Tooele Transcript Bulletin – News in Tooele, Utah

August 7, 2012
The Resilient Developer

Mathew Arbshay knows what it means to win big and lose big. And the man behind the unfinished Central School renovation says he’s not done yet. 

The conversion of Central School into a luxurious retirement condominium community was a labor of love for Mathew Arbshay.

However, Arbshay ended up losing $3 million of his own money and 1,600 acres of property he owned on the south end of Tooele City when the housing market collapsed and the recession turned away buyers before the condominiums could be finished or sold.

It was the third time the Iranian-born immigrant had lost everything.

Arbshay, a civil engineer by training, owned a large construction firm in Tehran, Iran. After the Islamic Revolution of 1979 sent the Shah of Iran into exile, Arbshay’s company continued to build government housing projects under the new regime of the Ayatollah Khomeini. But Arbshay, a Christian, said the new Islamic regime became increasingly hostile to him.

“There were some people in the new government that worked to keep me on,” said Arbshay. “And other elements of the new regime that wanted to do away with me.”

One day, in 1982, Arbshay showed up to work in his chauffeured limousine only to find he’d been locked out of his building. He looked up and saw his workers at the windows looking out at him with tears in their eyes.

“I got back into the limousine and told the driver to take me to the bank,” said Arbshay. “I new something was going on.”

At the bank, Arbshay found that his business and personal accounts had been frozen. He left the bank to find out that his limousine driver had taken off with the limousine.

The government had taken over his business.

Fearing for his safety, Arbshay sought protection at the Swedish embassy.

“The Swedish ambassador was my neighbor and we were friends,” said Arbshay. “I stayed in the embassy for four days and then they had someone show me a path over the mountains of Iran into Turkey.”

Arbshay said he traveled with a group of five or six other people by car from Tehran to a small border town in Iran. From there, the group set out on foot with a guide for Turkey. The hike took 36 hours with the group taking only occasional breaks.

Arbshay arrived in Turkey with $2,000 in his pocket and made his way to the Mediterranean port of Mersin with the intention of traveling from Mersin to Cyprus. However, he was stopped trying to board a ship in Mersin and was thrown in jail because he did not have a valid passport.

“I was in jail for five weeks,” said Arbshay. “It was miserable. The jail was in a basement and it was summertime. I lost a lot of weight and came close to dying before they let me out.”

Once out of jail, Arbshay was able to travel to Cyprus where he caught a flight to Spain — the only country that would accept Iranians without a passport at the time.

“There was a line of thousands of Iranians at the embassy in Barcelona all wanting a visa to travel to America,” said Arbshay. “It was kind of scary.”

The cost of a visa was $5,000, according to Arbshay, who went to work processing paperwork for an immigration attorney to earn his own visa.

Arbshay’s first stop in the United States was in Texas, where he stayed with a former employee for six days before leaving for California.

“There were a million Iranians in California so I thought I would fit in better there,” said Arbshay.

He set out for San Francisco, where he worked for a year as a construction superintendent. He then left San Francisco for Bell Gardens, Calif., a community south of Los Angeles, to take on a job remodeling a clinic.

After completing the remodel, he went into the business of flipping expensive homes in the affluent communities on the Palos Verdes Peninsula. However, the savings and loan crisis of the late 1980s and early ‘90s caused Arbshay to lose his business and his personal fortune once again. The closure of several savings and loan associations caused several buyers to withdraw their offers to buy the homes Arbshay was remodeling. During the following recession, the real estate market in California slowed down tremendously, leaving Arbshay with no buyers for his homes. He turned over his property to the bank that financed him to cover his outstanding debt.

Broke and without work, Arbshay turned to an Iranian friend that owned a supermarket in Bell Gardens and opened a stand selling cheap pots and pans imported from the Philippines.

“I had to do something to make a living, pay rent and so I could eat,” said Arbshay.

The supermarket owner introduced Arbshay to other store owners who helped him expand his pot-and-pan import business. In the process of marketing his cheap imports, he met a Japanese women that was trying to sell higher-quality housewares.

“A mutual friend who thought I could help her market her products introduced us,” said Arbshay.

The Japanese woman told Arbshay that she had a large piece of land in Utah in the middle of nowhere and invited Arbshay to come with her to Utah to see what they could do with the land.

Nowhere, as it turned out, happened to be Tooele.

Arbshay said his Japanese friend had property from Bear Lake to Provo, but he chose to settle in Tooele.

“The people in Tooele were more accepting of guy like me — Iranian born and non-Mormon — than other areas,” said Arbshay.

Arbshay arrived in Tooele in 1992 and started work as a contractor, building homes on 3 O’clock Drive in the first phase of the Rancho Tooele subdivision.

“I recall building homes and waiting in my jeep on the street for prospective buyers to show up,” Arbshay said.

Arriving in Utah with little cash, Arbshay made over $1 million one year building and selling homes from Rancho Tooele to Stansbury Park. In 1997, he bought the Utah Industrial Depot from Tooele City less than a year after it had passed from the Army’s hands.

Arbshay said he bought the property for $11.6 million, managed the UID for two years, and sold the property to its current owners, Depot Associates, for $25 million, after investing another $7 million in property improvements.

In 2000, Arbshay started talking to friends in Tooele about a desire to do something for the community.

“The people of Tooele were very friendly and accepting of me when I moved here,” said Arbshay. “I love Tooele and I wanted to do something for the community.”

One of those friends was John Hansen, a Tooele native who later would serve on the Tooele City Council.

“John showed me the old Central School,” said Arbshay. “He told me that if somebody didn’t do something the city was going to tear the building down and build a new police station on the property.”

Central School had sat empty for five years since the school district closed its doors. The building was in limbo. The district could not afford the funds to remodel or tear down the 1929 edifice, so it sat empty and deteriorating.

One suggested plan for the school was for either the school district to donate it to the city or the city to buy the building for a nominal price. The city could then demolish the building and use the property.

It wasn’t hard for Hansen to convince Arbshay that the building should be saved.

“The building has a lot of memories in it for the people of Tooele,” Arbshay said. “Over 43,000 students attended school in this building over the years it served the community.”

Arbshay bought the building from the school district for $100,000 in 2001.

Arbshay’s vision for the building was for condominiums for people over 55 without children.

Although the building had once housed noisy school children, in its old age the building deserved the respect of a quiet community with an atmosphere similar to a luxury hotel, Arbshay said.

It took $12 million — $3 million from Arbshay, $5.1 million from Anglo American Bank, $3.3 million from Sea Ray Investments, and $750,000 from Tooele City’s RDA — to get the building into its present condition.

Asbestos had to be removed, the structure had to be made earthquake-proof, interior ramps had to be turned into stairs, and elevators added. Interior walls came down to make room for 8 condo units, with one- and two-bedroom units on each floor.

Today the third-floor units are finished and the second- and first-floor units are near completion. The third-floor units have $100 per square-yard carpeting, custom maple cabinets and granite counter tops. The walls and ceilings are smooth-finished with recessed ceilings and crown molding.

The project plan called for selling the condo units at $400,000. Arbshay said he had informal commitments from 18 buyers for the 32-unit complex. Then, in 2007, the housing market collapsed, the recession hit, and the buyers went away.

As the recession wore on, Arbshay struggled to keep current with loan payments on the project.

In July 2009, Sea Ray Investments filed paperwork starting foreclosure procedures on the Central School property. Arbshay scraped together a little over $1 million dollars, but he still owed Sea Ray $2.5 million when the company foreclosed and took possession of the building.

Altogether Arbshay lost his own $3 million investment, the $1 million he paid to Sea Ray, and 1,600 acres of property that was used as collateral to pay off other debtors.

Despite losing ownership of the former school, Arbshay said he still provides security and protection for the building without reimbursement. During the winter of 2011, one of Arbshay’s employees discovered a leak in the roof. Arbshay paid $7,000 to have the leak repaired. He also pays to have broken windows replaced.

“I just love this building,” said Arbshay. “I want to make sure it is well taken care of for the people of Tooele.”

His hope is that somebody will buy the building and finish the project.

“It will happen. Sooner or later, somebody will buy it,” said Arbshay. “And if they want any help, I am ready to help in any way.”

Arbshay said the remodeling and new life brought to the building was worth the loss of his personal fortune.

“I would do it again,” said Arbshay. “Preserving the building and helping the community are worth the loss.”

Tooele has been Arbshay’s home for 20 years. He has not been back to Iran since that day in 1982 when he left on the trek for Turkey.

“I am comfortable here,” said Arbshay. “I am satisfied that this is my home.”

During the 30 years he has been in the United States, his parents and an older brother and sister in Iran have passed away.

Arbshay, 70, said despite the extraordinary peaks and valleys of his life, he’s not yet ready for a quiet retirement.

“I’m basically penniless,” said Arbshay. “I’ve been there before and I’ve come back. I will do it again.”

Arbshay said he still feels the need to be working and contributing to the community.

“I want to be back in business,” said Arbshay. “I need to be working myself and providing jobs for people in the community again.”

Tim Gillie

Staff Writer at Tooele Transcript Bulletin
Tim covers education, Tooele City government, business, real estate, politics and the state Legislature. He became a journalist after a long career as an executive with the Boy Scouts of America. Tim is a native of Washington state and a graduate of Central Washington University.

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