Delays frustrate developer in Morgan

Jun 27 2011 - 11:44pm

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MORGAN -- A stalemate has developed involving the county, a developer and his customers.

People want to build on their lots being taxed as developable. The developer has fallen on hard financial times but has good intentions. The loan on the property has changed hands twice. And the county wants to protect the health, safety and welfare of its residents and collect on years of unpaid property taxes.

So, the county will not issue building permits in the Rollins Ranch subdivision in Mountain Green while the developer is officially in default of its development agreement.

"We have a lot invested in the county in the Rollins Ranch project and we hope to be able to work through the issues with the lender and the county so people can build their dream homes in the most beautiful place in Utah," developer Rulon Gardner said in an email. "We hope their dreams can come true."

David Sawyer has watched for six months as his goals have been put on hold. He has purchased a lot, drawn up home plans and would have started building had the county allowed building permits to be issued in his subdivision.

Until the developer completes a list of items, such as repairing curbs and gutters, the county will likely keep building permits in check. The council recently told Sawyer to keep putting pressure on the developer.

Gardner said the list of "small, cosmetic" items is nearly complete.

"We are going to finish the items, but the county needs to work with people," said Gardner. He said Morgan County has been a hassle to deal with. "I moved ahead in good faith per the tentative agreement that we had worked out with the staff and then everything is removed by the council. What good is staff?"

Gardner is seeking final acceptance of the subdivision, and had understood a surety and warranty bond would be acceptable. However, last Tuesday the council discussed only conditional acceptance if the developer posted cash bonds. After an executive session, the council unanimously voted to table action on an agreement that might resolve the development agreement default. The council will revisit the issue at its July 19 meeting.

"I don't know where the council stands and what they're going to pull out of their hat next," Sawyer said. "How much hope can you have when the process has gone on so long?"

A new obstacle has been thrown into the mix, which the developer became aware of only in the last week. In 2007, the county assessor placed $2.7 million worth of infrastructure improvements marking the entrance into Rollins Ranch on tax rolls for a 0.87-acre piece of property. A public right of way known as Powder Horn Road on 0.26 acres of that land is supposed to be dedicated and granted to the county. But the county doesn't want the land until it is free of a lien and $32,000 in back taxes.

In this economy, the developer is unable to come up with that kind of money anytime soon, said the developer's counsel, Robert McConnell. The lender may have to come up with those back taxes, as well as much more that remains on the subdivision as a whole, before they are part of a tax sale in May 2012.

"I would hate to see this county miss out on that money," Assessor Gwen Rich said.

"The bank that serviced the loans went out of business in 2009 and turned it over to the FDIC. After years of trying to work with the FDIC, they sold it to an investment bank in New York along with 5,500 other loans," Gardner said. "We were told to get in line. Since March 2011, we have been trying to negotiate with them and we feel that we could agree on a deal and move ahead."

So, a frustrated developer waits. Sawyer continues to look at vacant land while dreaming of a home yet to be.

And the county council wants more time to iron it all out.

"There are legal ramifications here I don't believe we are all understanding," Councilwoman Tina Kelley said. "We need to work with staff."

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