Bank Forecloses On New Condominiums

Bank Forecloses On New Condominiums

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OGDEN, Utah (AP) -- A bank is foreclosing on all but eight of 44 new condominiums in an award-winning development on Historic 25th Street.

Eight of the units had been sold. The other, unsold, units have two years of unpaid property taxes and will be sold at public auction.

First National Bank of Layton, lender on the Union Square project, recently announced the March 3 foreclosure sale.

Proterra Cos. of Salt Lake City, developed the $3.8 million project, consisting of 14 street-level retail units, 14 residential units above and 16 units on land behind the storefronts. The units were completed in July 2003.

In 2002, the project received the Envision Utah Governor's Quality Growth Award for excellence in design.

"This is new to me. I'm not used to having projects that don't work. We've never had one that stalled like this," said Gerry Tully, executive vice president for Proterra.

Union Square Associates LLC, formed by Tully and three other investors, owns the properties.

"We wish there had been better success on that project," said Mayor Matthew Godfrey. "We worked with them. We were partners in making it happen."

Godfrey was not concerned about the effect the foreclosure could have on the future of Historic 25th Street.

"I don't know it will affect it either way," he said. "The units are going to go to someone else and they'll be sold."

Godfrey was optimistic about the city's recovering a $675,000 RDA loan to the developer, although he did not know if all scheduled payments have been made.

He said the loan was tax increment money rather than taxpayer funds.

"It's not the people of Ogden who will be out the money," he said. "The money is generated by developers and given back to developers as an incentive."

In addition to the $675,000 city RDA loan, another $998,000 came from Community Development Block Grant funds and $250,000 from housing funds.

Shannon Krueger, a co-owner of Sell-n-Mail, one of the few retailers in the storefront condos, said, "For us to be successful, we did need these (retail units) to sell. I don't think it will make it more difficult for us to grow, but on the flip side, it might have made it easier for us to grow if this hadn't happened."

Krueger said business has been OK and improving since the store opened in November.

The residential units range in price from $126,500 to $155,000, while the combined retail/residential units on Historic 25th Street have a sale price of $230,500.

After the auction, Proterra and Union Square Associates will drop out of the picture. However, Tully and his wife have purchased one of the residential units.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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