Developer gets another chance on Ogden River project

Utah Land

OGDEN — Ogden City is giving a developer who failed to meet construction deadlines for a new downtown subdivision another chance.

The city’s redevelopment agency, which is made up of members of the city council, recently approved amendments to a land transfer agreement that will put an ongoing foreclosure process on hold and allow a major development project to continue under a new set of guidelines.

In May of 2013, the Ogden Redevelopment Agency entered into an agreement with Ogden 20th Street Investors that set terms and conditions for the transfer and development of approximately 17 acres of land within the city’s River Project Redevelopment Area, a mixed-use development project encompassing about 60 acres along the Ogden River from 18th to 20th streets and Washington Boulevard to Wall Avenue.

Phase one of the 17-acre development consists of a 148-unit multi-family apartment complex, which will be known as the Ogden Riverbend Apartments, at the northwest corner of 20th Street and Grant Avenue.

According to the land transfer agreement, Ogden 20th Street Investors — an entity made up of developer Gadi Leshem and partners, R & O Contraction, and PEG Development — were required to begin “meaningful and visible” construction on the project by Nov. 24, 2013.

Brandon Cooper, Ogden’s deputy director of Community and Economic Development, said when that date came and passed without any construction, the original agreement automatically terminated and the city accelerated the payment of a $637,000 Secured Promissory Note that was obtained by the investment group and recorded as a lien against the project.

A foreclosure process that could allow the city to regain and sell all the land associated with the project began in May.

But 20th Street Investors say they have worked through some initial kinks and can complete the project under a modified performance agreement. The group has asked the city to delay its foreclosure action and give them until Oct. 14 to begin site work on the project. After the site work begins, the group will have 18 months to complete the project.

Soren Halladay, director of Peg Development and part of the investment group, said that as the group has tried to finalize the project and bring it within budget, the group ran into problems with several construction and design guidelines involving exterior brick surface, planter boxes and balconies.

Based on a recommendation from the planning commission, the city council also voted to approve several amendments to design requirements related to the developers’ requests.

Cooper said the new agreement is in the best interest of the city because the 20th Street group still has the capability to finish the project in manner that fits the city’s redevelopment plans.

Leshem is a California businessman who has been heavily involved in helping the city redevelop its downtown river area. In 2008, one of Leshem’s companies, Cover-All Flooring, settled a felony insurance fraud case by pleading no contest. All criminal charges were dropped, but Leshem was required to pay $6.3 million in back worker-compensation premiums to California’s State Compensation Insurance Fund.

Contact reporter Mitch Shaw at 801-625-4233 or mishaw@standard.net. Follow him on Twitter at @mitchshaw23.