The Grand County Commission voted unanimously Tuesday, March 2 to approve rules and regulations regarding its High-Density Housing Overlay, rules that developers say imperil their plans for building nearly 300 units of local workforce housing.
The decision transpired after local developers and county officials realized weeks ago that, at the cusp of finalizing the construction of units that have been in planning for over a year, the parties had different understandings of the rules under which they were operating.
The Grand County Commission voted to, county staff say, “clarify” that the rules are that only locals can purchase the units built under the plan, which promotes affordable housing by allowing for higher densities and, they say, limiting ownership to locals.
Developers and former staff that wrote the High-Density Housing Overlay say that the ordinance allowed for anybody to own the units and solely but crucially require that they be occupied by locals, rather than operating as second homes or short-term rentals.
Before the vote, Grand County Commissioner Kevin Walker suggested a potential solution that could work for both developers and the county: Seek outside investment as a means of enabling the projects.
“If someone needs outside investors, there’s nothing that prohibits outside investors from investing in your development partnership or company,” Walker said. “I think that’s the way to do it.”
Walker provided his suggestion for developers like Courtney Kizer, a local developer who, alongside her husband Steve Evers, is approved to build 34 new housing units under the High-Density Housing Overlay at a development called Murphy Flats.
However, Kizer said that following the suggestion would undermine the intent the commission had when it passed the rules and regulations and the intent of the High-Density Housing Overlay itself.
“We could totally do that,” Kizer said. “But if the whole point is for local ownership, that’s the reason we moved away from that strategy and toward condominiums.”
Condominiums are living spaces that are part of a larger structure — like a single unit in a duplex or apartment building — that are independently sellable. Kizer said that, under the understanding of the High-Density Housing Overlay, this would have promoted more local ownership.
However, to be able to finance their project under the new rules and regulations, Kizer said that she would have to court an outside investor to buy a stake in her and her husband’s Limited Liability Corporation. From there, their LLC would have enough funding to build units that they rent to locals, but she said the units would effectively be under the control of outside investors at that point.
The peculiarity is the result of the county’s interpretation of the code, which does not concern the ownership of a unit per se, but rather bans the sale and renting of units to unqualified households.
Businesses and nonprofits are included in the definition of household, per the rules and regulations that the county passed Tuesday. A business qualifies to purchase an HDHO unit if its owner lives in Moab, and a nonprofit qualifies if a majority of its directors are local.
Grand County Commissioner Trisha Hedin said her decision to back the rules came from a belief that the commission is “not here to serve the interests of developers and Realtors and lawyers,” but rather, “to provide” for locals.
Commissioner Sarah Stock said of the vote that she hoped the decision “encourages confidence” in the High-Density Housing program, and she admonished approved developers under the ordinance to “embrace this program because otherwise you’re not going to sell the units.”
Commissioner Gabriel Woytek pointed to the lack of shared understanding between developers and the county as an issue that could be addressed as the county looks to hire new staff for its planning department.
“As we’re filling some vacancies in the planning and zoning department, [I hope] we look at this as an opportunity to have staff that’s really well-aligned and capable of avoiding these types of misunderstandings,” Woytek said.
In her remarks, Grand County Commission Chair Mary McGann said that she came to the decision after struggling to separate herself emotionally from the developers, with whom she had worked closely in developing the High-Density Housing Overlay. McGann had lobbied to include in the plan the property where Kizer and Evers are building.
“This has been really hard for me,” McGann said.
Developers may appeal Tuesday’s decision and its consequences with the county — a necessary step before a lawsuit is likely brought against it. Grand County Attorney Christina Sloan said she was prepared to litigate the matter in court, if it comes to that.
Also: MRH is expanding
Moab Regional Hospital is planning a $57 million expansion that will add services, such as a walk-up pharmacy, expanded mental health services, outpatient addiction treatment, and streamlining and improvements to many other services that its CEO says will impact nearly every part of the hospital.
“There’s almost no spot of the hospital that is left untouched,” said Jen Sadoff, the CEO of Moab Regional Hospital. “This will both refinance our existing debt and provide us the facility that we need for the area moving forward.”
Residents who visit Moab Regional Hospital for medical services might fear that a planned expansion could increase costs of doctor’s visits and operations, but according to Sadoff, this will not be the case.
March 1 was the hospital’s earliest opportunity to refinance a loan that it took out in 2008, just prior to the Great Recession when interest rates were much higher than they are today. Despite incurring a roughly 5% penalty for pulling out of the old loan, historically low interest rates will provide savings so that the hospital’s annual debt payments will decrease.
However, to secure the loan from the U.S. Department of Agriculture, the hospital has to first build the facilities that the loan is funding, which will in turn reduce the risk assumed by the USDA in providing the funds.
And, to fund the building, the hospital must secure an interim loan. While it plans to go through Zions Bank as the loan administrator, Grand County will act as a pass-through, allowing the interim loan to be tax-free, saving as much as 30% in debt service costs.
Before the bond can be issued, Grand County must hold a hearing to allow citizens to contest or acknowledge the charitable nature of the loan and its recipient. Thus, the Grand County Commission voted Tuesday, March 2 to initiate a public comment period that could end with such an approval next month.
The virtual, public hearing is scheduled for April 6.