Juniper Ridge: How Bend City Council will turn $15 billion into Bankruptcy

Lordy, is there anything the Simpsons can't teach us?

Homer: Well, what do you think?
Editor: This is a joke, right? I mean this is the stupidest thing I've ever read!
Homer: What's wrong with it?
Editor: You keep using words like "Pasghetti" and "Momatoes" You make numerous threatening references to the UN and at the end you repeat the words "Screw Flanders" over and over again.

Welp, looks like we've reached The Homer-Food Critic Moment: That point in time where BendBust's almost incomprehensible rants start to have a quite disturbing foreshadowing of what comes to pass. Many, including me, BEM, Duncan (especially Duncan), and Timmy (but especially Timmy) have borne the brunt of BilboBusters "Screw Flanders" tirades. And Juniper Ridge, Ray Kuratek, condo developers in general, and many, MANY others have acted as the quasi-relevant "Pasghetti" and "Momatoes". But BendBust, after a rusty, expletive-laden start (and middle), is starting to get his props from those he might bust in the scrote:

BendBust: Why is it that of ALL the cunts on the blog board, not a fucking one will read the M49 text but timmy?
Timmy: Finally, something almost less than disdain. I grovel.

Duncan: Bendbust is like Columbus, he may have found the wrong continent, but he found something interesting anyway...
...I went to Brooks Resources website, and Bendbust may be more on to something that I thought.
Thing about bendbust, everytime you think he's exaggerating, come to find out he not far off the mark.

Sure, there is still the odd "Screw Flanders" tirade against those who would defend him:

Buster: BEM,
I don't know who is MORE intellectually lazy YOU or HBM.

BEM: Fuck man! Gimme a break!

(BEM probably experiencing cruel sense of irony: As I bear BilboBust as frothing at the mouth raving lunatic in this blog... so did he bear me. Possibly Cats In The Cradle music is appropriate here...)

Paul-doh say long time ago young Grasshoppers:

'Twat sounds like ranting
Nothing spewed but Screw Flanders
Shows glimmer of truth

And if you've been casually skimming this blog for any period, you've noticed that one of Bilbo's favorite topics is the lambasting of Juniper Ridge. He even made a post request:
IHTBYB - You really should do a cover blog for next sunday on JR, things are really starting to hit the fan.

I'll admit, my first reaction to this was a Big Yawn. Sort of like the whole Broken Top drama: really doesn't seem to involve me, and I'm not really sure of the relevance. But Buster seems adamant about its importance, and that crazy bastard does seem to have insights buried in the nooks & crannies of his Screw Flanders tirades, so I looked into it. There are two main sources that I looked at:

DoJuniperRidgeRight.com

Who's behind Juniper Ridge and why you need to know

I could have written an EXTRAORDINARILY long, detailed, and QUITE UNFLATTERING post on this topic. But I would simply be repeating much of what is in these 2 documents. Buster alleges that BEM himself wrote the Bend Living piece, something I have no proof of. But it extremely well-written by someone who knows what the hell is going on, so draw your own conclusions. Here is a short Paul-doh summary, for what it's worth:

Juniper Ridge is 1,500ac run of scrub that passed from the Federales to Deschutes county in a land swap back in the day, and then from the county to the City of Bend:

In November 1990 the county transferred the land to the City for $1.00. The transfer stipulated that “a master development plan be formulated” and the “plan be adopted by the City pursuant to an open public process and public hearings and that the plan address the needs of the city and the concerns of the public”.

After the requisite years of wanking off, Bend City butt-munkees.. err, Councilors, decided to include 500ac in the Bend Urban Area:

Following land use law and procedures, the state in 2004 allowed 504 acres to be included in the Bend Urban Area, specifically due to the need for industrial land, and the city then annexed it in 2005. The state indicated it should be a sufficient industrial supply for 20 years.

Remember these 2 things: The land was "given" to the City almost COMPLETELY for industrial use, and maybe other mixed development use. THAT'S ALL. It is also STATE LAW that the city provide for 20 YEARS supply of industrial land, something we have been in egregious violation of a long time. Juniper Ridge is meant to solve THIS PROBLEM.

From BendLiving:

On May 13, 2005, the City issued developers a so-called “Request for Qualifications,” or RFQ, for Phase I of Juniper Ridge. This RFQ “solicited qualifications from development teams to develop approximately 504 acres of land to become the Juniper Ridge Technology and Research Park.”

Bend City Council asked for ideas regarding the development of the intial 500ac, (Phase I) THAT'S ALL. There were multiple RFQ's for a 500ac development plan, but one set of K-mart, light blue leisure suit Larry's swept Bend City Council off their feet: Ray Kuratek & Jeff Holzman, after hitching up from the Bay where they whiled away the days jerking Templeton Funds around on a 39ac campus, formed Juniper Ridge Partners for the sole purpose of bidding on the Juniper Ridge development. But Holz-tek pulled a quick one as is their wont to do, being Shameless Hucksters:

• They proposed the development of ALL 1,500ac
• They wildly changed the distribution of zoning planned for JR
• They secured a $2.5MM golden parachute for themselves to pay "salaries & expenses" if they were ever to be fired
• They receive $60,000/mo compensation
• They secured a promise of 20% GUARANTEED RETURN for their financial partner, AIG, on their $30MM investment
• They HAMSTRUNG every other proposal when Bend City Dumbshits all of a sudden acted like their 500ac proposals were no longer appropriate
• They convinced the City to go into the Development Business, and go into league with them to share (nope, "share" isn't the word... it's "bear") ALL the risks of developing JR, but ONLY get their "FAIR SHARE" of the profits after the other side is repaid IN FULL
  
• They (initially) convince Bend City Dumbfucks that despite the fact that the city would provide 100% of the land (the PRIMARY ASSET in this heist) and $40MM in infrastructure improvements as compared to JRP & Co's $30MM, that they would split profits 50/50. This was later slapped down as simply an INTOLERABLE RIPOFF.

There is probably more, but it's almost too much to bear. Typing each bullet point does to me what an inappropriate apostrophe or spelling error does to Timmy: it whipe's 24 ou-wer's auff mi life'sporn.

Holz-tek are shamless hucksters. It is in their nature to frisk their marks for every nickel. But it's Bend City Butt-bangers responsiblity to SAFE GUARD the City's resources. I DO NOT BLAME HOLZ-TEK: that's like blaming a shark for ripping a carcass to pieces, it's the nature of the beast. But when they approached the City and proposed what may well be an ILLEGAL development plan for JR, it was Bend City ButtBangers obligation to do the following:

It's called NEGOTIATION. OK, "they" propose something Out-fucking-rageous, and "you" burn their greedy asses at the stake. OK, that's how it SHOULD GO. But when Holz-Tek met Bend City Dumbshits, they knew they'd hit PAY DIRT, cuz this is what they found:


They found a whole slew of incompetents, that simply boggle the mind. EVERY SINGLE LOONEY-ASS proposal they puked forth was ACCEPTED WHOLE MOTHERFUCKIN' HOG.

Q: "20% guaranteed for AIG?"
A: YES

Q: "50/50 split"
A: YES

Q: We can completely change EVERY SINGLE REQUIREMENT of JR, including parts that would make it BORDERLINE ILLEGAL?
A: YES

Q: We get millions for doing NOTHING?
A: YES

Q: You will go into the horribly risk-laden development business in league with K-mart leisure-suit Larry's, and NOT HUGE well-established developers like Trammel Crow, despite the fact you dumbshits can't fix a fuckin' toilet?
A: YES

My God, it just goes on and on. Seriously, I get an uncontrollable eye-twitch when I think about it. You think it's an isolated incident? FUCK NO! There is seemingly NOTHING that goes before the City Council where they do not just flout their fiduciary duties, THEY ACTIVELY SEEK TO VIOLATE THEM. From todays Bulletin:

Downtown Bend lot will get an overhaul
As a result of a last-minute switch in the terms of the city’s request for proposals, officials can judge the projects without having to favor the project with the higher sale price to the city.
In August, just one day before proposals for redeveloping the land at Greenwood and Wall were initially due, the council, acting as BURA, decided to suspend the process to change the factors that would be used to select a project.

Initially, half of a project’s score was to have gone toward the price that developers offered the city for the land. Thirty percent would have gone toward the design concept and 20 percent of the score would have been for the qualifications and experience of the developers.

But at the last minute, councilors decided they would rather have more flexibility in scoring the proposals, so they pulled the plug on the process, returned the proposals unopened to the developers and launched a new process, with proposals due in the middle of September. In the second round, the three categories remained, but there was no scoring percentage or weight attached to any of them.

All but one member of BURA, Councilor Mark Capell, voted in favor of the change.

“We just seem to be doing a number of embarrassing things,” Capell said at the Aug. 15 meeting. “If we keep looking flaky, and I hate to keep using that word, (the city’s credibility) is never going to get better.”

"Flaky"? You think this sounds "flaky"? That's like calling Hitlers genocide of the Jews, "flaky". It seems borderline criminal. They've essentially WIPED OUT any possible evaluation of these 2 proposals based on merit, and made the process 100% CAPRICIOUS. 100% at their whim. Kuratek said dealing with City Council is like dealing with The Ultimate Old Boy Network... he got that shit right.

Seriously, if I type much more about this, I will get some sort of spontaneous TUMOR. But I will just shortly write what we should do with JR:

SELL IT

Right, just sell the fucker. With the current City Council we are doomed the destroy the town. Like the French, whatever it is they WANT to do, we should do EXACTLY THE OPPOSITE, because I don't know much, but I do know that WHATEVER the hell they DO want is counter to the interests of this town. There is talk that we could sell JR lock, stock & barrel for $65 million. We should do that, and then try to extract a 20% 30 YEAR GUARANTEED RETURN from AIG. That would parlay our $65 million to a scant $15,429,461,000 in 30 years. Yeah, 15 BILLS. I know, it's a little disingenuous to even THINK that any fuckin' lunatic in their right mind would PROMISE 20%... except the City of Bend. We actually ARE.

Here it is:

It's OUR land.
Most of the money is OURS

And Bend City Morons have essentially given Holz-tek the opportunity to STEAL 75% of JR.

STEP 1) 2 K-mart light blue polyester leisure suits
STEP 2) Smoke and mirrors magic show where rabbit is pulled out of hat
STEP 3) Secure Master development rights
STEP 4) Insert digits into Jim Clinton blowup doll
STEP 5) Sell 300ac of JR for residential development, in 100% VIOLATION OF STATE LAW
STEP 6) Repay AIG with proceeds, before the ink is barely dry on their $30MM deposit slip
STEP 7) Exploit 100% of the remainder of JR for the next 1,000,000 years

This is ACTUALLY WHAT IS HAPPENING. We are actually just going to GIVE AWAY Juniper Ridge. It's un-fuckin-believable. We could sell it for $65 mill, but instead we're going to just give it away, in almost certain violation of the law. Holz-tek have RE-WRITTEN the zoning proportions for THEIR SOLE BENEFIT. They WILL sell off just enough to pay off their Money Guy, and at that point, they & AIG will control virtually everything that happens at JR, and Bend & it's taxpayers are SCREWED. Seriously, it's unbelievable. We will literally turn a 8-9 figure financial bonanza into NOTHING.

And there's the idiotic protest: "If we just sell JR, we'll have no control over what happens there! Oh no!"

What? WHAT? WHAT?

What the fuck does this mean? We'll have 100% control over what happens, just like we do over every single other development. You just zone the motherfucker for whatever you want. Like this city has done a billion times before. Zone the fuckin thing for whatever you want, and then SELL IT. If you get some lunatic like Kuratek who builds a Dairy Queen in a residential zoned area, you blow it up. If Holzman builds a koi pond in a light industrial zone, you drain it & EAT THE KOI.

OK, Bend City Dumbbutts have proved OVER & OVER, that they have LESS THAN ZERO qualifications for ANYTHING, much less going into league with a couple of flim-flam men. Zone JR, sell it, and FIRE EVERY FUCKIN' BEND CITY COUNCILOR. Reminds me of "Blazing Saddle"... This is Bend City Buttfucks answer to ever flim-flam asshole that stumbles into town:

Sheriff Bart: Oh lordy lord! He's desperate. Do what he say! Do what he say!

My God, I've aged about a year just writing that. OK, moving on to David Foster & Brooks "auction", and then I have to quit and nurse this monsterous JR-inspired tumor/goiter.

David, for probably good reason, seems to have changed his tone from one of slightly masked pessimism, to one of "it's not so bad". That's OK, he's a Realtor, and frankly he was quite alone in his frank discussions of the downside. But go beyond the "surface" of whether you agree with him or not, and you get the idea that he's hurtin'. That the state of the RE business in Bend is pretty gat-damned dire. That it is starting to impact the livelihood of MANY people in the business to the extent that they will change their tune & try to "talk it up".

Now, I still respect David & his opinion, he's been a pretty straight shooter when the DuBois' & Breezes' of the World have not just been shading the truth, but deliberately misleading people, from my perspective. But I think he's shifting a little towards "puffing" this thing back up, in some measure to restore some sort of faith in this thing. He has some quotes in his recent piece:

"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000." Business Week, 1969

"The median price of a home today is approaching $50,000 ... housing experts predict price rises in the future won't be that great." National Business, 1977

"The golden age of risk-free run-ups in home prices is gone." Money Magazine, 1985

"A home is where the bad investment is." San Francisco Examiner, 1996

Now these look like pretty good homilies supporting buying a house for the long-term, given that prices are almost ludicrously higher today. But remember 2 things: There is PREDICTION of the future, and rehashing the past. Virtually ALL newspaper pieces simply review recent holding period returns, and then extrapolate these, and write some sort of "predictive" piece that is invariably wrong. That's what these are. Half-wit reporters writing pieces about holding period returns on housing that were kind of crappy at the time they wrote them. They actually are probably better as timing vehicles for a short-term bounce than anything.

Second, we are AT OR NEAR the top of the largest RE bubble ever experienced by THIS PLANET. NO MATTER WHERE OR HOW you look back, you will find prices from more than 10 years ago as almost ridiculously low compared to today. Just look at the NASDAQ right after the peak, maybe around 4,500: There is a GREAT CASE to be made that the NASDAQ at 4,500, while off a bit, is still one of the GREATEST INVESTMENTS IN MODERN TIMES.

We all know what happened next. We are at "NASDAQ 4,500" in the bursting of the biggest RE bubble ever. 10% off the top, but still there can be made very convincing arguments that RE is still a HUGE long-term winner. This is simple holding period return extrapolation, much like David's quotes. There is NO prediction in them. They are "predicting" the recent past... not the future.

Finally, Brooks Resources has decided to "auction" some townhomes at Mt Bachelor Village. Seems Uncle Flippers, the prime target of selling these shitholes, has up & died. I have to quote the word "auction" here, because my own experience of this town and it's Boss Hogg insiders leads me to believe this is Yet Another PR/Marketing Bullshit Bonanza from a graduate of the Creating Perceived Demand Where None Exists Community College, apparently where Hollern graduated.

Now Timmy, I think, thinks this is a Sign Of The Times and is indicative of one of the Big Boys doing Major Signaling that The End is Nigh. And I agree to some extent. They WOULD NOT do an auction unless there was a strong impetus to do so. But I also believe that "Auction" was Phase I of the plan. Phase II involved massive widespread PR/Marketing using The Bulletin as their bitch (check that one off as COMPLETE), then plant Friends of Brooks in the "bidding pool" to ensure a GUARANTEED SUCCESS. I don't think the higher ups at Brooks could resist.

This auction is a 100% FRAUD AND A FAKE. There is an iron-clad fallback that involves the oldest trick in the eBay book: Self dealing. These condos WILL SELL. They would NEVER do something like this & let it fail. It'd be SUICIDE for ALL OTHER BROOKS DEVELOPMENTS. There are VERY HIGH price reserves on all these units, so this is nothing more than a modest price reduction, with a ticker tape PR parade in tow. Congrats Brooks, you've turned a price reduction "mole-hill" into a PR Mountain.

If Brooks OR ANYONE were to EVER hold a 100% authentic, no self-dealing, no price res, open, public auction, the absolute WORST SCENARIO POSSIBLE would be unveiled: That market clearing prices for Bend homes are dizzyingly far below where we are now, probably 30% down from here. There is ZERO INCENTIVE to probe the true depths of how bad the current Bend market is. But evidence is all around us.

Remember "Eagles Landing"? The little subdiv with approximately 98% of all it's lots unsold, depicted in "Picto-Plummet"? Well, they lowered intial prices from $425K.... to $350K... to $299K. And how many lots sold as a result of this 30% reduction?

ZERO

Nothing has been built or even started at Eagles Landing despite the implosion of prices that have cratered 30% over the Summer & Fall. There is literally almost no way to lower your prices enough to truly understand just how depressed demand really is. People who are buying now are very, VERY few in number, and they literally have "no choice". NOBODY, given the choice, would buy now. Conversely, NO ONE who is attempting & listing their house RIGHT NOW, has ANY CHOICE. Do you know ANYONE who would VOLUNTARILY try to sell a home in Bend today? No! No one would.

In that vein, Brooks is HARD UP to sell its townhomes. ANYONE trying to sell RE around here, who needs to do it to pay off liabilities is probably looking at the Big BK. THAT is what's changing. Timmy, I think, is one person who is starting to get the smackdown that Paul-doh been laying down lo these many months:

The more I read this blog, the more I worry about my gameplan. (And I AM here to learn, not for the pure entertainment value, of which there is much.) I've been expecting mass bank takeovers of properties in Bend. Price declines to 2003, or even earlier levels. I'm prepared for Plan B in that DOESN'T happen. (Go to a part of the country where my down payment here buys a whole house there.) But am I prepared for the true ramifications of Plan A? If Bend crashes hard and I get what I thought I wanted, am I just living it up in a sweet house in a decimated crime-ridden, depressing hellhole of a town?

There isn't going to be this sort of Ceterus Paribus Decline, where all else stays equal and home prices just go into an orderly decline. Prices will go down FOR GOOD REASON. If we see $175K medians.. do you think all the recent affluence & wealth & prospering local economics will be unaffected? Or EVEN CLOSE? It'll be drugs, crime, and a bunch of gypsy's barely scrapping by. It'll be mass exodus. It'll be big swaths of GHOST TOWN SUBDIVS.

It really is scary what's going on here. A City Government that is literally a bunch of moronic criminals. Their answer to an angered citizenry regarding their own graft, self-dealing, and incompetence is MORE PR & MARKETING & CLOSE THE FUCKIN' DOORS. They are literally THROWING AWAY our tax dollars. No, that's not true. If they were just throwing dollars away, we'd probably be OK. They are actually legally encumbering this town in illegal contracts, where we literally receive NOTHING except GUARANTEED BANKRUPTCY & the other side gets HUNDREDS OF MILLIONS. It's unbelievable (Sorry, I can't stop saying that, cuz I can't stop thinking it).

I have literally resigned myself to exasperated apathy. How can I give a SHIT about this place when it's leaders don't just NOT GIVE A SHIT, they seem to actively WANT TO DESTROY IT? It's like the US itself: What the hell are we doing, taking one of the greatest stores of wealth the World has ever known (U.S. business tax base), and squandering it in a pointless "War"? I do not get it. Bend has an almost unbelievable resource in JR, it's property tax base, and other revenue sources, and we literally would be better off setting this money on fire than doing what City Council is doing.

Timmy is dead right. Bend is the next "Zimbabwe". Zimbabwe leaders took one of the most prosperous African countries 20 years ago, and literally destroyed it economically. Remember that next time someone tries to sell you the Bend Is Surrounded By Natural Wonders BULLSHIT, about how people will never leave & the hordes will always keep coming here. What a load of shit. Places of Natural Beauty being run into the ground is The Rule in this World, not the exception. Bend IS beautiful, as BEM notes, but so are a LOT of other places. People WILL LEAVE BEND IF IT IS ZIMBABWE'd. If every economic resource is 100% SQUANDERED, as it is now, you literally will not recognize Bend a decade hence. Ohhh, we'll have our $175K medians. We'll also have 50% vacancy downtown, 20% unemployment, vast ghost towns, busted windows, meth shacks on every corner, and God knows what else.

If you give a flying fuck about Bend, well then you go to the JR meeting Monday. I WILL NOT be in attendance attendance. Why should I? Per our glorious Mayor:

The Bend City Council is considering a number of other things this week.

During a Monday night work session, the council will discuss a widely circulated policy memo on the next steps of developing the 1,500-acre mixed-use Juniper Ridge project. Though the meeting is open to the public, the council is unlikely to open the floor to much public comment, Mayor Bruce Abernethy said.

Q: Why should I give a shit about a town that EXPRESSEDLY does not give a fuck about what I have to say?

A: I DON'T.

Prediction:

One or more Bend City Councilors will be perp-walked out of City Hall in the next 3 years.

Frankly, I cannot believe that what Bend City Council is doing is not being done under duress, and Holz-tek KNOW what the skeleton in the closet is. There's just no way any one person is THAT stupid, much less a whole group. Paul-doh got a nose for bullshit, and this don't smell right. Somebody's going to jail.

I also think some will see the end and pull "The Hummel Maneuver": Resign, declare your Love Of Humanity (If a lawyer declaring his "Love Of Humanity" don't set off your gay-dar, nothing will.), and run off to a foreign country with questionable extradition laws. The smarter ones will quit first, and ask questions later. I don't know much, but

SOME DUMBFUCK IS GOING TO JAIL FOR FELONY FRAUD.