'Pointe' dream a nightmare

Dreams by a group of investors of a posh residential retreat overlooking Jordanelle Reservoir were dashed after their hired general manager allegedly absconded with hundreds of thousands of dollars.

The Pointe at Jordanelle, a 22-acre tract purchased in 1997 by 16 people for nearly $1 million, was supposed to be an upscale site where million-dollar homes took in commanding views of water and mountains.

Instead, investors were left staring at foreclosure as mounting debts ultimately led to a Chapter 7 bankruptcy filing and the sale of their land.

"It took me 15 years of hard work to put $314,000 away after taxes. . . . My impression is this type of thing happens many times out here in Utah and they let people off," said John O'Loughlin, a Florida resident who lives in Midway part of the year and who invested in The Pointe.

Located in Wasatch County near the northwest shores of Jordanelle Reservoir, The Pointe at Jordanelle was seen by many investors as too good an opportunity to pass up.

Other resorts and pricey enclaves in the area had already begun to materialize. Nearby was Deer Crest — a ski-in, ski-out development tied to Deer Valley — where half-acre lots sold for an average price of $1.1 million.

A limited liability corporation was formed for The Pointe, and investors paid cash for the land, each buying one or more shares at $38,000 apiece.

They chose real estate broker Douglas S. Adams, a Holladay resident, to act as general manager of the corporation and developer of the property.

Adams knew the area well. He had worked with investors on other property deals in the area and eventually served as secretary and treasurer of the Jordanelle Basin Owners Association, a group representing property owners and developers.

What they didn't know was that Adams would eventually be charged with multiple felonies in one of those other Jordanelle land deals. And they also did not realize that Adams would obtain a $572,000 loan against The Pointe property and secure it with a trust deed.

"We knew about none of the loans," said Gordon Ostrum, a New Jersey resident and secretary of the management committee who invested $57,000 in The Pointe.

The loan, investors maintain, was in violation of the company's operating agreement, which prohibited the general manager, without a written resolution by the management committee, to bind the company to any sale or incur indebtedness by way of mortgage or trust deed.