Housing group seeks extension on real estate deal with City Hall
June 3, 2014
The group that intends to purchase land in Old Town from City Hall and then build a nontraditional housing development is seeking financing for the project as it has not been able to finalize a loan with an American Fork bank, according to a report issued this week by City Hall.
Greenpark Cohousing, LLC won the right to purchase the land — 1450 Park Ave. and 1460 Park Ave. — for $400,000 in 2012. The deal was not completed as the group wound its way through City Hall’s development process, eventually winning the necessary approvals to build the project.
Greenpark Cohousing, LLC in February won the key approval for the project, envisioned as a 10-unit development. The approval allows an eight-unit building, and two old houses at the site will be refurbished. Seven of the units will be sold with income restrictions while the other three will be sold at market rate.
It would be the first cohousing development in Park City. The overarching ideals of a cohousing project call for the people who will live in a development to have an outsized role in its planning, which is different than a typical development.
Mayor Jack Thomas and the Park City Council on Thursday are scheduled to consider extending two deadlines related to the transaction between City Hall and Greenpark Cohousing, LLC. One deals with the financing and the other with the due diligence period, which is the window when a potential purchaser delves into details about a property.
The group wants both of the deadlines extended from June 15 to Aug. 15. The settlement deadline would remain Sept. 1.
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The City Council has pushed back deadlines related to the sale three times. The original deadlines were in the spring and early summer of 2013.
A City Hall report issued in anticipation of the meeting on Thursday recommends the City Council approve the deadline extensions. The report, though, cautions there are "concerns with compromising the fairness of equity" in the process that resulted in the City Council selecting Greenpark Cohousing, LLC over others that were interested acquiring in the property. The report indicates City Hall staffers want a letter sent to Greenpark Cohousing, LLC "notifying them that this will potentially be the last deadline extension request granted."
"While the city is eager to see this project move forward, if this deadline cannot be met, the city will look at alternative plans to achieve rehabilitation of the historic houses and affordable housing goals," the report says.
The report, written by Jason Glidden, a City Hall project manager assigned to economic development, provides details about the financing issues. It says the Bank of American Fork and Greenpark Cohousing, LLC were in talks about a loan for the project. The bank, though, "was concerned that there were no assets being placed to secure the loan," according to the report, which says the bank wants Greenpark Cohousing, LLC to provide $375,000 worth of assets to secure a construction loan pegged at $2.5 million. The report says Greenpark Cohousing, LLC "would be unable to provide" the $375,000 in assets.
The president of Greenpark Cohousing, LLC in May sent City Hall staffers a letter asking for the deadline extensions. Darrell Finlayson said in the letter the group was in talks with Zions Bank about a loan for the project. The letter was released on Monday as an attachment to the report to the elected officials. Finlayson and another Greenpark Cohousing, LLC figure did not immediately return phone messages seeking comment.
The City Council in 2012 selected the Greenpark Cohousing, LLC offer of $400,000 over two other firms that were interested in the property. The others could have been more lucrative to City Hall — perhaps into the $700,000s or $800,000s — but neither of them guaranteed the total sum immediately. City Hall purchased the property for $750,000 in 2009.
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