Land bidding war
Text 
No comments [ Add Comment ]By Scott Schwebke
Standard-Examiner staff
sschwebke@standard.net
O
GDEN -- Five years ago, Sherie Sexton was embroiled in a bitter battle to block Ogden's plans to transform a blighted section of downtown into a bustling retail and residential district.
Sexton, who lives at 1887 Childs Ave., got more than 100 neighbors to sign a petition and attended countless City Council meetings to demand the Ogden River Project be scuttled.
Her biggest fear was that homeowners within the project's boundaries would be forced to move and wouldn't receive fair market value if they sold their property to the Ogden Redevelopment Agency.
But last year, Sexton's feelings of opposition changed in anticipation of a big payoff. Like several other Childs Avenue property owners, she became caught in an unexpected bidding war.
In October, Jeremy Bell, a project manager for Orem-based Sandstone Development, was canvassing Sexton's neighborhood and spotted her in her yard.
After a few minutes of chitchat, he offered Sexton $92,000 for her home. Not a bad price, Sexton thought, considering she and her husband, David, had bought the house for $40,000 in 1998.
Sexton decided to give Bell's offer some thought. Days later, a city representative was in her living room offering $82,000 for the house.
Then things got really crazy.
Bell promised $115,000. The RDA offered $110,000.
Sexton felt like a human Ping-Pong ball as offers and counteroffers batted back and forth.
Ultimately, Sexton and her husband chose the RDA.
"We are going with the city because we don't know if the other company (Sandstone) has the revenue to do the project," she said.
The larger scope of the river project may shed light on the dynamics of the bidding war along Childs Avenue.
The three-phase project has been on the drawing board since 2001 and is slated to include about 60 acres that straddle the Ogden River from Washington Boulevard west to Wall Avenue.
About 600 residential units are planned, including apartments, town houses and lofts, as well as a walking trail, 2 acres of open space and about 155,000 square feet of commercial space for retail stores and restaurants.
Declared blighted
The project area has been declared blighted, and the development is expected to generate about $15 million in tax increment for the RDA over 15 years.
The RDA has purchased all 40 parcels in the first phase of the river project, encompassing about 12 acres that extend from 20th Street north to the Ogden River, between Washington Boulevard and Grant Avenue.
Buildings have been demolished in that phase, and the land will be divided into eight lots.
Bingham Cyclery has purchased a parcel at Washington Boulevard and the proposed Park Boulevard, becoming the first business to announce plans to locate in the project area
Bell said that, during a meeting in September, Bill Wright, Ogden's community development manager, indicated Sandstone would be allowed to develop town houses, lofts and retail buildings in the project's second phase.
However, Wright inexplicably soured on Sandstone in October and indicated the RDA had decided to go in another direction, Bell said.
"We could have done (the project) easier and smoother than the city, but something happened," he said.
The RDA never had a deal to choose Sandstone as the project's developer, Wright said.
In addition, Sandstone had only proposed to construct 14 town homes between Grant Avenue and 20th Street, which was too small for the scope of the project, Wright said.
"You would have to do something bigger," he said.
Track record?
Bell also did not provide information about Sandstone's track record in completing similar projects, Wright said.
Bell said he has been involved with development projects in American Fork and Provo, adding that Sandstone is bankrolled by a "$200 million" corporation. He declined to identify the company.
Dave Harmer, the city's community and economic development director, said the RDA hasn't ruled out the possibility of eventually working with Sandstone or other developers on the project.
Leshem's interest
One developer who has expressed interest is Gadi Leshem, who owns 28 properties in Ogden valued around $1.7 million.
Leshem, who is president and chief operating officer of Cover-All Inc., based in Chatsworth, Calif., faces charges in Los Angeles of insurance fraud and conspiracy. He is accused with two others of cheating California out of $11 million in workers' compensation insurance premiums.
Leshem declined to comment on the criminal charges, but said he is considering developing the river project's final phases.
"I'm still studying it," he said. "It's a very beautiful area. But there are a lot of challenges. Some people don't like to see change."
Moratorium
The City Council has placed a six-month moratorium on development in the final phases of the project so a new zoning ordinance can be developed to ensure future work meets RDA standards and plans.
Meanwhile, Sandstone plans to exercise within two months purchase options it has with eight property owners and will then wait for the city to make the next move, Bell said.
"In the end, some developer is going to benefit from the property," he said, declining to comment on whether Sandstone would sell land to the RDA. "If we need to sit on it a couple of years, then we will do it."
According to Sandstone's Web site, www.sandstonedevelopment.net, the company plans to begin construction later this year or in early 2008 within the river project on a development dubbed Ogden River/Templeview Estates.
The RDA has also obtained purchase options on several properties within the project's final two phases, said Harmer, who declined to provide further details.
He also said the RDA may sell the options to a developer, who would then be responsible for buying the land from property owners.
The RDA options are good for six months and can be extended for another six months.
Divided homeowners
Some homeowners are divided on whether they should sell their property to Sandstone or the RDA.
George Welsh Jr.'s home at 1917 Childs Ave. has a market value of about $25,000, according to the Weber County Assessor's Office.
He has signed a purchase offer with Sandstone for $110,000.
Welsh rejected the RDA's $85,000 offer because he believes the city has too many irons in the fire and may not be able to afford the purchase.
"The city has got so many projects going on," he said. "It's crazy."
A warning?
Shirley and Pedro Morguecho, who live at 1851 Childs Ave., turned down Bell's $65,000 offer for their home that has a value of about $46,000. The couple expects the RDA and other developers to eventually make counteroffers.
"I expect lots of buyers," Pedro Morguecho said.
Property owners who see dollar signs when they sign with some developers may find themselves tangled in an agreement that may not materialize, putting them at risk of being able to sell to the RDA, Harmer said.
"(Developers) may offer them more money, but (the deal) may never happen and may take their property out of consideration."
