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Orem not foreclosing on Midtown Village

OREM (Daily Herald) -- Orem city officials won't be foreclosing on Midtown Village for now.

According to Orem's Assistant City Attorney Steve Earl, BankFirst, which was taken over by the FDIC in July, paid $472,474 a week ago after the city threatened to hold a foreclosure auction in November on the multi-million-dollar project when its developers failed to pay assessments for work done on underground public parking. The assessments were due June 1.

"They paid an extra $27,000 on top of the assessment for title work and legal fees that Orem had to do to file the notice of default, and also figure out who filed liens, or have a claim in the project, so we can give notice to those people of the foreclosure proceeding," Earl said.

South Dakota-based BankFirst -- whose deposits in Minneapolis were acquired by Grand Forks, N.D.-based Alerus Financial -- is the lead bank of a consortium of 45 financial institutions that provided a total of up to $62 million in financing to Midtown. BankFirst and First United Funding LLC provided around $20.7 million in financing in addition to $42 million provided by Marshall Investments Corp. in June 2005.

That the assessment was paid after the FDIC took over BankFirst showed that the federal regulator wasn't dragging its feet, Earl said.

"If Midtown had gone to a foreclosure sale, it may really have compromised the FDIC's interests," he said.

Midtown's developers, which haven't sold enough condos or commercial space to date and are therefore responsible for paying the annual assessments for about 20 years, failed to meet the June deadline. The next assessment is due June 1, 2010.

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