Work has resumed at a major retail/office development on Stafford Lane after new financing was lined up and claims left over following an April foreclosure were settled, according to developer/consultant Charles Osman.

The rebirth of the development, being called The Shoppes at Delta and located on Stafford Lane east of Safeway, is the result of some dogged determination and compromise by businessmen involved in the enterprise.

Charles Osman, principal in Layton, Utah based Chazco Development, was the project’s original general contractor. Osman and Chazco lost financing on the retail/office project in August of 2007. Osman found new financing for the project, but then saw his interest foreclosed on by the new partner last April.

He then forged a partnership with the foreclosing owner which has now committed new financing to continue the project.

In the process Osman, who is now working for the new owners as a consultant to complete the work, said that local subcontractors have been paid for the work they had completed by August of 2007 when tradesman walked of the job with no pay one Friday afternoon.

“Our project has been funded by the now current landowners, whose name is Bridge Loan Capital,” Osman explained. “They go by the acronym BLOC. We could not find the necessary funding to proceed when BLOC foreclosed earlier this year. So, BLOC stepped in and said they didn’t want to own ‘scorched earth’ in Delta, though they wanted to see the project completed.

“When the financial markets and credit markets shut down, we were caught in a perfect economic storm,” Osman said. “BLOC had access to some capital, so they brought me in and said they wanted me to come work for them as a consultant to finish the project.

“By doing so, they would be able to recoup all of the capital they had put in, and would put in. We’d be able to get all of the subcontractors and materials paid. We could get all of the tenants who wanted in moved in, and so the project was really revived through the efforts of BLOC,” Osman said

The BLOC financing group That Osman now works for is headquartered in Salt lake City. The new financing package came together in July, Osman said.

With new money to restart the project, Osman said their priority was to settle unpaid accounts with local subcontractors and suppliers. “Anytime you have liens and litigation there are the legal side and the business side to deal with,” Osman said.

“Not all the contractors have been paid 100 cents on the dollar; but all have agreed to settlements,” Osman said. One major local contractor received 85 cents on the dollar for their work.

“If people were not paid 100 percent of what they were owed, there were no deep discounts to get this thing settled out,” Osman said. “All of the subcontractors who were owed money for work when the project stalled in 2007 have been paid. There is nobody left outstanding, from the largest all the way down to a $500 payment. Everyone has been paid,” to their satisfaction under agreed settlements.

Osman said that South Side Steel of Denver and Downey Excavation accounted for almost half of all the outstanding accounts that had to be settled.

“We have paid out about $1 million,” to the various sub contractors, Osman said. “One-hundred percent of the subcontractors who were owned money are now working for us again on site as subcontractors. I think if they had been unhappy with their settlements they would not have come back to work for us.”

He said the main catalyst to getting the project restarted was BLOC’s desire not to own an unfinished retail development in Delta. But in another sense there were a lot of local people, the good subcontractors who had been left hanging.

“On my own part it was two-fold,” Osman explained. “Yes, I would like to see the project completed for the city’s sake so it didn’t look like an eyesore. But, we also had a lot of good people here who needed to be paid.

“I can tell you that in the year and a half that I hunted down money I went to 41 banks and presented the project. I went to local banks as well who turned us down. That wasn’t because they didn’t believe in the project, but rather because their corporate structures had changed and they were not able to loan money as freely as they had before. But nevertheless, I wanted to get those local subcontractors paid,” Osman said. “I think that many people had given up on me, and a lot of people had given up thinking that the project would never happen. ”

When the perfect economic storm hit Chazco’s Delta project in August of 2007, the development company was planning a similar project at Rifle. “On the Rifle project, Osman said, “We had not yet purchased the land when the credit crunch hit. So that will not be going forward. It may have been a blessing in disguise, actually. Rifle, as you know, has had some fairly big economic hits.”

A few month ago, Osman was in this area meeting with subcontractors and hoping to get settlements arranged. At that time he predicted the Delta project’s restart and completion by early next year.

The current estimated completion date is next March. Upon the now planned completion, The Shoppes at Delta will house 20,000 square feet of retail space. Anchor Tenant will be Aaron’s Rents; a furniture and electronics retail franchise operation. Aaron’s Rents will be owned by a franchisee headquartered in Cortez who has 19 of the stores across the western united states.

The Shoppes at Delta will also have 16,000 square feet of full-service executive office suite space located upstairs from the retail. There will be sixteen executive offices

Some tenants have re-signed their original leases, Osman said. In addition to Aaron’s Rents, Rib City Grill will be opening a new Delta Location in the Shoppes at Delta.

Projects in other locations that Chazco had under development are either close to completion or complete at this point. “We will have gone from doing ten projects per year to two. That is primarily due to the credit markets being closed down,” Osman said.

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