Hundreds of USU students scrambling for housing after developer fails to finish complex. Robert Gehrke has the story.

Students and parents say the owner has gone silent on housing project that was supposed to open in less than a month.

A few weeks ago, Jake O’Neal and his daughter traveled from their home in Monument, Colo., to visit the Utah State University campus where she will start her freshman year at the end of this month.

They were surprised to discover the apartment complex where she planned to live a short walk to campus wasn’t finished. Not even close.

“There was no work being done, and you could clearly tell the building wasn’t ready,” O’Neal told me Friday. “Nobody was in their office. Nobody was answering the phone. So we said we’d better start looking into this a little closer.”

What they got was a runaround. With his daughter scheduled to move in Aug. 23, the scramble started to find a backup plan.

She is not alone.

Right now incoming USU students are frantically trying to find other housing options after the 800 Block apartment complex, which promised housing for 374 students this year, remains incomplete and is at least weeks and possibly months from being finished.

(Francisco Kjolseth | The Salt Lake Tribune) Robert Gehrke.

Ben Anderson, the chief building officer for Logan City, said he doesn’t know when the 800 Block will be done. One entire wing remains under construction and, because of the layout of the building, he said the city won’t issue an occupancy permit for a partially finished structure.

“I wouldn’t say it’s going to be [done] before school starts,” he told me.

Anderson’s office has been getting calls from dozens of worried students and parents, and the office sent them to the contractor and developer, Nelson Partners Student Housing, but he said they have not been answering calls or messages.

“I wish they’d just be honest with the people who were counting on it,” Anderson said.

The lack of communication is Kami Stewart’s frustration. Her son paid the $100 deposit and signed a lease back in April, at which time they were told more than 100 leases were being signed.

The newly built complex promised spacious, furnished rooms, a hot tub and fire pit, terrific rooftop views, garage parking and — the point promoted most prominently on the building’s website — it was just 27 feet from campus.

But last month, Stewart followed up to ask about move-in dates, apartment assignments and so forth, but never heard back. “We were disappointed to see that the apartment building is far from ready,” so they started looking for a fallback.

It wasn’t easy for either Stewart or O’Neal, with housing already tight and now a flurry of students hurrying to find something. Stewart’s son was able to buy out another lease. O’Neal’s daughter got on a handful of waiting lists before jumping on an apartment, sight unseen, as soon as it posted.

“We still haven’t had any communication from 800 Block or the owners, Nelson Partners, which is frustrating and unprofessional,” Stewart said. “I feel like we would have been understanding about a construction delay or something if we were made aware. But a complete lack of information is unacceptable.”

Neither the contractor, nor the developer — Nelson Partners Student Housing — returned my call, either. Patrick Nelson, the CEO of Nelson Partners, it so happens, is a USU alumnus.

The 800 Block isn’t the only building where Nelson Partners is embroiled in controversy.

In 2015, Nelson promised students they could move into The Factory before school started but left them in the lurch when the building wasn’t completed, according to a report in The Utah Statesman, USU’s student newspaper. Nelson told the paper that several of the subcontractors and vendors walked off the project without notice, although several of the companies sued Nelson in 2014 and 2015 claiming they had not been paid for their work.

“I know we’ve lost a lot of people’s trust, but all we can do is work really hard to get everything done and earn people’s trust back,” Nelson said at the time. The building opened early the following year.

And last month, The New York Times wrote about a lawsuit filed against Nelson Partners over another student housing project, Skyloft Apartments near the University of Texas at Austin.

The luxury student apartments with a rooftop pool and other amenities were to be built with a $66 million bank loan and a $35 million bridge loan from a hedge fund, Axonic Capital. The bridge loan was supposed to be repaid from $75 million raised from investors.

But the investors’ lawsuit alleges Nelson made a side deal kept secret from investors that allowed Axonic to take over the property if it wasn’t repaid. In May 2020, after declaring the project was in default, Axonic took over the property and sold it in December 2020 to another developer, leaving investors with a stake in a trust that no longer held any property. The investors allegedly didn’t find out about the sale until weeks after it was completed.

In court documents, Nelson’s lawyers deny that investors were kept in the dark and said they were aware of the risk. Nelson Partners is also suing Axonic in Texas state court, fighting to reclaim its stake in the property.

In a statement to The Times, Nelson blamed the current financial hardship on the coronavirus pandemic and Axonic, who he said “duped” him out of the property.

In Logan, meantime, calls have started coming in to USU about the 800 Block project, which the university doesn’t have any control over.

Recently the school sent an email to students, encouraging them to check on the status of their housing, according to university spokeswoman Emilie Wheeler. She said the school contacted Nelson Partners and was told the building is just a few weeks behind schedule. There is no word on how many leases students had signed.

The university’s housing office is doing what it can to find additional space on campus, she said.

O’Neal said when he calls Nelson Partners, he gets transferred around until he’s hung up on or he ends up in a voicemail of someone who never calls back. He assumes the deposit he put down to secure the unit is probably gone, at this point.

“We’ve heard from dozens and dozens of people who said, ‘I’m in the same boat,’” he said. “To not have communication with families and students they sold leases to is just tragically bad.”

This story has been updated to include the reference to The Factory not being completed by the start of the 2015 school year.