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Top tech trends for 2015

Top tech trends for 2015

Remember when a cloud was just a puff of white or gray in the sky? A file was ma...

Port commissioners approve Northwest Packing Co. lease extension

Port commissioners approve Northwest Packing Co. lease extension

Fruit processor Northwest Packing Co. will continue to call Southwest Washington...

Trust reveals plan for Academy renovations

Trust reveals plan for Academy renovations

Although officially it won’t be a done deal until late January when escrow close...

New laws affecting business in 2015

New laws affecting business in 2015

With a new year come new rules and regulations. However, most of the pressing ch...

2015: A critical year for future of the Port of Vancouver

2015: A critical year for future of the Port of Vancouver

The upcoming year holds several major projects for the port of Vancouver. Ten ye...

Best in Business 2014

Best in Business 2014

Here are the winners of the Vancouver Business Journal’s 2014 Best in Business A...

Technology & Electronic Solutions

Top tech trends for 2015

Top tech trends for 2015

Remember when a cloud was just a puff of white or gray in the sky? A file was made of paper? Security required a locking cabinet and a key? It’s hard to overemphasize just how much modern workplaces have been transformed by technology over the past three decades. Today, clouds are a trendy online tool, security requires complex rules and the systems that companies use to generate new leads are und...

Accounting & Finance

What businesses can expect this tax season

What businesses can expect this tax season

The tax man cometh – and just exactly what that means this year depends on your business. For some, the Affordable Care Act (ACA) will bring significant ramifications. For others, capitalization and repair rules are going to be a major concern. For businesses and CPAs alike, IRS response times could cause problems. In the following paragraphs, local CPAs share their expertise with VBJ readers to h...

Spotlight

Heritage Bank: Banking on growth in SW Washington

Heritage Bank: Banking on growth in SW Washington

One-year after opening a new branch in East Vancouver, Olympia-based Heritage Bank is looking to continue to expand in Clark County, riding positive economic trends.

Heritage entered the Southwest Washington marketplace in September of 2010 via their acquisition of then-struggling Longview-based Cowlitz Bank (also known as Bay Bank). And after more than four years in Vancouver, starting at the ci...

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

ACA: Delayed tracking, reporting & penalties are over

ACA: Delayed tracking, reporting & penalties are over

Since the Affordable Care Act (ACA) was written into law, there have been several confusing delays with its implementati...

The 2015 tax filing season is here

The 2015 tax filing season is here

It is time again for the lively advertisements encouraging taxpayers to get their billions back. Meanwhile, IRS computer...

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