One of the largest parcels of land ever to be sold by auction in Utah will go on the block June 3 when potential buyers from around the world gather to bid on a master-planned block of 1,136 acres on Utah Highway 224 three miles west of here.
Park City-based Coleman Land Co. is the Utah broker for real estate firm Kennedy-Wilson Inc. of Santa Monica, Calif., which is conducting the auction for the Southwest Bank of San Diego, the prime lender on the property. Southwest took the land back after alleged default by developer Sun Peak Development Co.Coleman Land Co. principal Bill Coleman said ads placed in the Wall Street Journal, New York Times and newspapers in Europe and Asia have attracted dozens of inquiries and he expects there will be more. The ads will also appear in the Deseret News and other Utah newspapers.
"The response has been phenomenal," Coleman told the Deseret News.
The ad placed by Kennedy-Wilson in the New York Times states that the property, located just north of the Park West ski resort and across the highway from the Silver Springs housing development, has an approved master plan for development of a "world class, four-season resort and residential community."
While that's true, Coleman doubts any buyer would develop it that way.
"It's been approved for over 5,000 condominiums, but that's not reasonable considering the market today," said Coleman. "Houses are hot, and condos are not. My hunch is that the property will be developed into about 1,000 single-family home lots."
Under the approved master plan, the land was to be developed as an equestrian resort with bridle paths and such, as well as ski lifts connecting the project with Park West's facilities.
"That's the length and breadth of what could be done," said Coleman, "but those are pretty aggressive plans for today's market."
Original appraisals on the property put its value at $15 million to $20 million, but Coleman speculates it will sell for around $10 million buyers must purchase the entire 1,136 acres in a block.
Southwest Bank has specified in the prospectus that the lowest bid they will accept is $5.9 million but Coleman said he will be surprised if the property goes that cheaply.
Who will buy it? One of two types, suggests Coleman: someone (or some company or group) looking to make an investment to hold for a period of time until land prices begin to rise, or a developer who will go in immediately and begin developing the land and building homes.
Coleman speculates any such Planned Unit Development (PUD) project would also require amenities such as tennis courts, a swimming pool and perhaps some low-key commercial development along the highway which is scheduled to be expanded to four lanes this summer.
Why auction the property? It's the wave of the future, believes Coleman.
"Rather than leaving a property on the market and trying to sell it off piecemeal, you let everyone know about it and generate a great deal of immediate interest. A lot of auctions are now happening on prime, as well as distressed, properties. It works."
Rather than having a property appraised and then attempting to sell it for that price, said Coleman, the auction, itself, does the appraising. Whatever the property brings at auction is, unarguably, what it's worth.
While auctions usually don't work for "bad" properties, said Coleman, they have usually worked well with good properties whose owners are financially distressed.
Depending on the weather and how many people arrive to bid on the property, Coleman said the auction will be held either at the site or at one of the Park City hotels. Anyone needing further information may call Coleman in Park City at 649-7171.