Governments making slow progress on CRAs
by Bill Boyle
San Juan Record Editor
It may take a while to work out the details, but a new economic development tool may be created for use in San Juan County. A Community Reinvestment Agency (CRA) could allow local business ventures to partner with taxing entities to develop infrastructure.
Two projects have already expressed an interest in using the CRA funding mechanism to develop infrastructure for their projects.
They include Bluff Dwellings, a 54-unit resort that is under construction on Highway 191 in Cow Canyon. Jared Berrett is developing the project, which would cost approximately $6 million.
The second project is a 70-unit lodging property on the north end of Blanding. The project, which may be built as a Marriott Fairfield Inn and Suites, would be located west of Highway 191 across from the Blanding Cemetery.
Phil Lyman is involved in developing the project, which would be a $9 million investment.
Berrett and Lyman presented information regarding their projects to the San Juan School Board at the July 10 school board meeting.
Since a CRA project would require approval from the taxing entities, the school district is taking the lead in developing the criteria for a CRA.
The school board discussed the projects at length and started the process of addressing the issues. The board did not make a decision at the meeting and has initiated a long-term process to look at the CRA concepts.
“I’m feeling under pressure, and I don’t like it,” said School Board President Steve Black at the July 10 meeting.
Over a series of meetings, the school board is developing a series of guiding principles to lead the process. One school official estimated that it may be until December before the school board is ready with a recommendation.
One of the challenges faced by the taxing entities is determining what projects are eligible for a CRA. That challenge is compounded in rural areas and smaller economies.
The CRA concept has been used in larger areas on the Wasatch Front, in some cases to build sports venues and convention facilities. Box Elder County has used a CRA for projects in industrial parks.
The CRA has not been used as often in rural or frontier areas. There are a host of challenges in extending the CRA to smaller areas.
The basic concept is that a portion of the cost of the infrastructure will repaid by the property taxes generated by the project. The property tax payments are approved for use only if the new development is actually built, so it is a “post-performance” payment.
For Bluff Dwellings, the developers are seeking approximately $458,000 to develop turn lanes into the property from Highway 191. A portion of property taxes would go to the project over the subsequent 20 years.
School board members suggested that one of the challenges with this project is that it is already underway.
Jared Berrett explained that he received notice of the need for turn lanes after the project had started. He added that without the turn lanes, his project can get approval to open only 18 of the 54 rooms.
Berrett said his project only works if all of the units can be used. “Unless I get 50 plus rooms, it won’t work,” said Berrett, who added that he would “close down, move away, and teach” if he wasn’t able to complete the project.
The Blanding project would seek up to $1.25 million for a variety of “horizontal infrastructure” improvements, including roadways, parking, curb and gutter, storm drains, utilities, and landscaping.
Lyman explained that the project is still in the developmental stages and a CRA project “changes our ability to get financing for a project like this.”
The private projects will secure their own financing. The CRA portion of the project will become part of the funding package.
Lyman described the project as a “flagship hotel at the gateway to Blanding.”
School board member Lori Maughan asked if one business will have to pay the full share and others will get a break. She suggested that a government subsidy is being paid by the other taxpayers, including competitors.
The developers suggested that the projects will pay 100 percent of the infrastructure costs in subsequent years through the property tax payments.
The school district guidelines are under development and may include an analysis of the business model, the effectiveness of project leadership, feasibility of the project, and benefits of the project to the community, to the school system, and to future growth and development.