Zions bank sues city over demands on subdivision

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DRAPER -- Zions First National Bank is suing the city of Draper for $25 million. At the center of the dispute is the SunCrest Development on Traverse Ridge, which sits on the border of Salt Lake and Utah counties.

The lawsuit alleges Draper mismanaged the development, that it made "ill-advised" and often "illegal" demands on SunCrest, which essentially caused it to be unable to pay back millions in loans made by Zions Bank.

When something with the roads in SunCrest went bad, just who was responsible? Much of the fight between Draper and Zions Bank is over just that question.

"Road repair, road upkeep, snow removal; it's a long list," said Rob Brough, executive vice president of Zions First National Bank

The Zions' suit contends Draper was "poorly managed," overwhelmed by the size and scope of the development. It says the city required SunCrest to make repairs that were "excessive," including the replacement of 10,000 feet of concrete, and "falsely" posted information about road problems on its website, which "chilled potential buyers and developers."

A KSL 5 News story in 2007 documented the dispute: networks of cracks on Traverse Ridge Road, problems with fill materials and drains. Draper approved the roads; SunCrest built them.

"The city has geotechnical standards, and those were agreed on. The report from CMT Engineering indicates they may not have been built to those standards, and that's what we're reviewing right now," Draper City Manager Layne Long said in November 2007.

Also at that time, SunCrest's attorney Bruce Baird said, "The city did ongoing inspections. It was tested by independent testing laboratories the whole way. It was approved by the city. SunCrest didn't do anything wrong here. We hope that the problems can be fixed, but it's not SunCrest's responsibility."

Zions says it filed the suit as a last resort. It wants to resolve the situation and move on. "We're not real estate developers. Our intent is to market and sell this property," Brough said.

Citing the pending litigation, officials in Draper declined to comment Friday.

E-mail: jdaley@ksl.com

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