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DRAPER - Zions Bank has filed a notice of default on the developers of the tony mountaintop SunCrest master-planned community.
Documents filed with Salt Lake County say SunCrest LLC has failed to uphold its loan agreement.
Among other things, the documents allege SunCrest has not paid real estate taxes or for services, labor and materials provided for construction of improvements.
Ed Grampp, the local head of the project for Terrabrook, the parent company of SunCrest, said Friday that he could not comment. Likewise, SunCrest's attorney, Bruce Baird, declined to address the issue. Calls to Terrabrook's Texas offices were not returned.
Default ''is the first sign that you're not doing well," said Salt Lake County Recorder Gary Ott. On an individual level, such notices would spur people to do a panic refinance of their home or sell their car.
He said that many people come out of default on their homes, "but this one is big. Most [defaults] are one short page. This is 25 pages - and there are two [documents]."
Developers pitched SunCrest as the high-altitude project, encouraging buyers to "live above it all."
It's unclear whether the firm will back out or renegotiate terms with the bank.
The default notice is one more problem it faces. It has been hit with lawsuits by nearby landowners and has long been at odds with Draper City over a slew of issues.
For example, the city has hardened its geo-hazards ordinance and had been asking SunCrest to do more to protect homes and infrastructure from potential landslides along steep Traverse Mountain.
That came after geo-technical specialists warned that water runoff and other elements could trigger ancient slides and potentially send homes and infrastructure careening.
And some Draper officials had been particularly critical of roads leading through the development. An independent engineering report showed some streets were supported by substandard and inconsistent materials.
Rumors had been flying through SunCrest in the past week about the developer's future.
A prominent online and neighborhood group called SunCrestResidents.org sent e-mails and posted an announcement on its Web site saying the developer would leave at the week's end.
An optimistic group leader, DeLaina Tonks, speculated that residents could be better off if Terrabrook bails. She alluded to the confrontational city-developer relationship that appears to be hurting homeowners.
Said husband Paul Tonks: "The developer doesn't have much to do with our day-to-day lives . . . We don't think our lives will be greater or worse in any which way."
But the default notice - filed on Wednesday - raises questions in at least one potential buyer's mind.
Steve Fischer said he has been considering buying a plot in SunCrest's Canyon Heights area for the past six months, but was hesitant on account of landslide concerns and road problems.
The uncertainty from the default, he said, just compounded his concern.
If people ''were concerned about SunCrest after doing their own due diligence before, they should be even more concerned today," Fischer said. "People will be reluctant to invest in any property until this shakes itself out - unless there's a 'smoking deal.' ''
Questions still to be answered, such as what happens to the unfinished recreation center and an existing neighborhood market, which has been under contract with the developer? The rec center was scheduled to open this month.
City Councilman Bill Colbert, who lives in SunCrest, said these kinds of problems happened with a South Mountain developer years ago, and the city is still picking up loose ends, such as landscaping issues.
But he said Draper would work through this and negotiate with whomever ends up with the property.
* SunCrest, launched in 2001, has 1,000 homes, which represent less than one-third of the planned community that spreads over 3,900 acres.
* Developers originally planned to build 3,600 homes.