MORGAN -- Morgan County's way of handling a subdivision in default is affecting the bottom line of a local bank.
Lars Birkeland, branch manger of 1st Bank's Mountain Green branch, said his financial institution had to foreclose on three lots in Rollins Ranch. The bank was successful in getting one of the foreclosed lots under contract until the county denied the buyer a building permit.
Instead of purchasing the Rollins Ranch lot, the buyer instead purchased a lot in a neighboring subdivision where building permits are being issued.
"Not allowing other entities to be able to pull building permits punishes existing lot owners," Birkeland said. "We have to dispose of assets in a timely manner. It puts us in a bind to have lots that are worthless, that are not permit-ready."
Some County Council members agree.
"It makes sense to allow private citizens not involved in the development process to build on their own lots," Councilman Alvin Lundgren said.
But Councilwoman Tina Kelley said the stop order placed on Rollins Ranch was not done in a spirit of punishment, but to protect the health and safety of residents in the subdivision in the absence of a bond.
Council Chairman Sid Creager said the county engineer has identified $177,000 worth of items in the subdivision, called the "punch list," that still need to be completed. Therefore, the county is hesitant to give the subdivision even conditional approval.
"If those items aren't completed, then services required can't be met," such as snow removal, Kelley said. "It makes it an unsafe area to have habitations built in."
Birkeland pointed out 11 homes already exist in the subdivision. He said his institution would not be interested in contributing to a performance bond to help pay for improvements. "There were building permits issued before completion."
Developer Dan Bridenstine predicts Rollins Ranch will have a "substantial reduction in density" compared to the original 304 lots proposed.
"There is demand even in a crummy economy for larger lots," he said. "But we don't have complete control of our own density."
Both the developer and bank agree that the county's stop order on issuing building permits is adding insult to injury.
"I don't think the council wants to punish anyone," Creager said. "We just want to see the subdivision (infrastructure) finished."