Zions Bank is suing Draper
Failed SunCrest development sparks its $25M lawsuit
A bank that once served Draper's financial needs is now suing the municipality for $25 million over allegations the city hampered the progress of the half-finished SunCrest development.
In a lawsuit filed this month in 3rd District Court, Zions First National Bank also accuses the city of sabotaging buyout deals with potential developers.
Zions Bank bought the development for $25.3 million in a bankruptcy hearing one year ago this week with the intention of selling it as quickly as possible to help recoup losses.
When SunCrest finally failed two years ago, it left about $40 million in unpaid loan debt to Zions Bank on its path to bankruptcy.
The city strongly opposed the bank's ownership from day one, but the already estranged relationship between the city and bank grew more strained when a near deal to sell the development fell through in December.
On the eve of a tacit sale, the bank's potential buyer, Raddon Bros. Construction, pulled out and faulted city staff for bringing up infrastructure issues at the last minute that made the purchase no longer financially feasible.
Draper city manager Layne Long denied surprising Raddon Bros. with any 11th-hour requirements at the time and said the contractor's concerns were always part of the negotiations.
In apparent reprisal, Zions Bank hand-delivered a letter to Draper a week later saying the city had 30 days before all of its deposits, savings accounts, credit cards and payroll functions were terminated.
Now, Draper has until the first week of July to respond to the lawsuit, for which a jury trial has been demanded.
Draper spokeswoman Maridene Hancock said city officials were not available to respond Thursday.
Nine days after Zions Bank filed suit, a jury in a separate case awarded a Tooele developer $20.7 million because it was determined Tooele city had obstructed the developer's progress and breached contractual duties.
E-mail: jhancock@desnews.com
Recent comments
I was in Draper City Hall recently and asked about the situation....
Andrew | June 26, 2009 at 2:15 p.m.
Seriously Draper, why do you keep sabotaging this situation. You...
South Sam Hill | June 26, 2009 at 12:46 p.m.
Sounds like a great plan, except that governments need checking...
Re: Atlas | June 26, 2009 at 7:56 a.m.
- Holiday television program listings 1:02 a.m.
- Williams, Rose celebrate by playing 12:46 a.m.
- Utes to get tested by Illinois 12:40 a.m.
- Cougs to host Weber St. 12:39 a.m.
- Efforts to save a life praised 12:29 a.m.
- Settle fights, set tone of marriage 12:28 a.m.
- Clearfield balking at UTA plan 12:26 a.m.
- New administration bldg for Davis 12:26 a.m.
- Gallery: Thanksgiving in Utah 12:14 a.m.
- National news briefs 12:12 a.m.
- Man trapped in Nutty Putty cave dies
- Rivalry has had some 'turkeys'
- Holiday television program listings
- Highland players make special friend
- Temple Square to use LEDs
- Salt Lake City woman shot
- Matt Reynolds vs. Koa Misi
- Provo star leads Bulldogs to win
- Missions teach players perseverance
- Cave rescuers committed to free man
- BYU would like friendlier rivalry
262 - Protests against Phoenix LDS temple
211 - RSL wins MLS Cup on penalty kicks
202 - Bronco, Kyle rubber match
139 - Thunder rolls by Jazz
136 - Letters: Rushing to judge Palin
132 - Boys basketball rankings
117 - Editorial: Poor welcome for Palin
112 - Hall, Johnson matchup key
102 - Man trapped in Nutty Putty cave dies
98
Can someone please tell me which top 10 team Max has won? I hope the Jeff...
The old recipie for good economy is to just cut taxes to spur investment and...
Respect? Why show respect for another human being who's opinions and...
The problem is, Sarah Palin ist not a competent politician. She begs to be...
Please do tell which of his facts were stupid? Your best ever got smocked at...
Honestly. Kyle cannot be moved with the contract. I would rather see CJ<...
So many conclusions, based on false assumptions, so many haters, with...
If Carlos continues to play like this instead of hearing "boo" at ESA, maybe...
With all that tradition they can't seem to compete on the national stage....
Hint: You notice (like I predicted) no mention of any Jazz interest in...


