OREM The flagging economy and mortgage slump has hit Orem's Midtown Village hard so hard that construction has stopped, bills are piling up and luxury condos are sitting empty.
"People can't get funding, sales have slowed down," said Larry Myler, project owner. "People are waiting for the market to hit bottom before they do anything. I think we're in the same boat as every other project waiting for sales to start up again. That's pretty much our revenue."
Big-D Construction stopped work on the $100-million-plus project at 320 S. State about a month and a half ago, and only five of the 79 condos in the south tower have occupants. Another 38 posh condos are just waiting for financing to go through and they too could be sold, Myler said.
Despite lower advertised interest rates, loans are harder to get as tight-fisted financial lenders are requiring higher credit scores, larger down payments and proof of long-term employment.
Without the condo sales, Myler can't pay off his loan or pay his subcontractors, some of whom have filed liens against the company.
Calls to Big-D Construction were not immediately returned.
"Everyone has been paid along the way for two and a half years," Myler said. "Then the past four months' payments have backed up. We do owe some monies to contractors. So we discontinued construction. We don't want to get deeper and deeper in the hole. We're kind of at a standstill until the market forces turn around."
But despite the dragging economy, Myler said he is still optimistic.
"There's too much money in the project for it not to be finished at this point," Myler said. "It will be finished eventually. My main goals at this point are to take care of the contractors, take care of the buyers and continue working with our bank. We will get through this market together. We will make it work together."
Another project in Orem, The Broadmoor Towers an eight-story commercial building at 1600 N. 1275 West isn't facing quite the same struggles as Midtown Village, but real estate broker Jason Dodge said he can easily see how it could.
"Lenders have been more careful with approvals on projects like this that are largely speculative building," he said. "This building has three to four floors that are already tied up, so this particular project hasn't had the problems that I think many of them will have. Building a 100-percent speculation (project), you're probably not going to get financing, whereas two to three years ago, it got a slam dunk if you had a good record."
Managers of the proposed Zions Bank Financial Center at 200 N. University Ave. in Provo also ran into a few financial slowdowns, though they hope to begin construction within 60 days, said Cameron Gunter, owner/manager for PEG Development.
"Banks are taking a more conservative approach as they look at financing," Gunter said. "Financing's been a bit more difficult, but that's good for all of us. We have to take a step back and make sure it's economically feasible."
The Provo project already has Zions Bank as a tenant and others lined-up, but most will lease after the building is finished, Gunter said.
Despite pre-sales at Midtown, Myler said some customers have backed out, while others are still struggling to get funding from their banks. Some are just "hanging in there, trying to wait it out," he said.
Two businesses, Pizzeria 712 and Equity Title, have moved in and are doing well, Myler said, and Kneaders Bakery will soon have a shop in the southeast corner of the South Tower.
"We are pushing forward, we're not worried about the economy," said Kneaders' owner Matt Peterson. "Kneaders is strong, every single unit is improving over last year."
After the bakery finishes architectural and engineering work and gets a building permit, Peterson is hopeful Midtown can complete the contracted structural build out and business can begin.
Myler recently visited with the Orem City Council to explain the delay."We're sympathetic to him and the challenges," said City Manager Jim Reams. "This market has affected a lot of people. We'll just work with him."