ALEXANDER, N.D. – An oilfield housing camp developed by two men accused of defrauding investors in a $62 million Ponzi scheme will likely remain closed.
The Great American Lodge near Alexander, which is owned by North Dakota Developments LLC, closed abruptly in May after the utility company cut power to the facility because of unpaid bills.
The closure occurred days after the U.S. Securities and Exchange Commission filed a civil complaint against North Dakota Developments and its owners, Robert L. Gavin and Daniel J. Hogan, alleging they had defrauded investors since 2012 for Bakken housing projects that were never finished.
The Great American Lodge, which was partially completed, was the only North Dakota Developments project that was operational.
A receiver appointed to protect assets involved in the case said costs to reopen the lodge would be substantial and he doesn’t think it would be financially feasible.
Gary Hansen, the appointed receiver, wrote in a status report filed in U.S. District Court that water was being trucked onto the site every few days at a considerable cost, because of an issue with water lines.
In addition, the facility has outstanding bills totaling more than $900,000 and that total is likely to grow, Hansen wrote. The receiver’s review so far has identified about $175,000 in liquid assets for North Dakota Developments.
The Great American Lodge, which is between Watford City and Alexander, has a building with food services and laundry facilities, 430 housing units available for rent and 70 more units under construction, Hansen wrote.
It housed about 160 people, including 18 employees of the lodge, when it abruptly closed, said Darrell Pullen, who managed the camp until early February.
Some of the displaced residents found housing in the area, but many had to move to Grassy Butte or Williston to find affordable housing and are now having to commute farther to work, Pullen said.
“It’s affected a lot of people,” he said.
Pullen said he hoped the lodge would reopen, and he gets calls every day from people who would like to purchase it.
“We did so much work there, I hate to see it abandoned like it is,” Pullen said.
Hansen also reviewed the other housing projects that were sold to investors:
— Great American Lodge, Culbertson, Mont.: That site was not operational, but has about 132 housing units that are partially complete. North Dakota Developments attempted to get a certificate of occupancy for 44 of the units in the spring of 2015, but failed the required inspection.
— Transhudson, Parshall: The lodge construction site had been inactive for an extended period of time. It was at the ground-leveling phase only with two construction trailers and no buildings on site.
— Great American Lodge – Watford City East: Government officials did not approve the project and construction did not begin at the site.