An Ode to Summer: Snow Hits Park City This Past Weekend

Mother Nature decided to tempt us this last weekend with a pre-emptive sprinkling of the white stuff.  Temperatures one day were in the 70s and the next day it was snowing.  Welcome to Utah.

The brisk morning air reminded me of two things: 1. It has been WAY too long since I’ve posted on my blog.  2. I have some recent pre and post snow photos I’ve taken.  I think #2 can help me out with #1, so with no further ado, feel free to peruse what I call my homage to summer.

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Promontory Update: Credit Suisse Is Unable to Raise Exit Financing

Last week I posted that Promontory had emerged from bankruptcy with a valid agreement that garnered the approval of all the parties involved.

As a part of this agreement, Credit Suisse (who has functioned as the voice of most of the lien holders) was given seven days to raise $70 million in exit financing.  As of today, Credit Suisse has given notice that it was unable to raise the necessary money.

Pursuant to the agreed upon terms this opens Promontory up to a bidding process wherein bids must be received by April 13, 2009.  The auction itself will be held on April 15th, with the court set to certify the auction results on the 17th.

As I mentioned last week, I still think Promontory has spectacular potential as an investment.  A June 2008 appraisal pegged the development’s value at $560 million.  But I think the true value is it’s unique nature, and spectacular location.  With the existing golf courses, club houses, and other infrastructure I think it fits as an ideal example of a true vacation destination.  It offers opportunities for golfers and non golfers alike.

More information will follow soon, and as it does, I’ll update this post.

UPDATE (3/20 3:13 PM): The auction won’t negate so called “key aspects” of the bankruptcy plan, and according to Rich Sonntag, Managing Director of Promontory, “The auction allows other parties who are more directly involved in the development business to bid for control and may even accelerate Promontory’s rebound from bankruptcy under the guidance of a qualified developer.”

 

Promontory Emerges from Bankruptcy.

Thursday marked the emergence of Promontory from the voluntary bankruptcy they filed just shy of a year ago.  During that time Promontory as well as a group of significant investors, including Credit Suisse, worked with the bankruptcy court to set up a plan for Promontory and its creditors to move forward.

Under Thursday’s plan, Credit Suisse is left in a lead role representing the first lien holders. CS also has a few responsibilities going forward.  The coming week will allow them to raise the capital necessary for exit financing.  If the money is raised, then CS will be able to take possession of the property at closing on March 23.   If CS is not able to raise the funds, then Promontory could potentially be sold at auction.

But considering the restructuring plan garnered 100% approval, CS is fully expected to gather the money necessary move forward with the takeover.  This would leave the creditors in a great position to leverage the remaining lot and cabin sales and continue with what has the potential to be a fantastic development.

More details will be forthcoming in the next week, and I’ll post updates as they come along.

 

Bar Is OPEN! Utah Drops Private Club Membership Requirement

For 40 years Utah has had the unique status of being the only state to enforce so called “Private Club” rules.  These rules stated that any bar, club, or other establishment that could serve alcohol (resaurants escape the rule by requiring drinking patrons to also order food) require patrons to join for a fee.  Fees varied from a couple of bucks to $20+ dollars, and the membership was good for a year. 

This strange custom often confused tourists and newcomers, and according to some in the tourism and hospitality industries, made Utah a consistent butt of jokes.

But all that will change now.  Last night, Utah’s House of Representatives passed a bill that will repeal the “Private Club” portion of Utah’s laws.  In place of memberships, clubs will now be required to have an electronic scanner to read ID’s and ensure against underage drinking.  Clubs will be required to keep a record of ID’s scanned for 7 days, but this pales in comparison to the current three year requirement for private club information. 

 Now that it’s passed the Legislature, it’s on to Governor Huntsman, who has already promised to sign the legislation.  The new law is slated to take effect July 1st.

For the full read (I recommed massive amounts of caffeine before attempting) visit the Utah Legislature site by clicking here:  Substitute Senate Bill 187

 

Air Force Hotel… And a Movie Studio Coming?

House bill 216 has brought renewed attention to a long running plan to bring an additional hotel to the Park City area.  The hotel is intended to be built on land owned by the Air Force, but after 12 years of back and forth in planning commissions at the city and county, there still aren’t any finalized plans.  That’s where HB 216 comes in.

The bill is written to allow the Air Force to avoid the hiccups of local zoning and planning rules in order to fast track the completion of the project.  Currently the Air Force’s representatives are looking at approximately 600-800 hotel rooms, but their reps have also said that they don’t see the project as financially viable without a commercial component of some sort.

Enter Todd Bay, owner of local production company Bay Entertainment.  Mr. Bay has recently announced plans to bring a movie studio, complete with sound stages, to the Park City area.  Mr. Bay states that he already has a funding lined up, and a studio management company set to take the reins.  Combined with the hotel, the whole project ends up being bigger than Summit County and Park City would prefer.

For the city and county, it’s a combination of two separate problems.  First, the over all scope of the project is significantly bigger than either of them would prefer.  And second, the location is a bit of a hot button issue.  The Air Force really hasn’t made much of an effort to hide the fact that their top choice for location would involve a land swap putting them onto a parcel near Quinn’s Junction at the intersection of I-40 and Hwy. 248.  But both the city and county have long hoped that the current land owner would eventually allow them to deed the parcel as open space.

From the Air Force side, twelve years is getting a little long in the tooth for Air Force higher ups who are wondering why this hasn’t happened yet.  So with the introduction fo HB 216, the Air Force and it’s developers would be able to bypass the red tape that’s kept progress to not much more than a pipe dream.

The ironic thing from the city and county sides is that officials have gone on record stating that they don’t think Quinn’s Junction is the appropriate place for a hotel nor a movie studio.  Yet, with some of the other development going into the area it’s seeming like more and more of an appropriate use. Quinn’s Junction is the location for the hospital that’s currently under construction, as well as the Olympic Training Facility that was announced last year, both of which will open their doors this year.

On the whole, I think a top of the line movie studio would be a welcome addition to the Park City economy.  But  I’m not sure if the Quinn’s Junction spot would be the best place for it.  800 rooms is a lot of space, but depending on the site plans it may be possible.  Now that the bill has passed both the House and the Senate, and only awaits the Governor’s signature, I hope the Air Force takes the high road and gives Park City and Summit County another chance to come up with a feasible plan, before taking advantage of the new loophole HB 216 will provide.

 

Park City School District Dodges Property Tax Equalization Bill

The Utah House of Representatives has spent the last few weeks working on a designed to take additional property taxes from high value school districts and redistribute it to low value and/or high growth school districts.  The end result would of course be to provide additional funding to school districts who aren’t earning enough revenue through property taxes.

This proposal could have reallocated millions of dollars in funding raised through Park City area property taxes, and headed for Park City, South Summit, and North Summit School Districts, and instead spread it across several other districts all over the State.  But according to District officials, it’s not money that any of the three Park City area districts can afford to lose.  The Park Record even quotes one official as saying his district has  just reached the point where they could afford to start fixing existing infrastructure.

To me the problem is actually deeper than just the dollar signs.  Residents within the Park City school district have voted to pay a higher property tax rate to support and fund the school district.  There’s nothing stopping any of the other school districts from voting on such measures to increase funding from within.  And if additional funds are truly necessary, that’s what should happen.

The second half of the issue is that the state already receives and redistributes significant amounts of money from Park City property taxes, and in the words of one school board member “If the state felt they could come after property taxes and equalize them to other areas of the state, what’s to prevent them from taking locally approved taxes such as recreation-district taxes and fire-district taxes? Where would it end?”

Fortunately, the bill failed to pass with the requisite number of votes.   But this will most likely not be the last time that property tax equalization is brought up.

 

Stimulus Bill Brings Back Higher Loan Limits and Other Goodies

-Updated portions show in italics-

With a swoop of his pen, President Obama signed into law the largest stimulus bill ever passed.  In it were several portions specifically focused on the housing and mortgage markets.

The American Recovery and Reinvestment Act of 2009 as it’s officially known, reinstates the temporary loan limits issued last year.  This means that the upper end of the loan limit for Fannie, Freddie, and FHA loans will be $729,750 (Summit County qualifies for the $729,750 while nearby Wasatch County qualifies at $431,250).  Combine these new limits with interest rates hovering in the 5% range, and you’ve got a compelling case against the wait-and-see-ums.  But time is of the essence, these loan limits will expire at the end of the 2009 calendar year

For new home owners the package also brings a tax credit…to the tune of $8,000.  This credit will be accessible in much the same way as last year’s TARP-based credit, but the good news is this tax credit is not considered a loan, so home owner’s won’t have to pay it back (Last years credit was paid back over a portion of the life of the loan).  But you may want to act soon, like the higher conforming loan limits, this tax credit is set to expire at the end of the year.

In addition to these two programs the ARRA will provide additional funding for programs such as rural housing, low income grants, tax exemption bonds, and energy-efficient housing grants and tax credits.

With all these changes on the way, look to see money trickling into states starting as early as this week.  As far as the tax credits, they’re available for any properties purchased in this calendar year.  Realtor.org has an excellent executive summary of the items that will impact the housing sectors.  Realtor.org

 

City Changes Licensing for Nightly Rental Properties

Park City has made some changes to the way they are handling the large number of nightly rental properties.  Now each property must maintain it’s own business license.  This, added to the fee increases over the last couple of years, does mean that owners will be paying more for each property, but the benefit is that if you own several properties and one of them doesn’t pass the mandatory inspections, they you can keep renting all the other properties.

To get some more information about this change, you can check out an article the Park Record wrote recently, or you can go straight to the source and visit Park City Municpal’s website .

 

Additional Montage Photos.

Montage Hotel Construction

This is a quickie post, but I’ve had significant interest in the Montage Hotel that’s currently under construction in Empire Pass, so I’ve been trying to keep folks as up to date as possible.

I was in the area today, and was able to snap a few new photos.  So I listed them in my Montage photo gallery here: Montage Hotel.

If you would like to be added to my Montage Hotel information list, please send me a quick email.

 

Update for Sundance Film Festival 2009

With just six short weeks till the Sundance Film Festival takes over Park City’s Main Street, there’s plenty of work to do to get everything ready.

The Sundance Institute has been hard at work sifting through over 3,600 feature-length films to come up with the list of the festivals 118 feature film line up. Take a look at the Institutes recent press release for the full list. See the release here. Or you can view the full list here on my blog by clicking the link to the 2009 Sundance Film Festival off to the left hand side or at the top of the page.

Also of note; Locals only tickets are now available for Utah residents.  For those of us lucky enough to fit into that category, all you need to do is:

1. Visit Sundance.org/festival

2. Register between Dec. 2 and Dec. 10th.

3. Watch for an email on Dec. 15th.  This email will contain a time slot for you to purchase tickets.  All locals-only tickets must be purchase in person at either the Salt Lake City or Park City box offices.

4. Buy tickets and gloat to your friends.

If you’re not lucky enough to be a Utah resident, you can still sign up for the Individual Advance Registration at the same link above.  The process will be the same, but your timeslot for purchase will be after the locals only slot.