This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Draper's SunCrest community soon will belong to Zions Bank, pending a judge's approval.
Zions outbid two other companies elbowing for the high-profile, 3,600-acre community with about 1,000 homes atop Draper's Traverse Ridge.
The bank will cough up almost no cash for the takeover.
Because the bank had issued the majority of SunCrest LLC's $58 million in defaulted loans, Zions instead made a "credit bid." That means in exchange for assets, it will forgive the developer's debt, which is in the neighborhood of $40 million.
Zions, however, might have to dig deep to correct issues in SunCrest's master-development agreement with Draper.
That could cost from $11.6 million to $20 million to bring the SunCrest community back into compliance with that agreement. Those costs would cover infrastructure improvements, such as adding parks and trails, finishing a club house and a water system, plus erosion mitigation.
SunCrest LLC filed for Chapter 11 bankruptcy in April, citing difficulties from the housing crunch. The project also had long-wrestled with the city over storm-drainage, roads and landslide issues.
But Draper's city manager, Layne Long, said Monday that it's important for the city to have a close working relationship with Zions Bank.
"This is a complicated project, and it will take a lot of work and effort on everyone's part to address and correct the existing problems," Long said.
Marketers and attorneys close to the case said they could not disclose names of the two other bidders, nor the amount those bidders offered for the scenic property.
Draper landowner Dave Mast - who has sued SunCrest over several issues, alleging that the development hurt his adjacent land - already has filed an objection to Monday's auction. That action could slow down the sale.
A SunCrest attorney removed Mast, two of his attorneys and a Salt Lake Tribune reporter from the auction meeting, reasoning it was open only to qualified bidders. The session then continued in a glass-walled room as major players shuffled in and out, making phone calls and conducting hushed meetings with various splinter groups.
But after seeing that Draper representatives were attending, Mast and his attorneys returned 35 minutes into the auction and called foul. SunCrest's Dallas-based bankruptcy attorney, Bill Wallander, offered to let Mast and one attorney in - as long as they did not speak.
Mast refused, walked out and filed a formal objection.
Objections to Monday's SunCrest bankruptcy auction must be filed by 3 p.m. today. The sale hearing is scheduled at 1:30 p.m. Wednesday before Judge William Thurman in the local branch of the U.S. Bankruptcy Court in Salt Lake City.