Vancouver Business Journal

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County, wine industry approaching smoother waters

County, wine industry approaching smoother waters

A learning experience. That is how both vineyard/winery owners and county offici...

Banner Bank to open Salmon Creek branch

Banner Bank to open Salmon Creek branch

Banner Bank, a Walla Walla-based financial institution with a branch in East Van...

Study: $7 billion investment in state transportation would yield $42 billion in benefits

Study: $7 billion investment in state transportation would yield $42 billion in benefits

A healthy ROI awaits the state of Washington if its leaders are willing to make ...

Downtown Vancouver cocktail bar readies for opening

Downtown Vancouver cocktail bar readies for opening

The owners of Grocery Cocktail and Social, a new cocktail bar/restaurant located...

WSU Vancouver: Enhancing the business community for 25 years

WSU Vancouver: Enhancing the business community for 25 years

25 years ago, Washington State University opened its Vancouver branch on the Cla...

Maruichi Northwest to invest $30 million in port steel mill

Maruichi Northwest to invest $30 million in port steel mill

A new steel mill is coming to the Port of Vancouver USA’s Centennial Industrial ...

Health Care & Hospitals

Healthiest Companies of Southwest Washington 2014

Healthiest Companies of Southwest Washington 2014

Recognizing the employers who go above and beyond to create a healthy workforce

Studies continue to show that good health practices at work create a more productive and efficient environment with less absenteeism, proving that the “daily grind” doesn’t have to be a grind. From a Vancouver-based manufacturer to a regional law firm, these four workplaces are making the 9-to-5 a happier and healthie...

Food & Agriculture

County, wine industry approaching smoother waters

County, wine industry approaching smoother waters

A learning experience. That is how both vineyard/winery owners and county officials seem to view the past few years, as they sought solutions that would encourage the development of wineries in the county while mitigating impacts to neighboring parcels. And, like many learning experiences, it was sometimes fraught with mistakes, misunderstandings and frustration. But Marty Snell, Clark County comm...

News Briefs

Riverview Community Bank posts $1.1 million in second quarter earnings

Riverview Bancorp Inc. reported this week that it earned $1.1 million, or $0.05 per diluted share, in the second fiscal quarter ended September 30, 2014. The second quarter results also included a $3.5 million reduction in nonperforming assets, an 18.6 percent decline.

Spotlight

ExecuTech Lease Group: Putting the personal touch into equipment leasing

ExecuTech Lease Group: Putting the personal touch into equipment leasing

Many restaurants and small businesses use a cash register and a separate terminal to handle sales, while another PC handles timecards and inventory management. But as the business grows, so does the need for a full-scale point of sale (POS) system. Such a system in a restaurant, for example, integrates everything from placing an order to a credit card swipe into one piece of equipment. But this ty...

Tapped out

 By John H. Baker, Jordan Schrader Ramis

What happens when a development project runs out of money before the work is done? Today’s tight credit and uncertain market prospects cast a shadow of risk on once-promising projects.

Each party – a tapped-out developer, undersecured lender, or unpaid contractor or consultant – has a stake in the project. Each party can protect its stake by cooperating with the others to maximize the property’s value and minimize dispute costs.

 By John H. Baker, Jordan Schrader Ramis

What happens when a development project runs out of money before the work is done? Today’s tight credit and uncertain market prospects cast a shadow of risk on once-promising projects.

Each party – a tapped-out developer, undersecured lender, or unpaid contractor or consultant – has a stake in the project. Each party can protect its stake by cooperating with the others to maximize the property’s value and minimize dispute costs.

To achieve the best outcome possible:

Determine the total value actually at risk

The typical project under review in this situation is unfinished, late and will require more money to finish than anybody expected to contribute. Given those factors, the parties need to realistically determine the value of the unfinished versus the finished project.

Whether or not the projected finished value is equal to the original pro forma appraisal isn’t the issue - the critical consideration is what its completion will contribute to the value.

Analyze options

The lender may face the burden of injecting more funds into the project than its authorized loan-to-value ratios. The owner or developer may have to liquidate other assets. Contractors may have to discount work or extend payment terms.

These analyses must consider the cost of further delay and litigation. The parties’ contractual rights to recover delay costs, attorney fees, appraisal costs and other expenses may not outweigh the cost of losing tenants or buyers because the project did not make it to market.

Parties must determine their bottom-line position

Each party may find itself unable to participate in a solution on a true pro rata or proportional basis. The owner or developer may have no other assets to liquidate or contribute. The contractor may face unpaid tax claims or other liens that threaten its ability to remain in operation.

But within the range of financial contributions that each party can accommodate, a workable solution can often be found.

How it might work: a recent case history

The project in question was 90 percent complete but the expected cost to finish would substantially exceed the original budgets. The owner’s resources were depleted, credit limits were maxed out and the contractor was owed a substantial sum.

The lender suspended funding, work stopped and the contractor filed its lien. But the contractor chose not to immediately exercise its right to terminate the contract and foreclose its lien, leaving room for all parties to maneuver.

After multiparty discussions, a contract change order ultimately led to completion. The contractor received more than 90 percent of its lien claim but agreed to an absolute maximum fixed cost to finish the work. The lender agreed to fund the final work, given the limit and received an additional supplemental guarantee for payment from the investors and the owner.

A short-term completion schedule was agreed to by all parties. Every party gave up something, but no party was forced to bear the total burden or expense of the problem. Finishing is obviously the ultimate goal of any construction project and should remain the goal even when problems develop.

 

Douglas P. Cushing is a member of Jordan Schrader Ramis’s business practice group. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. . John H. Baker, AIA, LEED AP, is a member of Jordan Schrader Ramis’s Dirt Law practice group. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .

Opinion

Focus Column

How fitness makes you better at work

How fitness makes you better at work

In August of this year I had the opportunity to submit an article to the Vancouver Business Journal entitled “Healthcare...

5 Ways to win in workplace wellness

5 Ways to win in workplace wellness

In the building industry, you might not expect to need a fast horse in the race to win in wellness. Construction workers...

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