Ogden » Growing impatient with the California developer of the proposed Ogden Riverfront Project, the municipality began demolishing eight rundown houses this week along Grant Avenue .
Gadi Leshem, who owns the California-based Cover-All Flooring Inc., envisions a multiuse project along the Ogden River to be called Renaissance Village. It would include a hotel, condominiums, restaurants and shops.
Cover-All Flooring Inc. filed for Chapter 11 bankruptcy protection earlier this year.
Leshem -- and the Ogden Riverfront Development Co. he heads -- earlier issued a statement saying the bankruptcy does not hinder Renaissance Village's development.
The flooring company and the Ogden Riverfront Development Co. are separate entities and one does not affect the other, Leshem has said.
Nonetheless, this week Keith Morey, Ogden's community development manager, said the city wants to proceed with the demolition to keep the Riverfront Project moving forward.
"We're hoping to plan in a way that can keep something happening," he said for Leshem or, perhaps, another developer.
The cost of the demolition work, $42,500, will ultimately be borne by the landowner, Morey said. The city will place liens on the property to ensure payment.
In January, Morey had said that Ogden was looking for a partner for Leshem so that demolition could get under way.
A spokesman for Leshem said development along the Ogden River is being delayed by the slumping national and regional real estate market, not Cover-All Flooring's bankruptcy.
"The project is moving slower than it would have two to three years ago, during the boom," said Alex Auerbach. "It would be foolhardy now to start building condos, restaurants and hotels that would stand empty."
Also, Auerbach said Leshem was working closely with Ogden and that it is more cost-effective for the city to demolish the structures.
"The city has not grown impatient" with Leshem, he said. "The city and the developer are working closely together."
But City Councilwoman Amy Wicks said Leshem appears unable to move forward on the proposed development. Further, she noted, the city hasn't budgeted any money for the demolition.
"My concern is, we've somehow selected this person [to develop the project] and gave him preferential treatment. And now we're left holding the bill for the demolition."
According to filings in U.S. Bankruptcy Court:
Cover-All Flooring Inc., which contracts with Home Depot to install carpet, owes Bank of the West more than $9 million.
Owes 731 other creditors a total of $25 million.
Lists as "disputed" a debt of nearly $7 million to the Internal Revenue Service.
Also disputes a debt of $5.34 million to California Workers Compensation Fund.