County took precautions to protect itself against failed bank
April 15, 2009
A Winter Park Ranch six-unit town home development primarily owned by the failed New Frontier Bank of Greeley is poised to be in good standing with public improvements despite the bank’s seizure by the Federal Deposit Insurance Corporation last week, according to Grand County Planner Kris Manguso.
Upon foreclosures at The Hills of Winter Park Ranch development, in October, the county had obtained from New Frontier Bank $130,955 as security for public infrastructure improvements such as water, sewer and roads.
Grand County Attorney Jack DiCola, for one, was relieved to find out the bank had sent cash for the security.
“They sent cash rather than a letter of credit,” said Grand County Attorney Jack DiCola at Tuesday’s board of commissioners meeting. “Right now, we’re in great shape,” he said.
Home buyers still possess two of The Hills units pending foreclosure, DiCola said.
In addition to the bank’s security, in August 2008 the county cashed a letter of credit issued by New Frontier Bank in the amount of $85,426 because The Hills developers had defaulted on completing public improvements. Developers from the company American Dream Seminars LLC, or ADS Construction, were delinquent on improvements by nearly two years.
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In total, the county holds $216,381 in cash escrow for completion of The Hills infrastructure, Manguso explained to commissioners, enough to complete improvements in accordance with engineering specifications.
Contractor Dave Hill had been hired by New Frontier to complete the project, which according to DiCola is now about 90 percent complete.
The FDIC took over operations of New Frontier Bank last Friday and transferred saving account deposits to an FDIC bridge bank, according to the Greeley Tribune. The FDIC will contract with the Bank of the West of San Francisco for 30 days to allow residents a smooth transition.
Residents will have until May 8 to withdraw or transfer their funds to a new bank because of the closure and temporary takeover of the bank ” the first such instance of the FDIC actually coming in and running a bank this year, according to an FDIC spokesman.