Tom Clyde: A hell of a lot of cupcakes
More Dogs on Main
June 9, 2017
I'm not sure what to make of the Bonanza Flat deal. That valley is beautiful, at the top of the watersheds, sort of problematic to access and really too nice to mess up with a bunch of trophy houses.
The same could have been said for White Pine Canyon, that is now The Colony, or a lot other places around here. Back in the day, Park Meadows looked great with a bunch of cows grazing on it. There wasn't either the will or the means to intervene in those, and frankly, none of us who were here watching it happen really believed things would go on at this scale for this long.
So the line is drawn at Bonanza Flat. We don't know what the negotiations with the seller have been. Those are legally and practically closed-session items, because it is impossible to negotiate that kind of deal in public view.
If there were appraisals, they, too, are private. The final purchase price of $38 million seems pretty generous. Any offer for development would have been packed with contingencies and a multi-year delay for a complicated approval process. There was some base approval in place, but not something anybody could have pulled permits on. So a clean, cash offer from Park City should have been attractive enough to merit a deep discount. Maybe it did.
The odd thing is that we are trying to fill the gap with heart-warming community efforts like bake sales. The kids selling them are precious. But it’s a hell of a lot of cupcakes.
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The public approved the $25 million bond issue. That was always an arbitrary number. Unless a purchase price had been negotiated before the bond election, the bond would have set the floor of any deal. The seller would know that the buyer had $25 million available. An offer at $24 million wouldn't go anywhere. So the City went into this knowing there was a gap to fill. It turned out to be $13 million. Not chump change.
The City started shaking down its friends and neighbors. Summit County has contributed, though that turned out to be a little less than initially thought. Salt Lake City was interested in a portion of the land that is in the Big Cottonwood watershed, and chipped in a bit. Salt Lake County is mired in partisan politics and may or may not decide to contribute. Wasatch County, which will lose any future property tax revenue from the property, put a little bit in the kitty. There were many others, too, public and private. But we're still short. It changes all the time, but seems to be somewhere between $3 and $5 million bucks.
There are a lot of ways to find that kind of cash around here. Yes, $38 million is a big deal, but $3 million is sofa-cushion kind of money. I have to assume the City is capable of finding that in its budget, or by borrowing from one pocket and lending it to another. Surely the City is not in a position of putting the down payment at risk without knowing it had the means to close the deal.
The odd thing is that we are trying to fill the gap with heart-warming community efforts like bake sales. The kids selling them are precious. But it's a hell of a lot of cupcakes. Are they being set up for heartbreak?
So here's another thought. The owner of the property is, by all accounts, an unhappy partnership comprised of Wells Fargo and a hedge fund. They had jointly lent a ton of money to our old friend Talisker, who defaulted on the loan. The partnership is called Redus LLC, and it got the property through foreclosure. Redus doesn't want it, doesn't want to manage it and needs to get it off the books.
Maybe if there is a shortfall of $3 or $4 million standing between Redus and a quick sale of property it doesn't want, it might float a loan for a couple of years. Last time I looked, Wells Fargo was still in the banking business and has been rumored to make a loan now and then. I don't know what the hedge fund is up to, but it made a loan on this property once before. Maybe it might chip in a little, too. It could at least buy a dozen cupcakes. Just to be polite.
I'm skeptical of rounding up a lot of other governments and nonprofits to become co-owners. I've spent the last several years trying to unravel family business among co-owners who share common property without a common vision. It's not pretty. The management plan is as unknown as the purchase negotiations. But it seems like a mistake to be in a position where Park City has to consult with a bunch of minority partners to do anything.
But a short term loan from Wells Fargo would solve it all. Mention it to the manager next time you are in the bank.
Tom Clyde practiced law in Park City for many years. He lives on a working ranch in Woodland and has been writing this column since 1986.