ARCHIVED  June 29, 2001

Dacono debts climb higher

GREELEY — Documents on file with the Weld County Clerk and Recorder’s Office suggest more than $83 million has flowed into the proposed Dacono Factory Stores project.

But questions outnumber answers about the 26 deeds of trust, one guaranty and four unsecured promissory notes found filed under the name Oxford Development LLC, the Arizona-based backers of the project. Specifically, how much money went into the project, and why isn’t there an outlet mall?

The deeds of trust represent the secured investors in the project. The Arizona Corporation Commission — which in June ordered restitution of $9.35 million against three Arizona men involved in the project for fraud, selling unregistered securities and being unregistered dealers — says another 110 unsecured investors put forward $5.2 million.

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Launched in 1992 with a sales-tax benefit granted by the city of Dacono, the project has never gotten off the ground — or off paper, for that matter.

A summary from First Dacono Development LLC, dated March 15, called for a 650,000-square-foot outlet-mall complex on 83 acres at the northeast quadrant of Weld County Road 8 and Interstate 25, the Erie exit.

The projected $90 million construction contract was proposed for Englewood-based Haselden Construction Co., the summary said.

Longtime secured investor Cor Bijvank, member of Triangle International LLC, said he had heard construction estimates ranging from $21 million to $200 million.

By comparison, the Prime Outlets at Loveland has 328,000 square feet on 40 acres and was built at an approximate cost of $40 million, said manager Peggy Ziglin.

‘Show me the money’

Some curiously loose ends dangle from the Dacono file.

The project summary listed $11.2 million in deeds of trust and $5.2 million in unsecured debt. Dave Scarboro, First Dacono’s operating manager, gave slightly different figures in May — $12 million and $8 million respectively. He didn’t return phone calls for this article.

But nearly $70 million appears to be outstanding just in deeds of trust, according to county records.

Several lenders, who appeared to have money owed to them, said some of those debts had already been released. But those releases didn’t appear to have ever been recorded.

Barbra Bourne, who invested in February 1997 along with six others, said her $100,000 was repaid long ago and doesn’t know why it hadn’t been recorded.

The same holds true for Pinetree Financial Partners II Ltd., which lent $165,000, and River Bend Financial Corp., which lent $66,000 in 1997, said Bob Shopneck, Pinetree general partner.

University of Denver law professor Jimmy Winokur said a deed of trust is similar to a mortgage, except that it involves a public trustee. When a person borrows money, he or she can put up property as collateral that the loan will be repaid. A deed of trust instructs the public trustee to put the property up for sale if the borrower defaults on the loan, he said. It also tells the public trustee to release the deed once the debt has been paid, he said.

There’s always potential for confusion about who should be responsible for recording documents, Winokur said.

Unknown lenders

The file also contains deeds of trust with unknown lenders for unknown amounts.

But developers Wendell “Ted” Decker, who had spoken with The Northern Colorado Business Report in prior interviews, and Charles Stedman couldn’t be reached for comment. Decker had agreed to an Arizona restitution order, while Stedman was facing a recommendation for restitution when the Business Report went to press.

It also could be that some of the deeds of trust overlap, as in Bijvank’s case.

In December 1998, Bijvank signed over $775,000 and friend Jan Bommel put in $217,500. But three deeds of trust were recorded, one for each man separately and one for their combined investment of $992,500. The deeds showed security in different lots on the property, Bijvank said.

Winokur said, in theory, there’s no limit on the number of deeds of trust on a property. It’s possible investors may have wanted more security, hence more deeds, on their investment.

How a property is valued changes, and depends on people’s perceptions of worth and risk, he said.

“If you’re willing, you could put a $1 million mortgage on my left shoe,” he said. “That’s a lot of risk for you, but you could do it.”

The biggest creditor

One company, the Renaissance Asset Fund Inc. of San Clemente, Calif., risked at least $56 million.

The Dacono Factory Stores would have been good for the community, said Ron Nadel, Renaissance president.

From November 1999 to October 2000, four deeds of trust for Renaissance worth $56 million were recorded. However, one deed, for $50 million, had performance benchmarks tied to it and wasn’t all disbursed. Nadel said he didn’t know exactly how much cash had gone into the project.

“We advanced far in excess of $6 million, but that’s all we could get secured,” he said. “Our notes are in default. They never paid us anything.”

Renaissance is considering legal action, Nadel said, but doesn’t know if it can collect. The company is also considering buying the property at the July 25 foreclosure, he said.

“I’m sorry we gave the money to that developer,” Nadel said.

More unsecured investors?

In March, an Arizona couple sent four promissory notes to Weld County to be recorded. Gene and Bettie Brust apparently invested more than $11.8 million in principal in June and October 2000.

That amount is far above the $5.2 million in principal that the Arizona Corporation Commission documented in its case.

The commission acknowledged the Brusts as investors, but didn’t have the same figures as were found recorded in Weld County, said public-information officer Heather Murphy.

The Brusts were not available to comment for this story before it went to press.

As the details of the Dacono project unfold, some questions are answered even as others arise. All the while, opinions are changing about whether the project was ever legitimate.

Bijvank said he believes Decker intended to build the outlet mall, but wasn’t the right person for the job.

“Ted Decker got involved with the wrong people,” he said. “He was in over his head. He wasn’t the developer I thought he was.”

Bourne said she harbors more suspicions now.

“There are way too many holes,” she said. “The more I’m looking at this, the more history I see, the more I think this has been a scam from day one.”

GREELEY — Documents on file with the Weld County Clerk and Recorder’s Office suggest more than $83 million has flowed into the proposed Dacono Factory Stores project.

But questions outnumber answers about the 26 deeds of trust, one guaranty and four unsecured promissory notes found filed under the name Oxford Development LLC, the Arizona-based backers of the project. Specifically, how much money went into the project, and why isn’t there an outlet mall?

The deeds of trust represent the secured investors in the project. The Arizona Corporation Commission — which in June ordered restitution of $9.35 million against three Arizona men involved…

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