Looks like rival developers of the River Project are spittin' and feudin' already, and not a spadeful of dirt turned yet
By: Curmudgeon
Uh oh. Looks like rival developers [or would be developers] of the River Project are spittin' and feudin' already, and not a spadeful of dirt turned yet. The SE has an interesting story up this morning reporting that the development company (Millrock Capital) associated with the troubled Mr. Lesham is worried that the city may be about to give an unfair advantage to another development company that wants to buy six acres of Ogden City owned land in the River Project Area, and the Lesham-associated company is definitely not happy about it. All this emerged at a City Council work session on the proposed sale of those six city owned acres for town house development.
And Mr. Lesham his own self showed up at the work session. He said he just stopped by to be neighborly, and say "hi" to the council members. About the issue under discussion, he had no comment. [Surprise, surprise.]
The SE story can be found here:
The world-wide webosphere is sitting on the edge of its seat, awaiting word from our savvy WCF readers about the true meaning of all this.
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11 comments:
I don't get the gravamen of Peterson's complaint. Is he saying he thinks he's being gouged on the six-acre parcel? Does he think Gadi plans to undercut him with below market pricing? I don't see what the concern is all about.
I agree it's not made clear in the story. I thought Peterson was worried that Ogden would sell the six acres to a rival developer below what Peterson considers fair market value, thus adversely affecting the value of the property he wants to develop, or allowing the rival to undercut him on prices.
But that's just a guess. Not clear from the story, I agree.
If Mr. Leesham is in bankruptcy in California would he be allowed to still spend money on additional property and could he raise the necessary funds for purchase?
If Lesham could afford the plane fare to come here, why didn't he put that money toward paying off his debt to Ogden? I'm sick of this con man holding us hostage.
It looks like this Millrock group specializes in distressed properties. http://www.millrockcapital.com
Here's an interesting snippet from a May 2010 interview that can be found at http://goliath.ecnext.com/coms2/gi_0199-12919873/Commercial-real-estate.html
S. PETERSON: [Millrock Development] didn't have many transactions for the first nine months last year, but we've seen a flurry of activity in the last 90 days. We think the market's turned a little bit for the better. Three of our four buildings are 100 percent full. The last one is 60 percent full, and we expect it to be full by the end of the year.
Going forward, we've created Millrock Capital as an opportunistic fund. We're looking for distressed assets in the commercial space. We anticipate seeing many opportunities in that area in the next 12 to 24 months with the mid-tier banks and community banks. As we bid on some FDIC assets and others, we have found that people are willing to pay too much for the assets for what we value them at. So there's a lot of money out there trying to be deployed, but we think as those funds are depleted over the course of the next six to 12 months, there will still be a huge amount of commercial real estate that banks will have on their books that are overvalued and will need to be disposed of. We don't think we'll be doing any development for the next three to five years. We think there's going to be too many opportunities to buy existing assets at a discount compared to what we can build them at.
Thanks for the post. Looks like Ogden River Project is now considered an opportunity to pick up "fire sale" property at a steep discount.
According to the county's plat maps, the Ogden City RDA owns three parcels between Washington and Grant, south of Park and north of 20th. The total area of these three parcels is 6.2 acres and their total assessed value is $2.33 million. Generally the assessed value of property is less than its market value, so it appears that the Godfrey administration is proposing to sell this property at a loss of more than $1 million relative to its fair market value.
"so it appears that the Godfrey administration is proposing to sell this property at a loss of more than $1 million relative to its fair market value"
Thanks, Dan.
It appears you've found the answer to Ah'm Confused's above query.
"Fair Market Value" has nothing to to with this. What Peterson wants is a deep discount, i.e., a cut rate, lo-ball purchase price!
No surprises here, as the Boss Godfrey Administration continues to push redevelopment on the taxpayers' backs.
I'm still waiting to see the tax increment arithmetic on this. How the hell will Peterson see $500 grand in tax increment flow to the original purchase price?
It would be a good research project to call the county and make friends with whoever calculates tax increment. They could, presumably, tell you how much the River Project total property value has to increase just to get back to where it was before it became a redevelopment area. But assuming that that amount isn't much, the quoted value of the townhouses would be enough to generate plenty of tax increment for this purpose--if they're built reasonably soon.
Remember thet the mayor had his friend "Bootjack" Peterson bid low and get the property on Wall, aced out a higher bidder for the property. So being a FOM can get you a deal at taxpayers expense.
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