November 12, 2008 - Elim Valley, Hurricane UT

There are roads, landscaping, lighting and street signs. The only thing lacking in the first phase of the subdivision in the Elim Valley development is houses.

Located in Hurricane, the development's first phase is on the road to the Sand Hollow Reservoir and while there is still no building action going on, the development is doing somewhat better for now than some other developments that are on hold, maybe forever.

Southern Utah seems to be a magnet for large development plans as the area has seen in the recent past not only housing developments but resorts, golf courses and most recently, a proposal for a theme park in Toquerville offered.

Financial developer Richard Ramirez understands the attraction to the area for developers. Not only is there the natural beauty, but low crime rates, great weather and until recently, great weather.

"The Washington County area is like God's pocket," Ramirez said. "When I came here, I decided I wanted to retire here. I don't know what it is, but somehow this area embraces you."

Ramirez, the owner of RR and Associates, who does financial analysis to see if a project is profitable before going ahead, said some of the larger projects that have come to the area have great ideas and aspirations.

Developers come in with Plan A a pipe dream with all the bells and whistles -- Ramirez said, while Plan B- a nice subdivision with maybe a little retail- is easier to get approved by a municipality and more feasible as far as money.

"I think some developers get too far ahead with the dream without thinking about the demand or the access to money," Ramirez said.

The future of several large projects, primarily on the east side of Washington County, is in question.

An unidentified person answering the telephone for Collina Tinta in Hurricane said the project, which includes a golf course and Tuscan-inspired homes starting at $500,000, is on hold, but there are no homes and the golf course, although laid out, never was planted.

In Apple Valley, the Kokopelli Golf Course Resort has some grass planted but no one answers the telephone at the number listed on the Web site and a representative with Sun Realty said the Outlaw Ridge project is on hold right now with only raw land. Depending on the funding process, it remains on hold.

A movie studio/resort called the Sky of Dreams was also planned for Apple Valley, yet nobody associated with the project returns telephone calls and nothing ever was started on that project.

Ramirez said many times the developers of these large projects hire cheerleaders first, who come in hyping up the project before hiring the players, which Ramirez said is putting the wrong foot forward.

"There's a lot of hype to get people excited," Ramirez said. "But then often, the projects hit the brick wall called reality."

One large local project that is hitting that brick wall is Elim Valley.

The property encompasses 3,500 acres and on Monday, some of the property along with the development's 2,200 acre feet of water was slated to be sold at a foreclosure sale.

The sale was postponed until Nov. 20 as developers work out details with the finance company.

Chris Orchard, director of marketing and sales for Elim Valley, said the company has been working hard on the financing with Cypress group.

"Cypress has been very cooperative and trying to work things out," Orchard said. "Things are looking very positive and we expect to close on our first home on Wednesday and the home will be going up immediately."

As of Monday, the city of Hurricane had not issued any building permits for the development and building inspector Lance Gifford said the sale of the water rights would put the whole project in jeopardy.

Orchard said the project is still going full speed ahead despite foreclosure sales that the project is experiencing with the economy.

"We are staying very positive and it actually helps with the lot of gloom and doom and the economy Ð we are still a beacon," Orchard said.

The town square in the first phase has been completed and Orchard said within the next few weeks, Elim Valley will have town evenings on the square.

The company is planning to have a once-a-week gathering to get people out to start enjoying the community even before homes are built.

Elim Valley, a 2,500-acre master-planned community with amenities ranging from golf to equestrian trails, is the same property that was bought in 2001 for the Outlaw Ridge project, which never got off the ground.

Now the newest large-scale project to come to Southern Utah is a 1,600-acre theme park and school in Toquerville.

Ron Sinclair, chairman of Our World Family LLC., said he and his partner Dean Hawks had been looking for several years to locate a piece of property for the Our World Family International Cultural Exchange.

As a former Leeds resident looking to get back to Southern Utah, the property available in Toquerville along Interstate 15 was the ideal place for the school/theme park, which is modeled after the Polynesian Cultural Center in Hawaii, Sinclair said.

The $2 billion project, Sinclair said, would be funded by industrial revenue bonds and the benefits to the city would be sales tax revenue, access to services such as emergency services and employment opportunities without the park being a burden on services as it would have its own security system in place.

With so many projects now dead in the water, Ramirez won't predict if a theme park and school in Toquerville would draw enough business to keep business viable, but with the downturn of the economy and the slowdown of building in Washington County, Ramirez said land is a good investment.

"Now is a great time if you have money to burn to buy land," Ramirez said. "The price is about 60 cents on the dollar compared to two years ago."

Original story - TheSpectrum.com

Update 12/28/2008

Roland "Rollie" Walker, the owner of southern Utah's largest incomplete subdivision, is being forced to sell the trees to keep his project afloat. Creditors are posting foreclosure notices on his land, and banks are refusing to loan him money.

Walker's Elim Valley is by far the largest of the housing developments stopped in their tracts around St. George, once the second-fastest-growing U.S. metropolitan area. It is by no means the only one. Ivory Homes, Utah's largest home builder, says it's having trouble finishing its own subdivision when other lots around St. George are going for half as much. And many builders have been pushed into default.

"There's a whole lot of projects that are in deep trouble all over," said Alan Carter, owner of Southern Utah Title, who said he is handling a lot of "short sales" (properties that sell for less than the balance owed on a mortgage).

St. George's golf courses, wide-open public lands and national parks attract active residents who are looking for cheaper living in a mild climate. And while economists say St. George should pull out of the real estate recession faster than other regions, Walker says he needs new loans and buyers to step forward now, before creditors take over.

"There's no such thing as stop," said Walker, chief executive of McNeil Development, Idaho Falls, Idaho. "If you stop, you're dead."

Nearly 4 square miles in the red-rock desert, Elim Valley has been laid out with roads, utilities, sidewalks and streetlights. Walker has approval for "every square inch" of a dense New Urbanism-style community of as many as 10,423 homes.

But there isn't a single house to be found at Elim Valley, nor a sign any are being built.

Still, Walker is determined, even upbeat - "we're doing property tours every day" - hoping to salvage his company's biggest parlay into real estate, which he started at the peak of the boom in 2006. The next year, ANB Financial National Association, an Arkansas bank that invested heavily in southern Utah and initially financed his development, collapsed. It was taken over by the government seven months ago.

ANB's failure pulled the plug on hundreds of millions of dollars of housing projects in southern Utah, according to Southern Utah Title.

"Our problem is the instability of banks," Walker said. "As banks stabilize, we'll have the money."

The housing recession, though, is unlikely to end soon, predicts Jim Wood, director of the University of Utah's Bureau of Economic Research.

The market, Wood says, "is as bad as I've ever seen." The turning point came abruptly three months ago.

"September hit and it just stopped," he said. "Builders stopped building."

Utah is saturated with about 3,500 newly built and unsold homes, some half-finished. Around St. George, 550 of these homes are for sale, according to NewReach Inc., a Salt Lake City market research company.

Among overextended builders and developers, "there's a lot of grief," said Wood, who warned that the slump will last for at least a year if not longer. Utah's home foreclosure rate, now 1.5 percent, could double.

That is not what Ivory Homes wants to hear.

The home builder mapped out a subdivision called Hidden Valley Estates in 2006. Of the 1,072 planned residences, only 120 have been built. Just 37 sold this year. The possibility Ivory Homes might walk away was enough for the state, which leased the land for development, to lower royalty rates of up to 20 percent on home sales and make the houses less expensive. And it's not clear that will be enough.

Over at Elim Valley, a development that sprawls across 2,300 acres, Walker is haggling with creditors.

He owes his civil engineer around $300,000 and said he plans to pay it off - in trees. To make good on the debt, he agreed to cull his tree farm - 7,500 trees growing for up to two years, with 75 species from blue spruce to hardwoods.

"We really want him to succeed," said Kent Nobis, a principal for Rosenberg Associates of St. George, the civil-engineering firm owed money on Elim Valley. "For one thing, we get paid back."

But Walker also owes at least $10 million to a group of short-term real estate investors who aren't interested in a tree swap.

The investors are suing to recover money spent on land and water rights. Walker's lawyers have temporarily blocked a foreclosure in state court.

"We just want the money back," said Greg Walker, director of risk management for Cypress Capital XI LLC of South Jordan, Utah, who is not related to the developer.

"It's simply: We loan some money, take collateral. They pay it back, we return the collateral. We know the economy sucks. But we have a fiduciary responsibility to our investors," he said.