Ignore That Man Behind the Curtain

Utah Business Magazine periodically has roundtables of leaders from a particular industry to discuss the issues facing that industry, to confirm with each other how great things are going, and to provide copy to fill white space in the magazine. This month it's banking leaders discussing subprime mortgages. They seem to think the subprime mess won't affect Utah much and may have already passed through. Of course there apparently wasn't anybody from Citigroup to talk about the 900 local jobs Citi is cutting due to its multi-billion dollar losses. And there apparently wasn't anyone there from Bank of America to explain how BOA intends to manage having to swallow Countrywide Financial in order to cover its own losses in that train wreck (Does anyone else remember First Security buying up American Savings & Loan? Is First Security still around?). And although Jeff Thredgold from Zions does most of the heavy lifting in the article, he is strangely silent about how Zions is going to handle having to pull Lockhart Financial back onto its books and how many other such booby traps are out there.

These guys aren't analysts. They're just the dance band on the Titanic.

Draper Daze

The finger-pointing in Draper just never ends. Somebody under-engineered just about everything up on the ridge, and the developers and the city are busily blaming one another (Given how many people have been allowed to significantly encroach on city property over the years, it's a safe bet that the city is at least guilty of lax enforcement.). It seems that one and all have just learned that South Mountain is just about entirely made out of sand and gravel (Gee, folks, ya think that might be why all those gravel pits have been there for the last 100-odd years?). Draper has tightened its hillside building restrictions (and we'll see how well they're enforced) and intends to put a marker up there giving everyone notice of the geologic hazards (to the great joy of everyone who is now trying to sell), but it's too late. The damage is already done, and there's only one thing that's certain: Fixing it is going to be expensive.

Rebecca Walsh chimed in on this in the Trib yesterday. I would add to her comments that Draper is far from unique and that it was its small-towness that made this possible. Back-slapping log rolling like this is only possible in a small town. The city fathers didn't let these developments slide (pun intended) for the benefit of developers; they did it for their good-old-boy friends and neighbors who wanted to sell out. Draper, like thousands of other small towns, is learning what reaping the whirlwind is all about.

Standard Operating Sleaze

On Friday the last theater at Trolley Square closes. ScanlonKemperBard, the mall's owner, claims that was part of the plan from the start. The Trib can find no sign that was ever part of the plan. I'll go farther: The developer is lying. That may have always been part of the developer's plan, but it was never publicly voiced. To show just how serious a stealth mode SKB was operating in, just last week there was still a help wanted sign on the movie marquee. I'll miss the art film venue, but I've always seen that the theater wasn't supporting itself, so I can understand the business decision. What bothers me is what else SKB may be hiding and why no one is asking about it.

Meanwhile in Holladay, General Growth Properties, which is redeveloping the Cottonwood Mall, is successfully holding the city and school district ransom until it gets a pile of tax dollars to pay for the project. The threat is that GGP will simply take its ball and go home, leaving Holladay with the biggest derelict building in the state at its core. And the city is shocked, SHOCKED to have this happen, even though it happens every time (The school district is in a better position to claim ignorance because schools in Utah are statutorily excluded from the development process, which also helps explain school overcrowding.).

It's long past time for local governments to grow up, folks. If a city wants a big development so it can pretend to be a big person, it needs to do big person work. That includes nailing the developer down on what the plan really is, however much it may seem like nailing Jello to a wall. It includes getting a decent audit of the project financials up front to make some kind of reasoned determination of economic viability. And it means expecting the developer to come begging for public funds and deciding how to address it from the start.