Fraser declares Grand Park in default; developer protests
December 28, 2008
The Fraser Board of Trustees declared Cornerstone Winter Park Holdings, Grand Park Development and Grand Park Homes in default Dec. 17 for not renewing a letter of credit before its expiration date.
The Midwest Letter of Credit has an expiration date of Dec. 26. However, Grand Park was notified that an amended or replacement letter of credit would have to be provided before Dec. 17, said Nat Havens, finance manager for the town of Fraser.
“We have notified the bank that issued the letter of credit,” Havens said. “There’s been a default.”
“I am baffled by this resolution that would declare me in default,” Grand Park President Clark Lipscomb said. “I’m not quite sure where they’re coming from.”
Lipscomb was not at the Dec. 17 meeting when the town board passed a resolution declaring him in default. He read the resolution for the first time on Dec. 23, he said, and hadn’t decided yet what action the development will take.
“At this point I am still evaluating all of my options,” Lipscomb said. “We had (surety) bonds ready to go to replace these letters of credit.”
Lipscomb knew the letter of credit would expire Dec. 26, and Grand Park’s surety substitution request was on the agenda. However, he said the town did not want to accept the bonds.
The main purpose of a letter of credit is as a guarantee that the project is completed, Havens said.
The main point of contention between the town of Fraser and Grand Park is whether or not the work covered by the letter of credit is complete. Lipscomb says it is. Fraser disagrees.
According to Havens, Grand Park still needs to complete grading and infrastructure.
“That is a gross misrepresentation,” Lipscomb said. “That is totally outright wrong.”
Most of the projects have been complete for three years, and he has letters from the town engineer that state this, Lipscomb said.
As of this writing, the town of Fraser has not recieved an amended or replacement letter of credit.
” Katie Looby covers government and education for the Sky-Hi Daily News. You may reach her at 887-3334 ext. 19601 or firstname.lastname@example.org.