updated and they do need to be converted into ordinances.
Og Resident:
You wrote: I’m not suggesting that the developer is in financial trouble though you have to wonder considering it’s limited existence in these types of developments.... You can stop wondering. Seems he is definitely in financial trouble, according to the DN story Rudi linked above. He apparently stopped paying his bills to subcontractors in Orem a month and a half ago. The KSL report may not have included that item, but the DN article does. My guess would be, deep trouble....
The bankers are finally paying attention to the financial strenght of the developer and viability of the project, but lying little matty and his crack development team continue to see gondolas through rose colored glasses.
The Orem project was a purely speculative undertaking, and sadly there seems to be no interest. Only 5 of the units were sold. Contractors have stopped working for lack of payment and placed liens on the property. The gondola hotel is beyond speculation, it's a pipe dream, I wonder if Myler was playing lying little matty for a way out of his financial distress with intentions of using Ogden's money to save his Orem deal. Just like a muni ponsi scheme.
And speaking of speculation, is there ant data that would indicate that Ogden needs or could even support another hotel? We know the beyond speculation gondola needs it, but there's no reason whatsoever to throw tax dollars onto a craps table and pray for seven.
Rudi:
I was intrigued by Hizzonah's spin on all this, reported by Mr. Schwebke:
OGDEN — It may be several months before Midtown Development presents a formal proposal to the city’s Redevelopment Agency for a possible $115 million downtown hotel and waterpark, Mayor Matthew Godfrey said Monday.
Hmmmmm... where have we heard something like this before? Why, wasn't it our very own Mayor Godfrey who assured us several years ago that Mr. Peterson would have his storied "Peterson Proposal" involving sale of the golf course, construction on it of a vacation villa gated community, and erections of gondolas here, gondolas there, gondolas practically everywhere ready for the city's consideration "soon" and "in a few months" and "as soon as its ready" and... well, the list kept going on and on. The promises that we'd have the proposal within months kept stacking up. Until, over two years later, the whole project collapsed of its own dead weight, with even the Mayor agreeing [under the pressure of a tight election] that the idea had not been feasible from the start.
Can Hizzonah's statement to Mr. Schwebke be the start of a new years-long chain of Godfrey assurances that the Mylar Proposal is "a few months" from being submitted. And a few months from now, it will be "in the final states of development, and should be ready in a few months," after which months he will announce that it is expected "shortly... just a few months more, is all." And so on and so on and so on until this Godfrey pie in the sky pipe dream dies too of it's own dead improbable and impractical weight?
Worth thinking about at least.
I forgot to mention, it appears that Orem was at least wise enough to make the parking agreement a separate structure. Lying little matty would have provided the first 3 floors free and clear. Had this mess happend here wouldn't that be a tangled mess. To save his gondola vision I suppose the city would have to finnish and be the proud owners of an empty hotel.
What's the big surprise? It's just more of the same from the Godfrey crack development team.
I hope we can make it another four years without going tits up.
My recent searches showed work was idle at Myler's other developments. How did our crack development honchos on the 9th floor not see that the economy is catching up on these big talkers. Oh, yeah, they are one of the big talkers.
On another note, I ran Taylor Canyon yesterday on my trusty snowboard. One of 5 tracks down the canyon since the Saturday afternoon storm. Awesome conditions though a bit thin and icy on the bottom trails. This was my first descent of Taylor. As I descended I was constantly thinking of how a ski area would provide reliable trail maintenance through this jungle of rock, trees and steeps. No way, not in a million years. Godfrey and Peterson and the rest are so full of shit. What I can't believe is how someone, anyone, with more experience than I had at the time Peterson was making his pitch, never said definitively, that they did have experience skiing Taylors and the idea of offering it as access to or from Malan's Basin is absolute foolishness. While the outcry came from many corners over many issues, I never once heard from anyone who had skied it. Amy Wicks offered some comment on her experience but I still find it amazing that in a community this size there are so few who have dared this terrain and even fewer who were willing to clue in the rest. If anything, the limitations of Taylor Canyon trumps any other limitation to servicing Malan's as a resort. It would be impossible, irresponsible and hazardous to consider offering Taylor Canyon as a skiable route and bragging about skiing down to WSU or anywhere in Ogden. The trail is now an icy hazard with trees crowding ready to provide instant injury to anyone not in full control. It only takes less than half dozen to run this route to completely polish the trail to extreme ice. Nowhere is there room among the trees and rock to improve this trail for even the most basic maintenance.
Per Curm: "My guess would be, deep trouble...."
That would be my edumacated guesstimation too, Curm, considering the facts that are now being presented in the print media.
In a normal situation with a project like the one in Orem, there would be an operative construction loan, with progress loan advances payable to the developer (Myler in this case) as project milestones are completed.
Apparently the Lender (Zions?) has cut off the loan funds which would otherwise flow to the project, which raises the question: What is actually wrong with the project financing? Did Myler fail to achieve an important milestone?
Has Myler shuffled off loan proceeds to other failing Myler projects? Has the construction lender finally caught on to this? If so, we could be witnessing another credit-dependent house of cards crashing down?
One other excellent Nuts 'N Bolts point you've raised with this, I'll address in my next comment.
Just by way of FYI, thought I'd mention that the SE seems to have doubled the number of stories available now on its free webpage. Link [ here]. They usually ran three, tops four, plus the traffic update. This morning, they're running eight stories on the free web page, not counting the traffic updates. For this big-D and small-d democrat, who thinks just on general principles that the more information more people have access to, the better off we all are, this is a good thing.
Perhaps the Standard now realizes that it was a gross blunder to hide most of their daily articles behind a "pay to play" firewall.
Good on the Standard-Examiner, we say.
Better late than never.
The more available articles on the web, the better.
Could this be the first card to buckle in Godfrey's house of cards?
For instance, what's the deal with the "sold out" Erhart condo's that was supposed to be built next door to the penny arcade?
and
Where does our favorite trough slopper Stu Reid stand with his mega million dollar high end downtown - next to the penny arcade - deluxe condo project?
And what is the construction and tenant lease story with the rest of the mall? Who or what is going to anchor it? What major law firms have signed up for trophy corner offices? Has Prada signed their lease yet?
It seems if there was great news and progress with all that we would be hearing plenty of horn tootin from the Godfreyites.
All of the pieces of Godfrey's great - against all odds dream for down town Ogden - relied upon every other piece. So where are the other pieces? How long can the white elephants Rec Center and Theater stand alone in the middle of the mudd hole?
And one last question in this little rant - Who exactly is it that is going to be paying $250,000 to $500,000 to even a million bucks for a condo next to a penny arcade in down town Ogden surrounded by blocks and blocks in all directions populated with poor folks whose kids cannot afford the tariff in the arcade, and as a result could possibly end up turning it into an "attractive nuisance" AKA gang hang out. An island in a stormy sea?
Is this another wild and crazy dream of the Little Lord wherein we are the first in the world to add a whole new meaning to the term "Island living".
"Dodged a bullet?" Rudi asks. Precisely. This is the best news so far in '08 for Ogden. By now, of course, we know it is not possible to drive a stake through the gondola's heart, but at least the Myler fiasco may be setting it back at least until the next election when ... who knows, maybe we can get a stake president to run against Elder Godfrey.
That photo of Myler's Orem project reveals a building so unremittingly ugly and ersatz that we should rejoice.
Oz: Let's not forget the Berthana, the Windsor Hotel, or any other grandiose renovation or construction announced in the past year. What were these people smoking? In this economic climate, even Gadi will be hard-pressed to bring his projects (besides WalMart) to fruition, if ever.
As for your "island living," who indeed is going to live in the Earnshaw/Reid condos? All the p.r. spewed by realtors claimed that they were sold out before even a shovelful of dirt was turned. Who indeed? Was Ed Allen going to show his unshakable faith in Matty by taking the penthouse and pretending not to see the loiterers?
Once, maybe 2 years ago, I dialed the Earnshaw sales number and got the old man himself. He said there was only one unsold condo left, and that he was planning to build 2-3 more in downtown Ogden for much more per square foot than the Siamese-twin-to-the-Wreck-Center. Ahem, projects with that level of investment get finished. What gives, indeed?
Am I naive to hope that this near debacle causes Godfrey’s cheerleaders to begin examining his visions based on their financial merit? To demand that projects requiring any form of public subsidy be scrutinized for sound investment potential? That they ask that decisions be made following due diligence and feasibility studies?
Maybe they’ll even quit using the term “naysayers” and “obstructionists” in reference to those Ogdenites who believe asking these questions is evidence of good government, leadership, and fiscal responsibility. And, yes, even integrity.
The Trib just added that VAl Southwick will plea bargain and admit quilt. Is this a pattern for all the mayors friends to plea bargain, looks like Bobby Geiger CFO has started a trend.
I wish the project had worked [absent the gondola station silliness]. I wish it had been indeed a sound idea and a spectacular success. I am not happy that it has already gone, or shortly is likely to, go under. I hope the two condo blocks do go up and sell out before completion. That would be very good for Ogden. I will not be happy if they run into problems too.
What I am glad about is this: that our new Council members have had the opportunity to learn, very soon after taking office, that the ballyhooing boosterism of the Godfrey administration has to be taken, always, with a grain of salt. That the tendency of the Mayor and his hangers-on to treat possibilities as inevitabilities and the proposed as the already achieved can, if not treated with a cold, gimlet and evidence-demanding eye by the Council, lead the city into very expensive financial disasters involving millions of dollars of the publics' money.
Imagine if the recent hotel development agreement had been approved say six weeks ago, and the $1.4 million advanced to the developers. Would that money have wound up going to the Orem project subcontractors to keep that project on the boards, leaving Ogden holding the bag? I don't know, but it certainly bears wondering about.
If the new Council members learn from this that the Council's oversight function is a vital one for the success of both the business and residential communities of Ogden, if they learn from this latest Godfrey administration embarrassment that it is necessary to ask of every administration proposal, "what evidence have you that this is a good idea and will work out as expected?" And that the grander [and more expensive] the project, the more and more convincing the evidence adduced in favor of it must be. Perhaps even the Mayor's most faithful retainer among the returning Council members has found this latest gaffe and risking of the public purse instructive.
Hard for me to see how the new Council members, and perhaps one or two of the old, could fail to draw these conclusion from the latest headlines.
We shall see.
Weber County Commission delays vote on Powderville application.
Just up on the SL Trib website:
OGDEN - Opponents of the proposed Powder Mountain Town won a minor victory this morning when the Weber County Commission delayed the developer's petition to form a town until the commission, developers and opponents sit down and talk.
Commissioner Craig Dearden said he wants to find out if Powder Mountain's owner, Western America Holdings, is willing to compromise with residents of the Eden area who don't want to be part of the new town.
"I don't know where it's going to go, but I thought it was worth a shot to . . . see if we can come up with a solution that might work," Dearden said.
Powder Mountain spokeswoman Lisa Davis said the developers are happy to accommodate Dearden's request.
"We've been proactive in soliciting public opinion," she said, pointing to a series of public meetings and one-on-one sessions between resort representatives and residents.
"Hopefully we'll have a good, productive discussion," Davis said.
Darla Longhurst-Van Zeben, whose home would be in Powder Mountain Town, said the delay is a good idea. But she doubts Powder Mountain owners will give residents what they want: the ability to opt out or the right to vote for town council members if they're forced into the new town.
The full story, by K. Moulten, can be found
here.
Seems to me the Republican establishment, or elements of it facing re-election this year, are beginning to scramble to find a way out from under the mess their developer owned and operated legislators created when they snuck the Developers' Dream Act through late in the session last year. My my my, will wonders never cease....
Had it not been for concerned citizen comments, we'd be in hock with Midtown by now.
And the best quote of the year was this one, from Rudi (paraphrasing).
"To our younger readers, this is what recessions look like."
Indeed. But this may be no recession.
The Midtown project would have been nice. It just needed to be cleaned up to eliminate the onerous parts, many of which were vetted here.
What is the difference between Ogden and Orem (the latter of which is in hock with a possibly busted developer)?
WCF.
As far as the unkind comments about the county commission. What more could they have done, and be doing?
Thank you, Weber County Commission members for delaying the petition to look into it further.
Curm, the folks that should be taking a hard look and thanking their lucky stars for this lucky shot of dumb luck are those at the Standard Examiner.
Their no checking facts blind optimism conveyence of this story damn near led to Myler getting a chunk of tax dollars and property for nothing in return.
They ran multiple fluff pieces touting every pie in the sky potential benefit exuded by lying little matty and his team, never bothering to dig at all. Had they checked, they could have easily discovered the problems in Orem. They ran all that rah-rah fluff during the time that no-one was getting paid.
They also spun this whole scam as a purely private enterprize causing some in this comunity to swallow that bogus aspect hook line and sinker. Lucky for us the people in Ogden didn't pay a heavey price for their shody, lazy reporting style.
Bill:
I agree, that one important... very important... roll of the press is to question the claims of those in authority. However, let me point out that the Deseret News, which broke this story yesterday, managed not to ask many questions about the Orem project when it was aborning, and managed not to notice that Mr. Mylar was stiffing his subcontractors until six weeks after it began. And the Salt Lake Trib missed the story too.
But that's no excuse. They're not my home town papers. The SE is. And yes, it should have been asking questions about the project from the moment it was announced. Certainly when Mr. Harmer announced that, somehow, he and the crack Godfrey Development Team had misplaced 175 city-owned parking places, and the development agreement was being pulled from the Council's RDA Agenda, the SE should have begun nosing around, suspicious that something was up. [We still have not had from the SE an explanation of what happened with the parking spaces. Only the Administration's claim that they were unexpectedly not available. Why not? No explanation.
Have to conclude, sadly, that the mainstream mullet-wrappers here in Zion are a quart and a half low on having a nose for news, and understanding the role.. the key and essential role they plan in the proper functioning of republic.
Danny:
I too am glad the WCC postponed action on the petition. I just find it funny now that the all-Republican commissioners are scrambling to get out from under the dreck-storm their wholly developer owned and operated co-Republicans in the legislature arranged for them.
What else could they do? Hey, here's an idea:
We reject the petition on grounds that depriving citizens of Weber County of their right of representation is a violation of fundamental American and Utah liberties, and that this Commission will not be a part of it. And if the developers want us to approve the petition to set up a developer puppet government in Powderville in violation of the fundamental liberties of Weber County residents, they can sue and be damned. We will meet them in court.
If Dearden and his Republican colleagues on the Commission issued a statement like that, hell, even I might vote for him.
But they didn't, did they....
In regards to the Midtown development in Orem, one local Orem resident wrote;
Road of Good Intentions | 7:33 p.m. Mar. 3, 2008
“I think that the YEA-sayers need to realize that this is just a little bit of Phoenix, Miami, and Las Vegas right here in River City. The desire for "better" things won't bail out poor planning and ignorance of the macro economy.”
Seems to me this same statement could be said in Ogden.
Ogden needs to actually do planning rather than jump on board the “latest craze” bandwagon and Ogden needs to stick to an established general plan that the residents have outlined as their desires for what they want the city to look like in the future. The administration needs to start listening to the residents rather than big talker developers that just want to make a quick buck.
The city needs to investigate all projects before the city makes any type of commitment. Investigate the developer, investigate the effects that the project will have on other businesses in the city, investigate the financial viability of the project, investigate the need for the project within the city and investigate the timing of the project relative to business cycles within the local and nation economy.
Concerned:
You quoted: The desire for "better" things won't bail out poor planning and ignorance of the macro economy.”
Exactly right. Maybe we can get someone to make that up as a sampler to go on the Mayor's wall. Sustained and sustainable growth [and if it is well thought out and executed, it will be sustainable] is far better for very nearly everyone except the build-and-run developers than encouraging some short term booms. Funny thing about booms.They usually become busts sooner rather than later. Bubbles come down a lot faster than they go up. Ask Citicorp or other banks up to their keisters in collapsing collateralized debt obligations fat with below prime mortgages. Ask whether the fees and short term bump in earnings were worth the many billions in losses they're posting now, and the likelihood of their becoming wholly owned subsidiaries of Bank of Dubai or Bank of Saudi Arabia, to whom they have had to go, hat in hand, begging for infusions of billions to keep them afloat. Act in haste, repent at leisure.
Sustained and sustainable growth is possible for mid-sized cities like Ogden. Some might even call it smart growth. But it takes prudence and care to get it right, not press conferences and ballyhooing quick-fix mega projects long on speculation and short on feasibility and funding.
Thanks for the quote, Concerned.
In regard to the 275 parking spaces: Does anyone recall the deal between Ogden City and Weber County several years ago? The skywalk had to be torn down and the deal they made included 300 parking spaces reserved for use by the Convention Center. I am not sure if this was included in the final, signed deal.
i like the term "YEA-sayers", makes those blind faith followers of godfrey sound like the mindless zombies that they are.
i dont know what institution that godfrey got his mba in finance from but that institution must to be awfully embarrassed by his ability to get an mba degree without obviously learning anything. he will never be their poster boy.
Didn't Godfrey get his MBA from Webber State, AKA Harrison High?
If so, it will probably become part of the school's legend which will pretty much insure that it will never enter the ranks of America's great business schools.
Ah, Marv...
Like all institutions of higher education, WSU's departments [and programs] vary in their rigor. Some are very demanding and some are less so. Same at every institution I've ever attended or taught at. [5 all told now.] But the old canard that I know is popular in these parts that WSU is not much more than a Harrison High is a base canard and wildly inaccurate. Give it a rest. [Full disclosure: I work part time as an adjunct professor at WSU.]
Then of course there is also this: that institutions can offer their students first rate programs and rigorous ones. But those institutions have zero control over what their graduates do, or don't do, with the educations they've gotten. True of all colleges and universities. Everywhere. All the time. To judge any particular program at a university, or the university itself, on the basis of what one of its graduates does later in life is grossly unfair. After all, the Hon. [?] George Dubya Bush got a degree from Yale. What more can I say?
bush was legacy
godfrey must have been brown nose
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