Development News

Resort Bankruptcies

Moonlight Basin, the troubled Big Sky, Montana ski resort, filed for Chapter 11 bankruptcy protection on Wednesday, just a day before a foreclosure hearing that could have put the property in the hands of its primary lender, Lehman Bros. Moonlight took a loan of $100 million from Lehman Bros. in the fall of 2007 with the intention of quickly selling the resort, but the real estate meltdown scotched that plan, and the bankruptcy of Lehman Bros. itself in the fall of 2008 has left the six-year-old resort in limbo.

In the bankruptcy filing, Moonlight seeks permission to obtain $21 million in interim financing from Trilogy Capital, a Connecticut based hedge fund, which would enable Moonlight to remain open and have a ski season as planned. Lehman Bros. indicated in the foreclosure case that it also intended to keep the resort open, but the investment bank wanted to gain full control and appoint a receiver in the place of current management before it provided the funds needed to continue operations. The foreclosure proceeding, which is a state court action, is automatically put on hold by the bankruptcy filing.

[more]

Boom and Bust

Like the residential real estate bubble, the commercial real estate boom of 2003-2007 was fed by cheap money and lax lending standards. Institutional investors such as hedge funds and insurance companies - strangely blind to the possibility that real estate values could decline - had an insatiable appetite for any loan that had a decent interest rate and was backed by real estate. When the rosy projections on cash-flow for apartment complexes, office buildings, shopping malls and resort hotels were revealed to be pipe-dreams when the market turned, the carnage began - and it’s likely to continue for a while, according to a recent report from the Urban Land Institute and PricewaterhouseCoopers.

[more]

From the Panhandle With Cate Huisman

What stands out from the “first annual” Economic Outlook Forum that was held in Sandpoint Thursday is the extent to which the panhandle continues to grow away from its roots in the timber industry. This process has been going on for decades, but the current recession and concomitant implosion of the real estate market have hastened the transition. While logging and milling employed over 1100 local people in January of 2006, that number had fallen to less than 500 by January of 2009.

For a while, mills laid off workers, cut shifts, or shut down for a few weeks at a time. But in October 2008, JD Lumber permanently closed its mill in Priest River, and Idaho Forest Group ceased production at its mill in Laclede two months later.

[more]

Book Review

A coworker once quipped that a good study is one where the researcher’s stand on the issue  is hard to determine. This coworker then offered up Kristin Luker’s Abortion and the Politics of Motherhood, an especially even-handed study of activist supporters and opponents of abortion, as a good example. An analogous measure of quality, I think, might be whether a researcher with little personal experience of the subject under study can observe and describe that topic sensitively and well.

Take the new book Hollowing Out the Middle: The Rural Brain Drain and What It Means for America by sociologists Patrick Carr and Maria Kefalas. Admitted urbanites whose original research agenda didn’t include a detour through the country, Carr and Kefalas undertook an ethnographic study of youth pathways to adulthood in a pseudonymous small Iowa town, “Ellis.” But if you didn’t read their confession about not being rural residents themselves, you probably wouldn’t be able to guess it.

[more]

News Nugget

Once hailed as the Utah version of the posh Yellowstone Club, the Elk Meadows development near Beaver has followed a similar fate and is now on the auction block.

As the Salt Lake Tribune reported earlier this week, the development near Beaver, which was supposed to have all the amenities of the high-end resort market of earlier this decade: Jack Nicklaus golf course, private ski runs and extravagant second homes, was once worth $3.5 billion, but is now in an online auction with a suggested value of $5.15 million. But, the starting bid is $1 million. As Jodi Peterson notes on the High Country News Goat blog, (HCN, by the way, did a good story on the resort in 2008, which you can read here) in May, the Yellowstone Club was sold for $115 million.

The original developers, the Mount Holly Partners, filed for bankruptcy this summer, but in the face of objections from one of the resort’s investors, MHU Holdings of New York City, the bankruptcy was rejected and Mount Holly turned the property over in foreclosure proceedings.

[more]

Montana Property Taxes

In late summer and early fall, many Montanans were unpleasantly surprised to receive notices telling them their property values had skyrocketed. The reappraisals, due every six years from the state Department of Revenue, meant their property taxes would take a big leap forward, too. In areas like Gallatin and Flathead counties, where the 2002-2008 period saw a dramatic real estate boom—followed by a bust—some property values increased 300 percent or more.

But there was hope for people feeling the pain. First, property owners could seek relief by appealing their appraisals, either by asking for informal reviews from the Department of Revenue (DOR) or by appealing directly to their County Tax Appeal Board. Second, local governments could decrease their mill levies, the formulas that actually determine how much property tax residents pay.

Here’s a look at what’s happened on those and other fronts, according to the DOR.

[more]