Ben Lomond Hotel Ownership Throws a Hail Mary

Trustee sale set for September 29; owner plans to file Chapter 11 petition

By Curmudgeon

Sad story on the front page of this morning's Standard Examiner. The Ben Lomond Hotel has defaulted on its loans and plans to file for Chapter 11 bankruptcy protection in hope of reorganizing and refinancing its debt.

The plan apparently involves selling a lot of the hotel's condo units to raise cash to retire as much of the loan as possible and to enable refinancing of what will remain. Selling off a lot of condos into the current declining market seems a hail-mary pass with time running out on the clock to me. But I hope it's successful. The Ben Lomond Historic Hotel is too valuable a part of Historic 25th Street and downtown Ogden to lose.

Ben Lomond Hotel Heads for the Auction Block

Ambitious hotel development project hits a slight snag... i.e, Foreclosure

It was a mere six months ago that the Standard-Examiner delivered optimistic Emerald City economic development news, with the announcement that a Las Vegas investor had acquired the venerable Ben Lomond Hotel. Ian Dixon, president of UIG Resorts reportedly intended to renovate the Ben Lomond’s lobby, install an upscale restaurant, convert existing commercial space into 147 condominiums, and ultimately build a 200-room tower near the hotel’s parking garage.

What a difference six months (and an economic recession) make. The Std-Ex reports this morning that Dixon's ambitious project, or at least a portion of it, is headed for the auction block:

OGDEN — A notice of default on a $5.3 million bank loan has been filed against a corporation that owns condominiums and suites within the historic Ben Lomond Hotel.
The notice filed with the Weber County Recorder’s Office indicates 2510 Washington LLC is in default because it has failed to make monthly installment payments to Financial Freedom Loans Inc.
Information was unavailable Wednesday regarding whether foreclosure on the Ben Lomond is imminent. Timothy W. Blackburn, an Ogden attorney representing Financial Freedom Loans, was out of the office.
The notice doesn’t detail whether the default involves all of the hotel and doesn’t list the principal owners of 2510 Washington LLC.
It’s unclear whether the entire Ben Lomond is owned by a single corporation or multiple individuals, said Tom Christopulos, the city’s business development manager

We had a fairly robust discussion on the this topic back in January, in which a number of our gentle readers expressed reservations about the wisdom of launching another hotel project in the Ogden market, where existing hotels already seemed to be struggling with low occupancy rates. On top of that, a few of our readers expressed concerns about the financial capacity of UIG, whose sole apparant assets appeared to be limited to a website, some undeveloped acreage in Paraguay and the Phillippines, and a vague business plan emphasising mergers, acquisitions, joint ventures and... get this... web design.

According to this morning's story, this is one of the few downtown development projects that hasn't been on the public dole, so this doesn't appear to be a project where taxpayer dollars are at risk. Nevertheless, the apparent failure of this project piques our curiosity, and we're curious about what happened here, as a highly ambitious privately-financed developer seems to have hit the terminal skids.

Was Mr. Dixon and his company simply hamstrung by the tight credit market, which has existed since at least March of 2007? Did Mr. Dixon make the original puchase on the basis of flawed due diligence, learning only after acquiring the property that The Godfrey Vision wasn't quite the "hot real estate ticket" that had been portrayed by the administration? Did Mr. Dixon lack the financial capacity to pull off such an ambitious project in the first place, as several of our readers suggested? Did Mr. Dixon acquire his ownership interest in the property merely as a short-term play, with the intention of "flipping" it for a quick profit, once the newly-sworn in Boss Godfrey, secure in his third four year mayoral term of office, set forth to work his high adventure destination magic? Does this latest story development have anything to do with gondolas... or lack of gondolas?

We realize these questions all call for plenty of speculation, since today's story is a mite thin on the facts. And in the next few days, time permitting, we plan to mosey on down to the County Recorder's office to find out who's really in title... and whose property interests are truly at stake.

In the meantime however, we invite you all to put on your thinking caps, and offer your own insights at to what may be happening at the Ben Lomond Hotel.

And if any of you are privy to additional facts to add to the discussion, we'd love to hear about them.

Comments, anyone?

Tuesday Morning News Roundup

Proposed election law reform; and a new owner for a classic downtown hotel

By Curmudgeon

Two interesting front page stories this morning in the Standard-Examiner. First, this:

SALT LAKE CITY — Rep. Neil Hansen hopes to pass legislation that would allow Utah voters to register on Election Day, limit the power of poll challengers and increase transparency in the election auditing process. Hansen, D-Ogden, and the American Civil Liberties Union of Utah organized a meeting last week with county clerks, state election officials and outside experts to discuss the election reform measures.
The Election Day registration bill would allow unregistered voters to show up at the polls, provide identification and proof of residency, and then cast a regular ballot that can’t be thrown out later, Hansen said.... Weber County officials threw out more than 500 provisional ballots in November, some because poll workers filled out the forms incorrectly.
Marina Lowe, a staff attorney for the ACLU, said its investigation into voter complaints about the Weber elections was part of the impetus for the meeting Thursday. Weber County Clerk/Auditor Alan McEwan, who attended the meeting, said Election Day registration could help alleviate provisional ballot complications, which other counties in the state also experienced. “It could help, but it’s not problem-free either,” he said.
One of the concerns with same-day registration is the possibility of people using fake identification to commit voter fraud, Lowe said. However, she added, the states that use Election Day registration have not reported any fraud....
Hansen has another bill that would require poll checkers to register in advance and wear some identification so that voters don’t mistake them for election officials. He is also putting forward a bill to allow independent audits of election results.... McEwan said allowing for independent audits instead of state-run audits makes a lot of sense — if done correctly.

Several things worth noting. First, that the Weber County Clerk/Auditor, whose first response to the complaints about the polling place problems in the last election was to stonewall the press and public and ACLU and to deny, deny, deny, has now apparently awakened, smelled the coffee and is attending meetings with Hansen and the ACLU to look for ways to improve things. My my my. Imagine that.

Second, worth noting that the ACLU and Hansen have done their homework, apparently, and done what simple common sense would suggest: ask states that have done the reforms Hansen is proposing how they've worked out, whether the predictions of massive vote fraud [the Republican's favorite tactic for stopping election reform] have in fact developed from the reforms. Turns out, they haven't. Imagine that.

Kudos to Rep. Hansen and the ACLU [full disclosure: I am a proud card-carrying ACLU member] for their looking into the Weber mess in the last election and for working to propose reforms to make sure things are handled better in the future. And belated kudoes to Clerk/Auditor McEwan for, finally, emerging into the light of public scrutiny and dropping the stonewalling. Took a while, but nice that it finally happened.

Second item is this:

OGDEN — The Ben Lomond Hotel has been sold to a Nevada company, paving the way for a long-anticipated $50 million renovation project, according to the new owner.
UIG Resorts, based in Las Vegas, has purchased the 81-year-old hotel from Dan Tabish and his partner, Jeff Van Dyke. Tabish declined to disclose the sale price of the hotel, 2510 Washington Blvd. He said he and Van Dyke sold the Ben Lomond because they are unable to undertake renovations to restore the hotel to its original grandeur. “We ran out of capital to bring the project to fruition.
Work to renovate the Ben Lomond’s lobby will begin next month, and an upscale restaurant named Capone’s is expected to open in about three months in the hotel’s Oak Room, Dixon said. Plans also call for the conversion of some commercial space at the hotel into 147 condominiums, Dixon said, adding that UIG also plans to eventually seek approval from the city to build a 200-room tower near the hotel’s parking garage.
Once renovations are complete, the Ben Lomond would operate under the flag of Wyndham Hotels & Resorts, he said.

Again, a couple of points worth mentioning. First, the Std-Ex ran a long and enthusiastic piece about the renovations to the Ben Lomond sometime last year. Much enthusiasm about the return of the grand hotel. But the owners ran out of money to finish the project. Just a cautionary tale regarding grand plans and projects: many a slip twixt cup and lip. Wishin' an' hopin' an' dreamin' do not necessarily mean they'll all come true.

Glad new owners with [it is to be hoped] sufficient capital to see the project through have been found. But again, it would be wise, while wishing them all the best, to restrain the jubilation and celebration until the newly restored Wyndam Grand Ben Lomand actually opens its doors. Ditto for the planned new tower block of 200 rooms.

The mix seems to be the same as is planned for the mega-hotel at the mall redevelopment site. Condos plus hotel rooms plus "upscale" eatery. That's an awful lot of capacity coming on line in Ogden more of less simultaneously. Hope they've done their homework regarding the potential market. Be wonderful if it all succeeds as planned. But again, we'll have to wait an see. And hope the developers don't want public money to do what they plan.

Finally, let me encourage the new owners to look into refurbishing and reopening the old roof top restaurant/bar at the Ben Lomond. One of Ogden's great assets is its magnificent view of the mountains, and very nearly none of the city's eateries or drinkeries take advantage of it. Hard to see how a "Top of the Ben" wouldn't have a lot going for it as a place to meet friends, and business associates for a dram or two. [Mrs. Curmudgeon and I would be happy to provide a review of a rooftop lounge at the Ben Lomand as part of our continuing research on "Rooftop Bars of the Mountain West." It's a book, we think, crying to be written. We plan the definitive work, though much research remains. We know, we know, it's a grueling job, but somebody has to do it.]