A highly touted mixed-use development slated for the historic Story Mill site in Bozeman appears to be dead – the latest victim of the rolling financial fiasco that has engulfed the Yellowstone Club and its owner, Edra Blixseth.
The Story Mill project, which would have been among the first large urban infill projects in the region and promised to set new standards for sustainable development, was led by Matthew Crocker, the son of Edra Blixseth. Crocker and Blixseth signed personal guarantees for a $13 million loan from a Colorado real estate finance company in the summer of 2007, the proceeds of which went to Blue Sky Development, Go Build and several related entities. Story Mill was the primary project being undertaken by those companies, and the Colorado firm, Western Capital Partners, sued Blixseth and Crocker for repayment last month, alleging that no payments had been made on the loan since July.
Multiple sources associated with Story Mill confirmed that activity had been at a standstill for some time, and that Go Build laid off all its employees and closed its Bozeman office in December. Go Build and Blue Sky Development owe money to a number of Bozeman companies, and at least two – Hyalite Engineers and Kath Williams, a green building consultant – have filed liens against the Story Mill developers. American Bank, a lender to the project, declined to comment.
Story Mill is one of a number of entities that are reeling in the wake of the Yellowstone Club bankruptcy. Edra Blixseth, who took control of the club following her bitter divorce with Tim Blixseth, apparently has no cash to support a far-flung array of business ventures and expensive personal properties. Employees and vendors at her massive Palm Springs estate apparently weren’t paid for many weeks and were dismissed around Christmas.
Meanwhile, employees of a Blixseth-owned technology company called Blxware, which is mired in a convoluted legal battle of its own, also say they have not been paid. Edra Blixseth in November agreed to a settlement of litigation relating to the Blxware technology, which can supposedly be used to track terrorists by scanning video. Together with the company and with the inventor of the Blxware technology, Blixseth agreed to pay $20 million to eTreppid Technologies, a company owned by veteran businessman Warren Trepp, as well $5 million to Trepp and $1.5 million to an entity called Friendly Capital Partners, according to court documents. The payment to Friendly was due in early December, and Blixseth and her partners were also required to pledge $40 million in collateral against the settlement by mid-December. It’s not clear if either of those actions have taken place. Attorneys for Blxware and Trepp could not be reached Monday.
The Yellowstone Club is now operating under Chapter 11 bankruptcy protection with a $20 million loan provided by CrossHarbor Capital Partners. CrossHarbor also holds a $35 million mortgage on the Palm Springs property – money which Edra used to buy Tim out of the Yellowstone Club as part of the divorce – and that loan is also in default. Edra also pledged to put up an enormous estate in France, the Chateau de Farcheville, as collateral in the bankruptcy proceedings. A $60 million sale of that property fell through in August, apparently helping to precipitate the cash squeeze.
The Story Mill development, which is less than two miles from downtown Bozeman and received approval form the Bozeman city council in December of 2007, was slated to have 1,200 homes and 140,000 square feet of commercial space. The developers promised to make it a pilot project for sustainable neighborhood design, and it was lauded as an example of how Western towns could grow without sprawling.
But even without Edra Blixseth’s financial troubles, it’s not clear that the project would have been viable in the current economic climate.