Coyote TV - High Desert Advocate

Silver Leaf principals Ethan Day, Norm Subert & Walt Sanders at the project's groundbreaking last spring.

                 Barring an unforeseen miracle the Silverleaf project could be foreclosed on by its principal creditor as early as this week, confirmed project partner Norm Shubert.
    “It will be a friendly foreclosure,” Shubert explained. “They (the creditors) will not immediately change the title to the land and we hope and are confident that in the coming months we will be able to get the backing to go forward. However as anyone can attest to under the current fiscal climate there are no guarantees.”
    The project is being foreclosed by a Salt Lake area blue chip hedge fund whose membership is limited to investors with at least $1 million in liquid assets, Shubert explained.
    According to a Silverleaf press release, Private Capital Group, the short term lenders for the planned development of the property owned by The Spirit of Wendover will be foreclosing on that property on Thursday, January 29th.  The Spirit of Wendover has been unable to arrange permanent funding for their project which was to include residential housing, apartment units and commercial space as well as a Hotel and Casino .  The Spirit of Wendover too. has become a victim of the financial crises faced by most businesses and enterprises in America.
     “We have been and continue to seek,  the financing needed to make The Spirit of Wendover a reality”, Norman Shubert said.  “The 390 acres isn’t going anywhere and The Spirit of Wendover continues to be the logical developer, if and when that does happen.  We have spent 2 years working with various government agencies who are positive about the many needs for West Wendover.  There are programs for which The Spirit of Wendover project does qualify and we are in the process of applying for government support.  With government support there are several funding sources available.  The bottom line is that we are still alive and trying to get our project going.”
    Signs that the project was being hit hard by the national credit meltdown began to show this summer when previous sources of lending suddenly dried up. Coupled with the national lending crisis Wendover’s strict development bound requirements enacted ten years ago in the wake of the failed Kassuba Development put a heavy burden on the project.
    Before Kassuba, the city had a more or less “pay as you build” performance bound stipulation to prospective developers but with the failure of the Kassuba project West Wendover mandated that performance bounds for entire projects be submitted to the city before any part of the project construction began. For Silverleaf that meant developers had to prepay some some $1.5 million, the cost of municipal improvements for its entire residential development.
    While the motive behind the new requirement was to ensure that projects would be completed, the unexpected consequence may have been to squelch new building altogether.
    In the last five years there have been less than a dozen new building permits issue and no permits for large residential developments.
    Before the credit meltdown, Silverleaf developers thought they would have little trouble in securing a bond for that amount. But as bank after bank succumbed to toxic bad debt and as the stock market lost about a third of its value, that expectation proved false.
    The company purchased two of the empty lots on the uncompleted Fairview Estates subdivision.
    “City ordinances require us to by a performance bound for the entire 53 houses slated for the first phase of the subdivision while as little as a year ago that would not have been a problem the national meltdown of the (real estate) credit industry along with Wendover’s reputation as an unproved market is causing us some unexpected delays” Day explained. “So we purchased the empty lots in the Fairview Estates which already has all its infrastructure and we can begin building immediately.”
    Construction on the project’s model home did begin, but developers were put in the impossible position of having to complete it before they could get more funding, but without additional funding they could not complete the house.
    While disappointed Shubert was cautiously optimistic that the project in some form or another would be completed.
    “No one could have foreseen the economic collapse,” He added. “but our project is sound and when the dust settles I hope we can continue.”