ST. GEORGE — The developer of a planned golf resort and retail complex is seeking monetary aid from Ivins City toward the building of a parking structure and additional enhancements to the future property.
The Black Desert Resort at Entrada, which is currently under construction, is seeking $5 million in funding from Ivins City to be paid through additional taxes on residents of the new property and deferred tax payments for the developer.
The entrance to the resort would be on the southern side of the “Mustangs” traffic circle on Snow Canyon Parkway opposite of Splitrock Drive. The developers see Black Desert Resort as a destination combining golf, a spa, hiking trails, culinary school, residences and a hotel, as well as restaurants and a retail space that could also serve the locals.
The request has Ivins City officials facing the kind of questions about public financing of private projects that is common to growing cities but is a first for this 23-year-old municipality.
“This isn’t like saying we have a 50-home development and we would like help,” Mayor Chris Hart said during a previous council meeting. “This is a large thing for any city, especially ours that has no experience with this.”
Ivins City Council member Sue Gordhammer expressed similar skepticism as some of her fellow council members regarding whether the residents of Ivins are ready to pay part of the price tag for a private resort.
“I understand that Black Desert is asking Ivins to join them in their vision for the Black Desert Resort and Culinary Village; however, I’m not confident that the majority of Ivins residents share the vision of a large resort with an adjoining dining and retail area,” Gordhammer told St. George News.
The council has been struggling with what to do about the request from the resort’s developers since it was first presented to the council at its Nov. 19 meeting.
The council approved a permit to develop the property into a resort in July. At the time, the developers – Patrick Manning of St. George and Enlaw LLC of Alpine, Utah – did not make any request for aid from the city, nor did they indicate it would be needed.
Manning did not respond to a request for comment from St. George News, but at the November meeting, he told the council that one of the reasons why additional funding is needed is because the city did not allow for single-family homes in its permit.
“We’re kind of in an awkward spot that we can’t do cheaper development, as in single-family, because it was previously rejected,” Manning told the council. “Financing has changed, cost of lumber has changed. So there’s not a Plan C.”
Manning also has said the majority of public funding would go toward the construction of a 1,400-space parking structure that would mainly accommodate the retail and restaurant complex, which will be open to all area residents.
In December, City Council member Dennis Mehr said if the developer wants a parking structure, they should pay for it.
“Can they do this project without our incremental financing? … The answer is ‘yes,'” Mehr said. “It may not be this grand thing initially without a parking structure, but when i think of a parking structure, I think of an eyesore.”
However, fellow council member Jenny Johnson, while not outright coming out in support of the public financing, said it’s not just about a parking structure.
“We’re not just paying for a parking structure; we’re paying for shops and eateries,” Johnson said. “The question is, is that something we want?”
To raise the city funding, the resort developer has proposed utilizing tools known as public infrastructure districts – or PIDs – and a community reinvestment area – CRA.
In a nutshell, the PID would have the city provide around $34 million in bonds that would be paid back through increased property taxes for residents who move into the resort – an additional $6 for every $6,000 assessed.
The CRA would have the developer defer their own property taxes over the next 10 years to provide it with an additional $5 million in funding.
It’s the CRA that is a sticking point among council members, even though the developer has come down from their initial request in November of $28 million in deferred tax payments over 20 years.
“I’m ok with the PID request but I have concerns about the CRA request,” Gordhammer said. “The CRA is not well supported within the community. It’s very large in terms of the ask, and I have concerns as to whether or not Ivins residents will benefit enough from the parking structure to justify the delay of the tax payments.”
Matt Loo. former economic development director for St. George and Washington City, has spoken with the council as a consultant about the use of a PID and CRA. Loo said CRAs have been used in St. George for the Blue Bunny, later Dean Foods, factory, as well as Washington City for the planned auto mall development off Exit 13.
“It really helps when the city is in the driver’s seat and the city is making visions and plans for what they would like to see,” Loo told the Council in December. “Growth is coming, and with growth comes cost.”
Loo said the CRA is another way of looking at a development paying for itself and paying for other services in the city.
“It would be the creation of jobs, the increase in tax revenue,”
Black Desert Resort will be presenting information to the council Thursday night purporting that while the city would lose $5 million in tax revenue over the next 10 years, it would receive a $10 million gain in revenue from the resort in the form of room, sales and property taxes – though Manning told the council in November that “the estimated revenue is based on assumptions.”
While being open to the proposal, council member Cheyne McDonald has said he feels stronger about the PID using bonds, as opposed to the lost tax revenue of the CRA.
“As I look at this – I try to look at this from a business standpoint – my initial reaction is the PID has a lot less risk,” McDonald said.
For Mehr, he said he doesn’t believe there should be “a motivation for us to attract growth here.”
“We don’t need to incentivize a developer further,” he said. “We have the eggs, flour and the ingredients. We have a beautiful community.”
The Ivins City Council will meet to further discuss the proposal at 5:30 p.m. Thursday at Ivins City Hall.
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