Back in 2002, the developers of Pronghorn promised Deschutes County that – as state law requires – they’d build 192 lodging units at their swanky “destination resort” out among the scrub junipers east of Tumalo. At least 150 units were supposed to be in place by 2007.
Instead, in an event that’s come to be as predictable as the crocuses popping up in spring, they’ve kept coming before the Deschutes County Commission hat in hand to plead for a little more time. Times are tough, they say. Tourism numbers are down. They just can’t make all those lodging units pencil out right now.So as of March, Pronghorn had built only 48 of the promised 192 overnight accommodation units – the same number as four years ago.
Early this month the developers again made their yearly pilgrimage before the county commission. This time they’re asking for two more years to build one hotel that was supposed to have been finished a year ago, and an additional four years for a second hotel that supposedly would be completed in 2013.
But wait – there’s more.
Gerald Casilli, who put money into a trust fund to guarantee completion of the hotels, now wants the county to accept an “irrevocable letter of credit” – basically an IOU – in place of the $9.2 million that’s currently in the fund.
And there’s even more: Casilli is asking the county to release the $690,000 in interest that has accumulated in the trust fund to him.
Up to now we never realized that “Casilli” was an alternate spelling for “chutzpah.”
(A little digression here: County Commissioner Tammy Baney recently discovered that Pronghorn has been charging guests a 3% fee for use of its recreation facilities and claiming – in violation of the law – that it’s a county tax. And three years ago Pronghorn workers were caught stealing hundreds of thousands of dollars’ worth of plants from public lands. These incidents, of course, have no direct relationship to the lodging unit issue – but they do add to the general aroma of sleaziness that wafts over Pronghorn’s dealings with the public.)
Some, like our colleagues on The Bulletin’s editorial page, say the county should roll over for Pronghorn once again. The county “gains nothing” by taking a hard line, they say, but it if caves it will have “the possibility of a healthy resort.”
As for gaining nothing, we’d say $9.2 million is a pretty sizeable chunk of gain – not to mention serving notice on the developers, and others who might try to work the same scam, that Deschutes County takes the law seriously and intends to enforce it.
As for “the possibility of a healthy resort,” we’d say that after 10 years that possibility ranks somewhere between Charles Manson getting paroled and John Lennon turning up alive in Madras.
The county commission is mulling whether to grant the Pronghorn developers their requests. We believe it’s long past time to draw a line in the sand, or the sagebrush, and join us in giving them THE BOOT.
This article appears in Apr 19-25, 2012.
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I am not exactly sure why I read anything from the local fish wrapper which is TSW. Clearly the writer of this column has no idea what it takes to make a resort work….probably doesn’t even have the money to stay at one for even a week and yet s/he knows this is a “scam.” Why don’t you try to do something like this someday…..would be interesting to know how you right about it then.
Once again the TSW “staff” botches what would otherwise be a compelling story by not doing their homework/research.
An irrevocable letter of credit (ILC)is anything but an IOU. The beneficiary/maker of the ILC will undoubtedly be required to have the $9.2 MM in an account and unaccessible to the maker at the financial institution that actually issues the ILC to the county.
I actually sympathize with the guarantor, Casilli, that the accumulated interest in the trust fund over ten years is only $692,000, or about .5% annual interest. I, too, would like to find an alternative means of providing security to the county but with a more market rate return.
And of course, TSW’s lame predictable response of “just take the money” is so shallow and unimaginative. One would not this expect from such an award winning publication. Perhaps the “staff” should have considered espousing some alternative thoughts/research such as: a) researching what would it take to terminate this developer (seems like there is cause to do so) and bid out a replacement using the $9.2MM forfeited bond to offset the costs of doing so or to offer as an incentive for someone to complete the project; or b) if yet another extension is desired, research whether the county can make a claim on the bond/trust for the lost tax revenues since the first or second extension.
Your simplistic money grab remedy may make you feel good (the bedrock of all liberal policy), but it is short sighted and would result in half built eyesores around the county with no means or desire by the private sector to pick up the ball and run with it.
To be effective and thought provoking, you really need to make some recommendations when you point out what is truly a compelling issue/problem. Otherwise you become just another loud (or perhaps soft) voice with nothing to offer.
I have watched as Deschutes County has granted extension after extension to Destination Resorts letting them off the hook for overnight lodging and needed infrastructure. One can only conclude, the developers have circumvented the Urban Growth Boundary and figured out how to build subdivisions out the boundaries. Potential buyers of destination resort property should use extreme caution.