Courtesy of Ex Utah Development, LLC
The military authority that controls thousands of acres around the Jordanelle Reservoir and oversees the construction of the Mayflower Mountain Resort project voted Tuesday to approve a debt of more than $ 250 million to help fund the project.
The loan is only a fraction of the $ 3.2 billion that is expected to be spent on the complex in the project’s first five years, according to documents accompanying a presentation to the Military Installation Development Authority, or MIDA. The vast majority of this money is expected to come from private sources.
New York-based developer pursuing the project, Gary Barnett, flew to attend the MIDA board meeting on Tuesday, telling officials he was “very, very confident” that the project would be built. and urging them to issue the debt.
The loan comes on top of the $ 170 million the resort has secured for infrastructure construction, with work in progress and major aspects already completed. A first shovelful of earth is scheduled for next week for the first hotel.
“This was only possible because we have the support of MIDA, the support of the people of Utah, the support of our local team,†Barnett said. “And we are very grateful and hope that you will be able to support this link.”
Council members unanimously passed a resolution to issue no more than $ 260 million in bonds for the project area.
MIDA’s eight-person board of directors is chaired by Utah Senate Speaker Stuart Adams, and includes a local representative, Wasatch County Councilor Steve Farrell.
Barnett is the force behind Extell Development, who is known for building the New York skyscrapers. Extell’s local branch, Ex Utah Development, is developing the complex.
The ski resort is planned for the eastern flank of Deer Valley Resort in Wasatch County. The plans call for two base areas, a handful of ski lifts, three hotels, 1,560 residential units and 250,000 square feet of commercial space.
One of the hotels will have 100 rooms dedicated to military personnel, a “military welfare recreation” facility that is the reason for MIDA’s involvement. The room block is the latest replacement project for a small ski lodge near Snowbasin Resort that the U.S. Air Force used before the 2002 Olympics.
The old Hill Haus castle has turned into a multi-billion dollar complex that Barnett says will be the first of its kind built in 40 years.
The land has long been envisioned as a natural extension of Deer Valley and a new gateway to the east, although no agreement is in place for Deer Valley to operate the complex. Mayflower has an agreement allowing the ski lifts to start on their property and connect to Deer Valley. It is still possible that the resorts operate as two separate ski areas.
“What we have in mind here, ideally, is to expand the Deer Valley Resort, but there’s a possibility that this could be done with someone else,†Barnett said. “But we are currently in very active discussions to make it perhaps the No. 1 ski resort in the country.”
The board of directors voted to issue the debt against future tax revenue that is expected to be generated by the resort’s facilities under an arrangement commonly referred to as tax increase financing. As the planned hotels and luxury homes are built, the value of the land is expected to increase, along with the property taxes it generates.
MIDA will receive 75% of this increase in tax revenue for 25 years, according to a presentation at the board meeting, and more than 50% for an additional 15 years. The remainder of the increased property tax revenue is to be distributed among local tax jurisdictions, including Wasatch County and Wasatch County School District.
MIDA will also capture sales tax, resort communities tax, and other resort-generated fees and taxes, depending on the submission.
If the hotels are not built, the value of the land would remain the same and no tax increase would be created. To guard against this possibility, MIDA officials have indicated that Barnett’s Ex Utah company is guaranteeing the bonds, saying his company will create enough value in the region to cover the payments. According to the report, Barnett has guaranteed the construction of two “cornerstone†hotels or their taxable equivalent.
“We guarantee with our entity here, has a (economic net worth) of over half a billion dollars, which will guarantee at least the construction of two hotels with associated residential,†Barnett said. “All of this together will provide sufficient hedging to cover the interest and principal cost of these bonds, assuming we can do so at rates we think we can.”
The latest round of funding is expected to result in around $ 170 million in “ski-centric” improvements, officials said.
These are to include $ 115 million for the Morale Recreation and Wellness conference hotel and $ 53 million for another of the resort’s planned hotels, fractions of their planned costs of $ 400 million. . Other improvements the bond will fund include a public plaza, washrooms, loading dock and other uses at the back of the house, according to the report.
The bonds are also expected to provide $ 57 million in working capital, $ 19 million in debt service funds and $ 6 million in issue costs.
