Friend Ranch is strapped by liens totaling millions, including a foreclosure lien, but the sales office remains open. A key partner building the golf course Redstone Inc. even filed a lien.
According to public records, Castle Rock-based Hudick Excavating Inc.’s foreclosure lien is for $1,395,869.33 plus interest. Colorado Springs-based Redstone’s lien is $898,959.39; Salida’s Lowry Contracting’s is $21,356.74. Salida’s Mountain Engineering and Testing Inc.’s lien is $7,100.54; Colorado Springs’ Golf Enviro Systems Inc. has extended time to file a lien, along with Colorado Golf & Turf of Littleton and HD Supply Waterworks of Henderson. Springs-based Green Belt Turf Farm’s owner wrote out his lien by hand for $76,455.06. And more liens may surface.
All but two Friend Ranch homesites that were purchased outright are encumbered by the liens, having no clear title.
Friend Ranch Investors Group’s paper trail of multiple amendments to deeds is dizzying. In short Colorado Capital Bank’s loan amounts for the 600-acre golf community, two miles west of Poncha Springs, increased to $11 million by October 2008. Another $2.2 million loan from lender Tomar Development was made in June 2009 to Friend Ranch Investors Group, managed by Richard Chick. The property for the development is owned by longtime ranchers, the Friend family. This property is collateral for the loans.
The situation is becoming more complicated, and the implications for the town of Poncha Springs are yet to be determined. For example, Hudick names a number of defendants in its foreclosure notice, including Redstone Inc. and the “public trustee of Chaffee County.”
‘TIMING HAS NOT BEEN GREAT’
Chick has said publicly that he is reorganizing the project’s financial and ownership structure. “The timing has not been great,” Chick said.
Chick said the three years spent getting the project approved “took us to the brink of the worst recession the United States has ever had.”
The Friend Ranch website describes the development as being near “the purist part of the Colorado Rockies” and the master plan as being “expertly created.” The vision for the 18-hole golf club includes a driving range, practice area, clubhouse, pool, spa, fitness center and tennis courts.
Chick said of the entire development, the property is platted for 109 duplex lots with ground entitled for a 135-room hotel.
The Friend Ranch website also shows a map with red dots, indicating homesites under contract. Chick said there are 24 single-family lots under contract and one has closed; 41 duplex lots are under contract, with one closed.
Deposits on single-family lots are nonrefundable and significant at 20 percent of the listing price. The lots listed range from $119,000.00 to $520,000.00. Those under contract were less expensive at $75,000.00 to $320,000.00.
For infrastructure, Chick said Boon Drive Loop and roads that spur off are completed with an “all-season surface,” not yet paved. Six holes on the course are done, flags marking them flap in the afternoon wind. Work on the lake is finished. In the spring he hopes the development’s water and sewer lines will connect with Poncha Springs, the water tank will be placed and other utilities will be installed, Chick said.
“I’m hopeful,” said Chick, who has a homesite at Friend Ranch. “Progress has been made and w
e’ll get to the finish line.”
PONCHA SPRINGS GAINS A LOT WITH A LIEN
On Monday night, Chick discussed a quitclaim deed dated Feb. 1, 2010 with Poncha Springs town trustees at its regular meeting. Friend Ranch agreed to give an acre-plus lot to Poncha Springs to use as a maintenance facility or a package sewer plant. But this piece, Lot Y, is encumbered by the liens.
When asked about this, Poncha Springs Town Administrator Jerry L’Estrange said: “They’re working on a restructuring package. The liens are there because the cash flow isn’t there. When that is solved, the liens are solved.
“By the time the town is ready to develop, the liens could be a thing of the past,” L’Estrange added. “We would hope it’s a thing of the past.”
It’s a wonder that Poncha Springs ever gave Friend Ranch the green light. Poncha Springs’ voter-approved Comprehensive Plan adopted in September 1998 clearly states on Page 33, Policy CCG-24 that the town “shall not permit any ‘flagpole annexation.‘ ” This was about eight years before plans for Friend Ranch, a flagpole annexation, were unveiled.
Chris Duerkson is a land use attorney with more than 30 years experience and is managing director of Clarion Associates, a Colorado-based zoning and planning consulting firm.
He lives near Friend Ranch and opposed the annexation from the beginning. He wrote in a letter to the Board of Trustees in July 2007 that the development “continues to have numerous and serious environmental, water supply, infrastructure, drainage, water quality, wildlife habitat, geotechnical and other problems.”
He went on to write that Poncha’s “ordinances and regulations are modest at best and do not adequately cover these issues.”
In an email Duerkson said he had equally serious concerns about “flimsy financial projections used to justify the development.” He said the residential and commercial land sales projections were “wildly inflated by the town’s consultants and swallowed unquestionly by town officials.”
Water could also be problematic. Local landowners and ranchers have voiced concern over the development’s impact on surface and groundwater. The issue revolves around proposed ditch crossings and long-term effects of dewatering parts of the development. But that’s another story.
Courtesy aerial photo of Friend Ranch.
PROPERTY IS A BEAUTY
It’s quiet at Friend Ranch, a pretty piece of property along County Road 210. The surrounding mountains are nicely dusted with flurries. Snow covering homesites glistens in the day’s last light.
The large welcome signs from summer are down. Evidence of work that stopped is scattered about like unfulfilled dreams – mounds of dirt and gravel, a lone concrete-poured basement, landscape fabric curving through the course.
Jay Benson of Redstone Inc. started construction on Friend Ranch’s golf course. Benson’s built more than 20 courses, including the Rio Grande Club, The Ridge at Castle Pines and Southwind Country Club in Kansas, according to Friend Ranch’s website.
Benson said he knows the original ownership has gotten into financial trouble and there’s a new group working with the existing bank to find a solution. “It’s a work-out situation,” he said. “This project, if done correctly, could have a happy ending. There are people looking to take over projects. This project is fixable. It was a perfect storm of the banking industry and the market.”
Benson said he’ll finish the course if the project moves forward and if they ask him. But “I wouldn’t come do it if I didn’t get paid,” he said. “I’ve done that once.”
* Watch this story unfold at SalidaCitizen.com. It’s the start of an occasional series that will explain how this situation came to be.
As you’re leaving Poncha Springs, heading up towards Monarch, look off to your left. You will see the start of the golf course,. The project runs parallel to highway 50. -Ed
Very informative, and exquisitely written.
Isn’t Mr. Chick also involved in the Weldon Creek developement which is right across the road from Friend Ranch?
BRAVO!! This is a great piece of journalism and the FIRST informative and accurate piece on what is happening at Friend Ranch.
I find it interesting that Mr. Chick now blames a three year delay in approval for the projects problems. In part he blames the present fiscal problem on the need to spend $200,000 for pumping water from sewer line trenches. Nonsense!
The problems go back to the original submission to Chaffee County and then to Poncha Springs which was at the suggestion of Chaffee County. The County dropped this as soon as possible.
This project is massive. You are essentially dropping a new town in a rural area. Yet the original submission to Chaffee County could fit in a shoe box. It contained no serious information. The same applies to the original submission to Poncha Springs. There were no fiscal studies in the original submission, there were no engineering studies, there were no studies at all! Just talk.
The engineering studies, including the geotechnical report and hydrological studies were not submitted until 2008 and 2009. Other studies were completed after being requested by Poncha Springs. That is a three year delay by FRIG and Chick. In 2008 the Town of Poncha Springs provided two Resolutions to Mr. Chick allowing him to start selling lots PRIOR to the geotechnical studies being completed. Those resolutions are on the Poncha Springs web site. The first building permit for a townhouse was issued prior to the geotechnical study being completed. That was in June 2009. The geotechnical report finally arrived in September 2009. Any delays are the fault of FRIG and Mr. Chick, they knew what studies were needed years ago.
How about Mr. Chick’s excuse regarding having to spend $200,000 to pump water from trenches. (see Mountain Mail article) That excuse makes absolutely no sense. The ranchers with those ditch rights have addressed serious concerns for several years. Why didn’t FRIG’s own hydrology studies identify this problem? A thorough study would pick up those high water levels which occur every irrigation season.
Mr. Duerkson put it best regards this projects present fiscal problems: “flimsy financial projections used to justify the development”.
For now Mr Chick’s reorganization looks to me to be an attempt to reorganize the deck chairs on the Titanic. That leaky faucet in a bow compartment just keeps getting worse.
My thanks to Ann Marie and the Salida Citizen for an excellent story. Keep up the good work. This type of transparency is much needed in Chaffee County.
Since real estate speculation and booms (and trafficking in the sketchy debt) were largely what fueled “the Great Recession”, why is any of this surprising?
Very well written, logical and highly readable. This story deserves wide coverage. The lack of oversight by the Town of Poncha Springs is alarming. I hope that whatever intergovernmental agreements that Salida considers with Poncha Springs are approached very carefully. Regional cooperation is greatly needed, but the Town got in way over its head on this project. Visions of grandeur are entertaining but being able to execute professionally against a well-conceived plan is a much more worthy goal.
Great article, Ann Marie. Those “flimsy financial projections used to justify the development” were the norm for so much development in the decades long run up. This “build it and they will come” mentality unfortunately peaked at the convergence of a falling economy and a collapsing real estate market. I believe this project has huge potential, but as conventional wisdom in the development community will attest, it’s the third guy in that makes the money. I am sorry to read about the current troubles of ‘the first guy.”
Once again, excellent, comprehensive research and reporting by Salida Citizen staff. You guys just get better and better.
Another well written and informative article by Ann Marie Swan! This is a very interesting story indeed.
This article was inspired, in part, by community members who read a piece in the Mountain Mail and knew there was more to the story.
Please consider also thanking our advertisers who make it possible to pay journalists to research these and other issues. We pay a pittance, so good words go a long ways. Thank you for the comments, please keep them coming.
Bravo Ann Marie!!! So well written and informative….
Excellent story. This lien situation has consequences on lots of the “little people” locally as well as the people who have invested as partners and as property owners. I would love to see a similar story on the situation at the new Hampton Inn. There’s more to that story as well, with lots of local repercussions. Nice job Ann Marie.
As a concerned Poncha Springs resident, I am watching developments at Friend Ranch closely. Thanks for the thorough report and I look forward to your follow up articles.
I found your article on the web after finding out the “New ” owners are willing to offer me a great deal as one of the “foreclosed ” lot owners who put down the non refundable deposit. Their offer to deduct my deposit from the original price of the lot with a requirement to build on that lot is an absolute joke. The original price was based on the real estate bubble and certainly does not reflect the true land value of a development with no paved roads, multiple liens, 6 holes of golf with no clubhouse and no other amenities and a likely chance of going broke again. I guess this groups plan was to approach the low hanging fruit of original investors to see if they had any money left to steal.
I would be interested to hear from any other lot owners with similar feelings and maybe we can pool our resources to seek a just resolve.
Thanks and again great article.