Thursday, January 15, 2009

Another Downtown Project Bites the Dust

Oops! Would be developer Stuart Reid pulls the plug on Ashton Square

Astonishing story on this morning's Standard-Examiner business page, announcing that wannabe developer Stuart Reid, who had ambitiously planned construction of a lavish seven story condominium and commercial building at the southwest corner of The Junction, has quietly divested his interest in his one acre parcel, and transferred it back to the original grantor, LDS Church subsidiary Property Reserve, Inc. From this morning's Scott Schwebke story:
OGDEN — A developer has sold about an acre at The Junction complex downtown back to Salt Lake City-based Property Reserve Inc.
Stuart Reid, the city’s former community and economic development director, bought the land at the southeast corner of 22nd Street and Grant Avenue in April 2007 from Property Reserve, which is owned by The Church of Jesus Christ of Latter-day Saints.
Reid had planned to construct Ashton Square, a sprawling 224,000-squarefoot condominium and commercial building on the property.
However, last year he abandoned the project because of a downturn in the economy. [...].
Tom King, vice president of Property Reserve, declined Wednesday to disclose how much the company paid Reid for the land.
Property Reserve has no immediate plans to develop the parcel that’s near Ensign Plaza South, an office building the company owns at the southwest corner of 22nd Street and Washington Boulevard, and the Ogden LDS Temple.
On the heels of Larry Myler's cancellation of his Mega Hotel & Wading Pool Project, Reid's abdication of his downtown development role marks the second key Junction project to be taken off the economic development table within the last half-year.

This is decidedly bad news for the taxpayers of Ogden, who'd been hoping for early respite from our crushing $750 thousand annual Junction bond payment. The next payment comes due in June, as we understand it. This year's payment, if memory serves, will be the third consecutive bond payment to be picked up by the taxpayers.

Godfrey's Community and Economic Development Department "A" Team currently accounts for 33% of the expenditures in Ogden City's budget. We'd suggest that it's high time these overpaid empty suits get off their keisters and start pulling a few rabbits out of their hats.

Comments, anyone?

12 comments:

Ray said...

fyi- Headline in the Money section of the SLT today:
"Ogden Developer in Bankruptcy"

"The California company of Gadi Leshem, an investor in Ogden's downtown redevelopment, has filed for bankruptcy. How the bankruptcy of Leshem's business might affect his plans for the Ogden project is unknown" More info is contained in the subsequent article. Seems to me the downtown house of cards is imploding.

RudiZink said...

Thanks Ray! FYI, I just posted a main article on this topic moments ago.

From the tone of news over the past two days, it appears Boss Godfrey's financial house of cards is finally tumbling down.

Keisha said...

Excuse me, But Didn't Mayor Godfrey promise that the taxpayers would never be on the hook for the Junction bond debt?

Next time I hear some Godfrey disciple say "Godfrey is a genius," I'm going to puke all over him.

Captain Nemo said...

AHAH! The rats continue to desert the sinking ship!

monotreme said...

Keisha:

Yes, he made that promise repeatedly. I heard it with my own ears, and reported it here some time ago. I would have to dig to find the rough transcript of my phone conversation with the Mayor, but I have a vivid memory that he said "the Junction will not fail" because I asked him, three times in the Biblical fashion, "What will happen if the Junction fails? Who will pay?"

I finally got him to "answer" the question as a pure hypothetical, and still, he refuses to acknowledge that the taxpayers have any liability here at all.

We'll find out soon enough.

drewmeister said...

I wish I could sell my sinking assets to the church. Too bad I'm not a bishop or stake president.

OgdenLover said...

Did Stuart Reid make a profit on this property or just not lose his shirt like you or I would?

ozboy said...

The Lil Lord and his mouth pieces did in fact assure concerned citizens on numerous occasions during the "approval" process that the tax payers would never be on the hook for the Junktion. These shallow and disingenuous promises were made in several different city council sessions when he and his inept, and lame duck, gang of five (former council) rushed through the approvals at the twelve hour before they left office. I'm sure it is all in the official records of those meetings.

Incidentally, the whole "high adventure - sports" angle was pushed through by the Godfreyites on false pretenses. They claimed wide public support for the idea which was a big distortion of the true public opinion of the time. There were several polls taken by the Standard in that time frame that showed a strong public sentiment against the idea. However, the Lil Lord and his lying minions referred back to their own surveys which said most people wanted a physical activity element to new mall. What most meant by "physical activity" was a place where they could go to walk the mall and get some exercise, like they were doing at the New Gate mall and at the old mall. I do not think that any one had in mind the total abortion that was finally built at huge public expense. The bottom line is that these lying bastards took an inch and turned it into the most expensive and useless mile in Ogden's history. They built a huge and obscene monument to their own stinking ego's and they did it with lies and manipulations. The current and future tax payers of Ogden will be paying for this crime for many years into the future. Long after the pile of crap has been torn down we will be bleeding big money over this fiasco.

Curmudgeon said...

The original bonding for the Junction construction was not to involve a city guarantee of payment. The Mayor came back to the Council after the Junction project had initially been approved I think, and asked for approval to have the city co-sign in order to make the bonds more attractive to buyers and at better rates. He assured the Council that the City would not end up paying off the bonds.

Signs that the design and plan for The Junction project were risky were thick upon the ground when this all began. Recall the original company Ogden hired to develop the mall property told the city the project would not succeed the way the city wanted it structured [bowling alley, etc.]. That company pulled out and the city hired Boyer to develop the mall instead. Even then, the administration ignored --- or tried to --- Boyer's advice, asking the Council to approve two additional floors to the office tower at the se corner, at city expense and risk for leasing. Happily, by a one vote margin, the Council said no.

The fact that to sell the bonds for the development the City had to pledge the full faith and credit of the city to back them should have offered a caution that... in the midst of a runaway real estate boom... "the market" had serious reservations about the project.

We can point fingers... and will... and talk about where and why things went off the rails... and doubtless we will do that too. I certainly will. But the most important question now is: where do we go from here, given Mr. Lesham's implosion, Mr. Reid pulling the plug, the River Project's grinding to an apparent halt, and current economic etc. What will be the best course, economically speaking, for the City, the Mayor and the Council to take? That's what matters most now.

dReWmEiStEr said...

"What will be the best course, economically speaking, for the City, the Mayor and the Council to take?"

In the case of the mayor, it'll be the same course he always takes - blame someone else.

Frank said...

Curmudgeon

I would like to point out that the mayor and old council represented right up to the last minute that nowhere in the deal was the city tax payers responsible for the debt. Then at the end of the very last meeting of the old lame duck council they pulled a surprise and voted in the provision that you referred to above wherein the tax payers were fully responsible for the debt. Very sneaky and I rather suspect that Godfrey and the old gang of five had it planned that way after the recently past election which they lost.

I also would like to point out that the three new council members that replaced three of the worst of the old council ran on a ticket of open disclosure and more intelligent approach to the whole mall question. They all won with big margins and the mayor saw the hand writing on the wall and realized that the new council would not be the rubber stamp that the old one was. This is why he and the old council acted in such a sneaky manner in sliding this horrible project through in such an underhanded manner.

disgusted said...

what do we do now with the river project until it get off the ground in the future.
i suggest that the city take down the old houses but leave what ever trees are there and then put in a skrinkler system and plant grass. a nice big park would be a great addition to the area until such time as it is developed. a park would be a lot safer than what is there now. not to mention the estetical aspect and the fact that it could be some time before this project gets legs again.

Post a Comment

© 2005 - 2014 Weber County Forum™ -- All Rights Reserved