Work on a 300-unit apartment complex may resume soon, but its original intent of providing low-income housing may be ignored, sources have said.
Bono Development Inc., attempting to sell the Pioneer Park Apartments under a Chapter 7 bankruptcy filing, soon may reach an agreement with a buyer to sell the project overlooking Pioneer Park on Third West, said the developer's attorney, Joel Dangerfield.Dangerfield is discussing a possible sale with several potential buyers he called "variously serious." An agreement could be reached if a buyer can finance a deal for the project, valued at $2.8 million, Dangerfield said.
Bono borrowed $13.5 million in bond money in 1985 issued by the Salt Lake Housing Authority under the condition that 20 percent of the units built be for low-income and elderly tenants. But Dangerfield believes the requirements can be rejected.
Ignoring the requirements prompted Arlo Nelson, Housing Authority executive director, to say he is very concerned that the original intent of the provisions in the bond be honored.
"The reason we do that (apply low-income requirements to bond provisions) is to help low-income people, and to remove that is something we would look at very carefully," Nelson said.
Additionally, the Salt Lake City Redevelopment Agency reduced the price of the land for the project by $2 million to entice Bono into starting the project, originally hailed as a public-private venture to spark more growth on the bare Block 49.
When the RDA sold the land at a reduced price to Bono, it imposed a Dec. 15, 1988, deadline on completion of the project. The bare walls of the complex continue to stand unattended, making it unlikely the deadline will be met.
But RDA deputy director Richard Turpin said those dates could be amended to give a new developer additional time to complete the project.
Dangerfield said Bono never enjoyed the bulk of the bond money after a California company, Unified Capital Corp., which held collateral on the loan, invested the money elsewhere.
Because Unified Capital failed to provide the bulk of the bond money Bono was forced into bankruptcy. Additionally, because Bono never obtained most of the bond money, the Housing Authority requirements are not binding, Dangerfield argued.
Unified Capital's attorney, Peter Billings, said the reason Bono didn't receive the loan is because "Bono didn't live up to its obligations." Bono originally filed for bankruptcy under Chapter 11 laws, which give debtors the opportunity to make changes in their corporate structure. The developer later amended the filing under Chapter 7 bankruptcy laws, which enable a corporation to liquidate its assets to satisfy debts, U.S. Bankruptcy Court records said.
Bono faces scores of claims for unpaid construction-related bills, according to Bankruptcy Court rec-ords. But Dangerfield said Bono will deny most claims made by Unified Capital Corp.