Updated with a useful plat map and eye-opening additional Dan S. explanatory commentary
The Standard-Examiner reports that SouthRiver LLC remains in the hunt to purchase and develop 6 acres within the Ogden River Project, with a proposed development agreement to be laid on the table for RDA consideration "in the next few weeks":
OGDEN -- A proposed development agreement is being fine-tuned that may enable a Salt Lake City firm to purchase about six acres downtown from the Ogden Redevelopment Agency as part of the long-awaited Ogden River Project.Read the full Scott Schwebke story here:
The RDA is expected to consider the agreement in the next few weeks for the sale of land to SouthRiver LLC, allowing the construction of 69 townhomes and retail space, Jonny Ballard, the city's community development manager, said Monday.
More specifically, according to the council's online Land Use and Planning Project Status Page, the matter will be coming up for RDA discussion and public comment on July 12:
Mr. Schwebke's morning story reports that "[t]he company hopes to begin construction in July," which seems like uncomfortably and possibly unrealistically tight scheduling, unless the RDA Board has already agreed (informally and behind the scenes) to rubber stamp the agreement, prior to any public comment or deliberation.
We'll keep our eyes on this story as it develops, of course.
In the meantime, feel free to throw in your own 2¢.
Update 6/21/11 11:25 a.m. (per Dan S.): Here is a plat map showing Phase 1 of the River Project, annotated with the current assessed property values (taken from the Weber County Treasurer's web site). The three parcels currently proposed for sale to SouthRiver LLC are highlighted in yellow. The RDA sold the blue shaded parcel in late 2006 for $324,975, and this parcel is now the site of the new Bingham's Cyclery building. The area shaded in pink was never owned by the RDA as far as I can tell, even though it is within Phase 1 of the River Project redevelopment area:
(Click Image to Enlarge)On April 27, the Standard-Examiner reported that SouthRiver LLC was "under contract" to purchase the yellow-shaded parcels for $1.3 million. That's a million dollars less than the assessed value of over $2.3 million. Furthermore, the RDA was to subsidize $559,000 of the purchase price through tax increment, so the effective purchase price would be only $741,000 -- less than a third of the assessed value.
The RDA originally purchased and cleared this land using two sources of borrowed funds: a $2 million loan from the city's Refuse Enterprise Fund, consisting of the insurance settlement from the burning of the Shupe-Williams Building; and a $3 million line of credit with First National Bank. According to the minutes of the city council meeting of April 25, 2006, the former loan was to be interest-free for five years, with a 10% interest rate thereafter. According to the most recent RDA Annual Report, the bank loan had a "maturity date" of June 8, 2011.
11 comments:
I notice this mayoral candidate Jonny Ballard is getting most of the economic development press lately. Could this be construed as an effort on the part of the Mayor to increase Ballard's name recognition in advance of the 2011 Municipal Election season?
And is Godfrey going to replace Patterson?
So the city will loose $1, 559,000 in selling this property with tax increments for $741K. Any quarantees via a non-performance bond that they will actually build there, or will it be like the Windsor and have them walk away. How many more gieavways will the mayor do before he leaves town on a rail.
That's right, GR1. Even more evidence that publicly-elected dunces (Like Boss Godfrey), who "dabble" in real estate on the taxpayers' dime, without incurring any personal risk, will ultimately, through their own idiocy, lack of experience, etc., lose significant amounts of taxpayer dough before their dumb asses are ushered outta office.
Godfrey belongs in Draper for the economic pain he's inflicted on us, the Emerald City Taxpayers.
Unfortunately, the Utah AG's office is a neoCON protections racket, no?.
I spoke with Mr. Ballard on the phone this afternoon and he was able to some but not all of my questions. He said the outstanding debt on the bank "line of credit" is $1.7 million, and this loan is being renegotiated. He was unaware of the refuse fund loan but confirmed that it's still outstanding and "not being talked about". He also confirmed that the River Project RDA is already collecting some tax increment ($54,250 in FY 2010) but wasn't sure how that's possible, given that only one building has gone up. Finally, he said the proposed sale price to SouthRiver LLC is still in the same range as was previously reported, $1.3 million, and that a current sticking point in the negotiations is that when the land was cleared, the soil wasn't properly compacted.
Another typical Godfrey loser deal! Buy up property with tax payer money then turn around and sell it for significantly less than what you paid for it. I suppose he figures he might make up for it in volume!
Of course his rational for these horrible deals is that as improved properties they will be throwing off a lot more property tax dollars to the city. The fallacy of that is the enormous number of years it would take at an enhanced tax rate for the city to make up for the millions in losses from the original deals - plus the lost tax income the property doesn't pay during the very long times the city owns said property where it pays no property taxes.
I still maintain that Godfrey is playing more dishonest games with his declarations of not running for re-election. With losing records like the above land deal, a deal that is very typical for him, just who would hire him in the private sector? I say he will throw his hat in the ring at the last minute and do so declaring that the public demands he stay in office for the greater good.
I talked with Mr. Ballard on the phone yesterday afternoon and he was able to provide a little more information about the River Project financial situation.
The proposed sale price for the 6 acres is still in the range that was reported in April: about $1.3 million. The ongoing negotiations with SouthRiver LLC are over details such as the fact that the soil wasn't properly compacted when the land was cleared.The outstanding balance on the $3 million line of credit (bank loan) is only $1.7 million. (Perhaps the full $3 million was never borrowed, or perhaps some has already been repaid, or--most likely--a combination of both.) The administration is currently renegotiating the terms of this loan, presumably because it was supposed to be paid off earlier this month.The $2 million loan from the Refuse Fund is still there but apparently nobody is talking about it.The FY2010 RDA Annual Report shows that the River Project is already receiving some tax increment: $54,250 for FY2010. Mr. Ballard wasn't sure how that's possible, given that only one building has gone up so far. Perhaps the vacant land is actually assessed at a higher value than the houses that were there previously. The Annual Report also shows $628,387 in revenue from "housing to River Project". Mr. Ballard said that this is a transfer from other RDA areas to comply with requirements that a certain amount of RDA funds be spent on housing projects.
Thanks for the additional update, Dan.
No problem, Rudi. I tried to post an update earlier via my phone, but it never appeared. (The new mobile interface is great for reading but doesn't seem to allow one to post comments.)
I think the biggest issue here is the $2 million loan from the refuse fund (originally from the Shupe-Williams fire insurance settlement). Will it ever be repaid? If so, how? Inquiring minds want to know.
It is interesting how Godfrey can sort of sweep under the rug this $2 million buck "loan" from the refuse fund (what ever the hell that is), while in the recent past he used the supposed "loan" from the cemetery fund to the Mt. Ogden golf course as one of the reasons to sell it off to his crony Peterson for a song and a dance.
Belated correction: The map in this article turns out to be incorrect. Instead of the two parcels along Washington, the plan is for SouthRiver to acquire the three parcels along the river, north of Park Blvd. I'm not sure if I was given incorrect information, or if the plan has changed since then. Update here.
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