If Provo were the setting of a superhero comic strip, then this would be the part where Superman swoops down from the sky and saves the city from losing its reputation as a prosperous place to live.
At least that seems to be the case, now that Victor Borcherds - a businessman living in Alpine - has announced that he is in the final stages of negotiating the purchase of Provo's Excelsior Hotel.A year ago, Borcherds played the Man of Steel, saving Provoans from losing their dreams of Heritage Mountain when he bought the resort out of bankruptcy. Now he plans to combine the Excelsior and Heritage Mountain into one project.
According to Mayor Joe Jenkins, Borcherds' offer for the hotel became acceptable to the city after several revisions. Only the legal aspects of the sale remain on the table.
Numerous lawsuits have been filed by hotel bondholders, and before the hotel can be sold, a judge must determine whether the sale is fair to all parties. A judge in Philadelphia is expected to rule on the sale Aug. 1, Jenkins said.
Property taxes on the hotel have not been paid since the Excelsior opened five years ago. More than $850,000 in back taxes must be paid to the city by November.
If the hotel is not sold now, it will have to be sold at a tax sale because the city needs the money to pay for tax-increment financing used to build the city-owned garage next to the hotel, Jenkins said.
"From the city's perspective, we really came out quite good," he said of the proposal. "First of all because the hotel has been sold (in principle) to an entity that is keeping it open and operating on the same basis. Second, the hotel did not close down, and third, the lawsuits are satisfied."
Jenkins said if the city and bondholders had gone to court, "it would have eaten up hundreds of thousands of dollars in legal fees and only the attorneys would have come out ahead."
Jenkins said the city is also pleased with Borcherds' scaled down version of development at the Heritage Mountain resort.
Borcherds' intention is to have a water park built and ready to open next Memorial Day. As soon as forest service permits are obtained, construction on phase two at Heritage Mountain will also begin.
Phase two includes a ski resort, which features a funicular transportation system capable of moving 4,000 people per hour to an altitude of 7,700 feet. A restaurant and small hotel and convention center - located at the top of the mountain - are also part of the plan. The ski resort will include five chair lifts and a ski school.
Developers have worked since 1959 to find money to build the multimillion-dollar resort, Jenkins said, but Borcherds Heritage Mountain project "stands a better chance now than it's ever had in reality because the project is scaled down to where it makes economic sense."
Borcherds told council members in a study session this week that he believes he has the financing to build the resort. Four insurance companies, including Borcherds' Southern American Insurance Co., are financing the $35 million project.
"We have done a feasibility study and found that we don't need any real estate sales to make it work," he said. "The funicular stands on its own."
He has already invested $500,000 in Heritage Mountain and has put a $3.5 million down payment on the hotel.
Jenkins said Borcherds originally planned to build a hotel at the base of Heritage Mountain, but he decided to buy the Excelsior since it already exists.
Borcherds said he doesn't expect to make many changes in the hotel and intends to maintain current management and staff.
He has already moved eight families to Provo from Memphis, Tenn., to help with the Heritage Mountain development.
He said the resort will be a year-round tourist spot. He hopes to attract people to an Indian Cultural Center, similar to the Polynesian Cultural Center in Hawaii, on top of the mountain.
Borcherds' business is to take companies through Chapter 11 bankruptcy proceedings and to reorganize them for recovery.