An impossible Shangri-la
In August of last year, we wrote about the Jenson brothers' grand plans to turn a tiny, defunct ski hill in southwest Utah into a posh, exclusive mega-resort (see our story "An unlikely Shangri-la"). In building the Mt. Holly Club, the Jensons hoped to emulate the Yellowstone Club, the ultra-ritzy Montana ski and golf community.
But just a few months later, the Yellowstone Club declared bankruptcy and defaulted on a $315 million loan. This past May, the resort was sold for $115 million. Now, the Mt. Holly Club is indeed emulating the Yellowstone Club -- by following the same path to financial ruin. The projected 1,200 homes and condos never even broke ground before the tanking economy sent the project into bankruptcy. The decrepit ski area is now on the auction block for a starting bid of $1 million (its backers once estimated its value at $3.5 billion).
Jonathan Weber, publisher of NewWest.net, ruminated on the Yellowstone Club's demise last May:
The rich will always be with us, for sure, but in what quantities? To what extent will the contraction of the financial services industry, and the more progressive tax policies of the Obama Administration, diminish the pool of people who are able or willing to spend $5 million on a ski house at the Yellowstone Club?
In short, does the financial crisis represent a mere steeper-than-usual turn of the business cycle or a more fundamental structural reset?
The answer to that question will soon be clearly visible in the spectacular mountains of southwest Montana.
And now, the answer is also visible in the equally-spectacular mountains of southwest Utah.
High-end development woes
The vultures may also be starting to circle a high-end real-estate development in the spectacular mountains of central Colorado.
Known as the Friend Ranch, the development sits a few miles west of Poncha Springs (actually, thanks to some annexations, it's now inside the town limits). Its name comes from the Friend family, who raised prime Hereford bulls there for decades before selling to developers.
The main attraction was supposed to be an 18-hole golf course, although it also featured plenty of other amenities, from fly-fishing to a nearby ski area.
On Nov. 4 in Chaffee County, an excavation contractor filed a notice of intent to seek a mechanic's lien against the Friend Ranch Investors Group. The contractor, Hudick Excavating of Castle Rock, Colo., seeks $1,152,016.17 plus interest.
Typically, a contractor files for a mechanic's lien when he hasn't been paid as promised, and the lien, if granted, puts the contractor in line for some money if the property sells.
My spies at the courthouse told me that only two of the 140 homesites had been sold as of Nov. 10; list prices ranged from $119,000 to $485,000.
So it isn't just the super-glitzy projects that are stumbling in this downturn.