435 Podcast: Southern Utah
Explore the heartbeat of Southern Utah with the 435 Podcast, your go-to source for all things local in Washington County. Stay ahead of the curve with our in-depth coverage, expert analysis, and captivating interviews. Whether you're a resident or visitor, our podcast is your key to unlocking the latest happenings and trends in St. George and the surrounding areas. Tune in now to stay informed and connected with our thriving community!
435 Podcast: Southern Utah
PART 2: Navigating Land Exchanges and the Future of Infrastructure
What if the intricate dance of federal land exchanges and urban development could change the landscape of Southern Utah? Join us as Kyle Pasley, the insightful Managing Director for SITLA, unpacks the complex story behind the Northern Corridor and its decade-long journey through political and logistical challenges. With tales of expired permits and the daunting tug-of-war between development and preservation, Kyle provides a compelling narrative on how these factors shape the future of infrastructure projects in the region.
Listeners will learn about the ongoing battle to balance development pressures with the preservation of natural beauty, especially in areas like Green Springs. Kyle shares the often-frustrating experience of navigating federal government obligations, shedding light on the critical yet unseen back-and-forth that influences land exchange agreements. Discover how the community's response to increasing traffic pressures and the quest for economic growth tie into broader themes of strategic growth management and housing affordability.
From water conservation initiatives to the economic realities of infrastructure costs, we explore the broader implications of growth in rapidly evolving communities. Kyle offers insights into how SITLA's projects in Warner Valley and Desert Color are paving the way for sustainable development, emphasizing lessons learned from regions like Las Vegas and Tucson. Tune in to understand how strategic planning, infrastructure prioritization, and community engagement play vital roles in shaping a sustainable future for Southern Utah.
Guest: Kyle Pasley. Managing Director, Real Estate, SITLA
LinkedIn Webpage: https://www.linkedin.com/in/kyle-pasley-5774949/
Eric Clarke Episode - https://www.youtube.com/watch?v=Kz6hgYTbEtE&t=17s
Holly Snow Canada Episode - https://www.youtube.com/watch?v=-sZkUWxNZfk&t=1692s
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[00:00:00] Intro.
[00:06:01] Land Exchange Agreement Challenges.
[00:14:49] Development, Growth, and Affordable Housing.
[00:22:15] Zone 6 Infrastructure and Affordable Housing.
[00:35:43] Water Conservation and Development Perspectives.
Welcome back to another episode of the 435 podcast. This is part two of our two-part series with Kyle Paisley, the Managing Director of Real Estate for SITLA, the School and Institutional Trust Lands. If you didn't catch episode one, it'd probably be a good place to start. We get a deep dive. We go deeper into the Northern Corridor and their role in that, as well as Zone 6, what they're doing with affordable housing and then we talk about a couple other options.
Speaker 2:So please like and subscribe, share this with friends and enjoy the episode guys From the Blue Form Media Studios this is the 435 podcast, the pulse of Southern Utah.
Speaker 2:I've got a lot of good friends and we've got a lot of good relationships with the federal government, so I'm not here to bag on the federal government, yeah, but I'm going to bag on the federal government for a minute. Okay, they have taken forever to fulfill that obligation. We're about halfway done, right, and of course, part of that is we'd said halfway done. Getting out of the land in Green Springs Okay, so we still have almost 7000 acres in Green Springs, plus another 7000 acres out in the land in green springs. Okay, so we still have almost 7 000 acres in green springs, plus another 7 000 acres out in the beaver dam wash. Okay, so we get around to 2016 and it's time to renew that contract. They still have not exchanged us out of the property right. In the meantime, you've got the whole uh washington county land bill that that bennett and matheson did that talked about the northern corridor and it'd been on our maps and on our plans, and I'll let eric and holly bash that one out right, yeah, because they, they don't.
Speaker 1:They don't detail exactly what the road is, but they say a northern roadway right basically call it there's.
Speaker 1:There's some other road that would connect basically east to west on the northern side of town and it doesn't detail exactly this particular plan. But I think the argument that surf southwest utah is is saying is that basically, uh, red hills parkway uh is, is that road that's in their argument, is that that's the road that uh can suffice or satisfy that northern roadway? I can't remember exactly how they detail it in the stipulation but it's basically a northern roadway.
Speaker 2:Well, and that's fine. That's the argument and she can make that. But starting in 2009, as soon as that Washington County land bill was done, all of our plans with public works and all of our plans to develop green springs had the terminus of the northern corridor in green springs and so all of our plans showed that from that time going forward. So that was in working with matheson and bennett's office. That was always our understanding is that it would go somewhere and terminate there, right? I mean the exact way that it would squiggle through. That wasn't necessarily planned out, but it would terminate right there in.
Speaker 3:Green Springs, Do you? This might be a little bit of a loaded question, but-.
Speaker 2:Well, maybe I got a loaded answer.
Speaker 3:Do you think the timeline on the federal government taking so long, is that a political move or what like? What, what? What's your thought?
Speaker 1:on priority list. Issue is it just.
Speaker 3:The movement of the federal government is forever. What do you think's going on in the back end? So yes yes, all of the above so sure there's politics with that.
Speaker 2:You've seen different administrations come and go, some that want to move quicker than others, and it's contingent because we're exchanging land in other parts of the state, right? So now, one of the things that slowed some of this down, too like for the private individuals and not for us necessarily, was that, you know, harry Reid made it impossible to trade land outside of your state, harry Reid.
Speaker 1:Oh my gosh, I thought Harry was such a good guy. Comes back to Jeremy Johnson. Yeah, he's connected to Jeremy.
Speaker 2:Anyway, but that's a segue. So there's, all of those things are involved, right? I mean there's good people at the federal government, in the BLM and others and Fish and Wildlife that I've worked with that want to try to see this get done, but it gets caught in the cogs and the wheels.
Speaker 1:Well, even even eric detailed on on our episode that it was the fish and wildlife came to him in 2016 to say, hey, let's figure this out. Yes, so it wasn't like the county has endlessly pushed this right and so that's where. So the idea of the corridor, it didn't. It didn't come, it wasn't formulated out of sitITLA. It was separate from that.
Speaker 2:Yeah, it wasn't. We didn't push the formation of the Northern Corridor, right. I mean that's a function of looking at traffic and projections and the needs of the community, right. But for us obviously it has a benefit because it terminates. Because it terminates and, like I said, starting in 2009, our plans is we did the North Green Springs area that abuts that. All of our engineering plans showed a terminus there and the Washington Parkway that terminates there is built to be the Northern Corridor. The right-of-way was set aside, it was built and graded. It's not built all the way out, but the right-of-way is there and everything's built.
Speaker 1:so it's disingenuous to say that that was not something that we intention, or the the clear direction from 20 2009 until today, right the the assumption is that that road was going to continue and connect somewhere on the on the west side of the county right and we we had we had done the washington parkway, we would connect into milepost 13, so that, for us, was something we'd always anticipated.
Speaker 2:So now let's fast forward to 2016 and just how we're involved. Right again, I won't get into the machinations that eric and holly can go back and forth on, but where we're involved, we get to 2016, the incidental take permit expires, and now it has to be renewed. So we're looking. We get to 2016,. The incidental take permit expires and now it has to be renewed. So we're looking at this and saying, look, federal government, you have not exchanged us out of this property yet. Now you know. I mean there's, that's fine, we use it for equalization of values and other things. I mean there's some reasons behind that.
Speaker 1:So, so, real quick, the the property that they're exchanging out. So like at the very top of green springs, like where it the houses end, right, how much of that land was supposed to be exchanged out?
Speaker 2:uh, everything in the boundary that's blue so.
Speaker 1:So if you, if I look at it though, because it's basically and I'll, I'll kind of you can kind of see the map right. So there's a lot of blue there yeah, there's how much of that?
Speaker 2:7 000 acres of blue, okay. So if you're looking at the total space, yeah, I, if I'm looking at that correctly, everything above the red line north, uh, is the reserve. So everything above that is what's left to be exchanged out, okay, and to pay us for our land. Got it Okay?
Speaker 2:So, that was the agreement. So we get to 2016 and we're we're halfway done. So we have to evaluate are we going to be patient and just do this or not, right? And so we talk and the you know, the federal government says, no, we're going to continue, we're going to do this, like, okay, we're going to give you another chance to keep doing this. Right. And we're, we're patient. There's reasons for us to be patient, right. And then the Northern corridor. They say, well, we want the Northern corridor. And they, they go to battle about that. And we say, well, look, it's always been shown to terminate here. That's in our plans, it's in our engineering, that's been in our communications coming from Matheson and Bennett days. So what if we do this? We think right, and at this point it was anecdotal there are lots of tortoises out in Toniquent, right?
Speaker 1:So we have a lot of it's one of the highest densities in the county.
Speaker 2:It's one of the highest densities, but we didn't know that biologically at that point. But we said, look, why don't we look at that? There's a lot of hiking trails, there's a lot of biking trails, mose Valley, mose Valley, lots of things that are used, that we've allowed to happen, even though it's not public land, which has been fine, right, and we'd like to see it, we'd like to see it preserved at that point. So we go back and say, look, what if we take the part that has all of these recreational amenities on it and we put that in the reserve as a new zone? Right, there's enough tortoises there to make it worth your while, right, like, find that out. But if there are, let's put that in there. And for the 300 acres you're going to need for a right of way, we'll put 3000 acres of new habitat in. That'll be a 10 to one right Ratio of remediation for this. And then you can put whatever else you want, feds in. If you want to lock up other stuff, it's up to you. But we'll do that.
Speaker 2:And the reasoning behind that was so that we could get the incidental take permit renewed. Number one and number two we looked at it and thought well, with the northern corridor that's going to increase the traffic counts to milepost 13. And all of our commercial property? There are 200 acres of commercial property, all of our commercial property. There are 200 acres of commercial property. That is a significant enough uptick in value for us to justify doing this deal. So we did that, but still with the idea that the land would be traded out or bought Right. So the land is not just given up. Zone six You're talking about zone six, any of our land.
Speaker 1:Right Is not just given up.
Speaker 2:Zone six, you're talking about zone six. Any of our land right is not just given. It's in there Now. We made the commitment to lock it up, so what I'll hear Conserve Southwest Utah say is well, you could take this land out at any time, and they're absolutely correct. But that's a slap in the face to our integrity.
Speaker 1:Right, what it's also like. Why would you bring this up anyway to our integrity, Right, what it's also like. Why would you bring this up anyway? Right, Like you. You didn't ever. That didn't have to be a tool to get the permit renewed. You didn't have to do this.
Speaker 2:No, we didn't have to do this. We made other representations about stuff with plants that we have no obligation to do, that we would help with plants and desert color and other things to to do this and make this happen. So we do this and we make this happen and look, all we're saying here. Our side of this is that we feel that we have been patient. We have made agreements with the federal government and they didn't honor them fully the first time and re-up the permit. And now we're coming back the second time and they're saying, well, you know you made the deal, but you're not going to honor it.
Speaker 2:Well, at this point, things on the ground have changed right From 2016 to now. Right Now I look at that and say, well, okay, if that land is not there now, I have other pressing needs in this county. Right, I have to monetize the property somehow. I can't let it sit forever. I put it off as long as we humanly can. I don't want to develop it right. I mean, I have neighbors and friends. I use the property. My deputy that grew up here. You know it sickens us if we have to do it, but it is part of the circle of life right, that we have to do it.
Speaker 2:And so we look at that and say, okay, well, if the feds, if you're not going to fulfill your obligation, and when the lawsuit was brought and they did a sue and settle, no one talked to us. Wow, like we had zero communication on what that was going to be. And all of a sudden they just sue and settle, and I think that probably the same for the county and they can speak for themselves. But so now here we are, we have to do something.
Speaker 1:Yeah, that settlement. I still need to get to the bottom of that settlement because it was described to me as a backdoor deal, meaning it was a settlement with not a lot of input and you just validated. Additionally to you considering it impacts a significant portion of very valuable land for you is that some settlement was done without very many people in the room, and so I'm trying to understand why was that settled the way it?
Speaker 2:was, I don't know. I mean I don't know, but all I can tell you is that we were not consulted on it. We knew it was happening but we were not consulted. Like well, what would that mean if we did this, because it changes the entire tenor of the agreement that we made. Well, I, I think I can represent for our agency. I mean that we make commitments and we stick to them. So if we make that commitment, we will stick to it. Right, they're not wrong when they say, look, we could pull out at any time. We could pull out a zone three at any time. I've got, I've got habitat I can use for mitigation, and tonic went to develop zone three if I want to.
Speaker 1:But zone three is the one above. Above green screen Springs. Okay, yeah, yeah.
Speaker 2:But why? Yeah Right, we made an agreement. We want to stick to that agreement. We were fine with that agreement.
Speaker 3:It's frustrating because it's it's almost like the the federal government is doubling down on the way the government is it works, and then the trust lands is operating like a business and agreeing to their agreements.
Speaker 2:Yeah, yeah, and I I don't you know, I don't speak for the federal government we have a lot of and again I want to make sure this is very clear we have a lot of very good dealings with the federal government. So we've got great deals.
Speaker 1:This is one of the only places honestly that we're really sideways with them on our deals. So when I look at this, it doesn't make sense to me that Zone 6 area there's not a lot of infrastructure. The cost to develop that land is going to be significant. Why is that so important? Like, why is it now? I mean, I know you said we've waited a long time, the RFP, you issued the RFP, right, and then there's this preliminary plan that set out that I kind of thought, looked like a red herring. It looked like, okay, what's true? What's a it? Obviously it's just a proposal, so it hasn't gone through any, you know, approvals. It's just this is one idea. Am I understanding that? Right, this is one idea of what we can do.
Speaker 1:It looked to me like why is that so valuable when you have, you know, all the land that's over there? You know the White Dome area north of SR 7 that could be developed first? Is there a reason why? This is my assumption. It's pressure to see if we could get the Northern Corridor through so that we could rezone. That Is it. Is it hey, we're going to do this rfp to put political pressure on the community to say, hey, it's this or this?
Speaker 1:no no, okay, no, that's way more of a loaded question than mine was.
Speaker 2:I know I, I, I just felt obligated yeah, don't don't sugarcoat it, let's say it's here you think I mean it's just like it to me.
Speaker 1:When I'm looking at the story unfold, I'm thinking like, ok, the if you, if you can't get people motivated to be in favor of development, because, because nobody in the county is like they get excited about development for all these weird reasons like, oh, costco and and and Sprouts and Tr joe's, but they, the. The realization is that the only reason those things happen is because population goes up and there's houses for people to live in, to be able to have those benefits, but when someone's like oh, they're gonna build in my backyard, I don't.
Speaker 1:Or mose valley or or take over an area. That's right. That's really sensitive. I I feel like that battle, you know, keeping people. I think more people are going to rally around not wanting to develop Zone 6 than they would pressuring not to have the corridor. So it's like, okay, I'm going to put pressure over here so that this thing can get done. That seems like the chess piece being played Right.
Speaker 2:So let me talk about that just a little bit. So you see a lot of land, right. You look and you say, well, you've got a lot of blue squares. Development's not that simple. So let's take the case you say, north of sr7, in the white dome, the majority of the white dome is already sold to the nature conservancy as conservation, uh, and the stuff that's not is already under contract with fort pierce, industrial park or other things, and there will be some affordable housing. That'll be part of desert color and those you know, but they're, they're smaller parts, they don't move the needle right.
Speaker 2:We have come to the point and people talk about development and I'm going to get back to zone six, so so hold on. But we've come to the point in the County where we've reached a tipping point. It's not retirees moving here anymore, we need places for our children and grandchildren to live. And anybody that comes out and starts saying, well, we can't build anymore, than what you're saying is that people can't grow their families here. And that's not. That's not all the growth. I get that Right, but 50% of the growth is natural growth. So where are our children and our grandchildren going to live? How are we going to keep the community vibrant. If you don't manage growth, growth will manage you. And you don't manage growth by stopping it and you don't manage growth by letting it go wild right.
Speaker 1:I don't argue. I'm not going to argue with the point that if you don't manage growth, growth will manage you and we've seen that happen. Right, I think the fields and little valleys is my obvious go-to answer to that. Because that, causing the traffic and all the stuff, because the original proposals out there in those areas were not to have it just a sea of homes, it was to have commercial mixed into it, and the city and the city councils, you know, for various reasons, but mainly opposition by the residents, you know, kept that from happening and saying, okay, r110 is what you get, and so that's caused a significant amount of issues all over, you know, with traffic right, whether it's River Road or the Green Springs exit, which is a disaster, by the way, and I'm going to admit that. But my thought, I couldn't help but think it Kempsey Gardner has projected that the retiree community is going to continue to grow as a percentage of the county over the next 20 or 30 years, over the next 20 or 30 years.
Speaker 1:So the pressure for growth would be we need to grow in a way that we can have families here, because if not, then the retirees are gonna be all that's left, which is a economic cost to everybody. Right, because every house is a cost to the municipalities and a cost to the community. And they're not as much economic drivers because they're mostly on fixed incomes. Right, they're not contributing to that local economy, which makes it fragile. Right, and we saw that in 08 is a big portion of why we tipped the way we did in comparison to the rest of the country in different ways is because we had a huge retirement community and not a very diverse economic ability. So I get that point. But going back to why Zone 6? So why specifically Zone 6? The value of the property, from what I understand, is significantly valuable because of the landscapes and the ability to sell. What that property would ultimately be is significantly more valuable than almost any of the other land. Is that right?
Speaker 2:Yeah, For a portion of it. Yes, so let's talk about this. So you hit the nail on the head that growth has to move more towards family type growth. Right, most everything zoned and everything now is skewing towards retirees or other things, and we can change some of that and move some of that, but in order to get housing costs, we're going to shift to affordable housing just because I think we need to. Okay, so, in order to get the cost of housing down, it's not land. Land is not the significant problem with affordable housing. That's funny because that's the developers say that it's the cost, not land. Land is not the significant problem with affordable housing.
Speaker 1:That's funny because that's. The developers say that it's the cost of land.
Speaker 2:Yeah, it's not the cost of land, that's not the raw cost of land. So if you were to take a typical home, the cost of the raw land right is 8 to 10% of the price of a home Right Right. So it's not going to move the needle enough. Where the problem is is infrastructure, yeah, the development costs.
Speaker 1:Yeah.
Speaker 2:It's not margin that the developer's getting and it's not the regulation of the city. Right, I'm going to play advocate here. You know that's what you hear. Well, if you just give us the land, well, that's not going to do it either. The infrastructure so 10% of the cost of a home at most is the raw land. But if you look at the cost of a lot that's developed, it's a third or 50% right.
Speaker 2:Yeah, I think it's a third. Yeah, that's infrastructure. So infrastructure is the big nut you have to crack. If you can lower the cost of infrastructure, then everyone else can play right the landowner can play enough, the developer can play enough, cities and others can play enough If we can lower the cost of infrastructure and when you, when you talk about infrastructure, are you talking about sewer lines, water lines, power lines? Roadways right.
Speaker 1:Limited to that, I guess. I mean because there's some tertiary or like ancillary infrastructure like schools and fire and police and things like that, but for the most part it's just the raw materials and the raw cost of development from below ground to the pad Right.
Speaker 2:Okay.
Speaker 3:So how do you lower the costs?
Speaker 2:Well, that's interesting. So let's look at the land. So we look at that and say, okay, how can we move the needle with affordable housing, right? So here's the big pieces we have that make sense. They're in the path of development. And Warner Valley is really not in the path of development honestly not at all, not at all. Right, it's a ways out, but it's something that moves the needle. It's 3000 acres. Uh, we have Lavergan, so that has a couple hundred acres of that's ours. Uh, the infrastructure costs for that because of water mostly storage and other water is other water is $14 million. So it's significant.
Speaker 1:So that's going to drive the cost.
Speaker 2:The 40 acres in Ivins has a significant cost for access and grading right. It's probably $5 million. Warner Valley is probably an $80 million nut to crack for infrastructure to make it work. Tonaquent is a few million dollars, especially if you go to that lower area that comes right off Navajo. That whole thing is surrounded. It's next to the water treatment plant, the sewer treatment plant.
Speaker 1:It has all the water power lines that go over.
Speaker 2:If I look at that from a strictly methodical development perspective then I say where can I get somewhere with the lowest cost development of infrastructure? It's that lower part of Zone 6. Not the stuff up on the hill right up by Mose Valley, but the stuff down below the Zen Wall, that's right off Navajo where the most tortoises are. That is now probably the cheapest play for infrastructure in the county, right where Bearclaw Poppy is. Yep To move the needle. So looking at that from just a cold, hard reality, right, that's not a political play, that's that's reality.
Speaker 1:Well and that that that's that would be right in alignment. Going back to, in the path of development, the Eastern corridor, the projected road that would go from Ivins down basically to Sun River is essentially where that road plan would go, is it would go right by the land. So, you'd have additional roadways down in the future UDOT plans for that would run right down as well, but you wouldn't need that in order to develop that Right as well. So, but you wouldn't need that in order to develop that Right.
Speaker 2:So, you know, without getting into affordable housing, we have some time we can do that. But that is the genesis of Zone 6. So we laid the map out and said, okay, where can we move the needle? And we took the map, everything off the map. We just went, okay, where can we go? And we're like, well, geez, this makes the most sense, interesting, uh from a infrastructure perspective.
Speaker 3:that kind of goes back to my my question earlier on on political plays not specific to zone six. But it's not a political play, it's just reality, it's just reality, you know.
Speaker 2:And the problem is we live in a world where realities are used and bent for political purposes, so we'll let people use that as they will, but this is the reality.
Speaker 1:So maybe help me understand that Zone 6 area, though, isn't a part of the affordable housing RFP that was issued, it is it is. Okay, because on the site it only features. Oh, it does say toniquent block, yeah, yeah it does now.
Speaker 2:Now we say future optional right option parcel because, again, we will fulfill our obligation if the other side fulfills theirs.
Speaker 3:Yeah right, it's as simple as that or or in other words, if the Northern Corridor gets done, we don't need to worry about any development in Zone 6.
Speaker 2:Right, it's part of that. Now, conserve Southwest Utah wants to say, well, you could pull it out at any time. They're separate.
Speaker 1:They claim that it's separate and they claim that you could pull that at any time. Right, but that's dependent on just the federal government, right?
Speaker 2:That's the depending factor on it right, it's because the beneficiaries need to get some value out of that land. Right, and that land, if the federal government was to come, but right now, if you know people say, well, let's purchase it. Well, what's the opportunity cost for us now? Right, the opportunity cost now has gone way up because now we know it can be used. So you know, that's and that's the the thing with our mandate. Our mandate drives and builds communities. Yeah, and that's a double-edged sword for some people.
Speaker 3:Yeah, so we need to get Celeste to send this episode to Trump's people. Get things rocking.
Speaker 1:I mean he already approved. He approved the corridor and then immediately the Biden administration came in and stopped. That Is that the way I understood it.
Speaker 2:Well, yeah, more or less. I mean, they didn't agree, they got sued that the biological opinion was not correct, that it was more damaging to take the 300 acres out than put the 3,000 acres in.
Speaker 3:That's essentially what they're saying. They're putting a lot of effort into these turtles, man. I'm not saying they're not important because they are.
Speaker 1:I'm fine with, it's a tortoise.
Speaker 3:Yeah, the other.
Speaker 2:they're a tortoise. I was corrected.
Speaker 1:Yes, and I need to, I feel an obligation going back to you know, it's a tortoise.
Speaker 2:And look and I'm very To the layperson it's a turtle. I'm very upfront with this. Our mandate and conservation and other missions are not mutually exclusive. They can all happen Great point. And we showed that it could happen. And what happened is that it got undone by people who had an emotional reaction to it. Right, but we showed that they're not mutually exclusive. We can do conservation and do infrastructure. We can build and save land. You can do it Right Now. It may not be the way everybody likes, but you can be done. We can build and save land. You can do it right now. It may not be the way everybody likes.
Speaker 2:But you can be done, and I think we've shown that across the state. It can be done, and that's you know. Again, I just want to reiterate we follow our obligations. So anybody says, well, you could pull it out anyway, well, you're right, but we follow our obligations.
Speaker 1:Yeah.
Speaker 2:As long as the other side follows theirs Interesting, so we'll, we'll do that. So yeah, that's, that's the play, because the development cost is lower for that tonic area than these other affordable housing.
Speaker 1:And it's going back to the governor's mission of because the the I think this goes back to before we even started the podcast. I was thinking in my head I'm like, if because, because I heard from developers it's the cost of land, I was like, well, who has the land? Well, sitla has the land, so why wouldn SITLA has the land? So why wouldn't SITLA, in looking at their beneficiaries, saying, by developing these areas and setting aside affordable housing for schools and institutions that they're serving to benefit those, whether it's educators or whether it's, you know, being a school in itself? There was, I thought there was value in in saying we're going to set some aside this land, not for short-term rentals, which has been a huge financial driver for for sitla um, but this is a long-term play where it might not necessarily like pencil out as to saying this much.
Speaker 1:these dollars are being generated, but there's a second, third order consequence of holding this land aside for these beneficiaries. I felt like that was a smart move, and this is the first time that SITLA has ever used affordable housing as part of their development. Is that right?
Speaker 2:Well, no, we have affordable housing. We have examples we can point you to in Kanab, we're working on something in Coral Canyon. I mean, yeah, we do it where it can make sense. But what needs to happen with affordable housing and this is the problem is you get everybody in a room that talks about affordable housing and everything becomes a you problem and nothing is an us problem. Right, like if you gave the land, if you gave up impact fees, if you cut your margins, right, we would solve the problem. So you know what? Not one of those by themselves is a silver bullet, but a portion of all of them is Right, and so that's what we're seeking to do is we're seeking to come and say, look, the infrastructure is really the limiting factor, and if we can figure that out, so we put this out. And what we're done with the RFP is we basically said, look, we're going to throw this out. The government needs to play in some way state, local, county, whatever, whatever they can do, developers, you need to play and we need to play. We understand that. So let's take kind of Warner Valley as an example. All right, huge infrastructure nut to crack, right? That would be spread across the cost of every lot. If you can lower that, that helps. So what we'll do is we'll go and say, okay, here's a piece of property. I want everybody to put their money where their mouth is. I want everybody to talk about us instead of you. So here's this piece of property. These are the limiting factors to the piece of property.
Speaker 2:So, phase one we're going to go and say, okay, state, do you have any incentives for this, whether that be low cost loans, whether that be an infrastructure bank, whatever that may be, in order to get affordable housing right. And when we're talking affordable housing here, we're talking detached single family for own homes, right. So not apartments and townhomes. Those all fit into the equation, but that's really where we're lacking, right. So we want to look for that.
Speaker 2:So throw all those tools on the table, right? So how can we do that to help lower the cost of infrastructure or any other costs there? Now phase two comes along and developers, now here are all the tools, take these tools and come back and tell us what can you do with those tools. How can you cut margin? How can you cut costs through prefabrication or whatever it is that you're doing to produce a house of a certain size and type. And then, if you do that, I can go back to my beneficiaries and I can say look a portion, because little Warner Valley is not going to just be a sea of affordable housing.
Speaker 1:Right and I got it on the map here too, guys, just exactly where Warner Valley is and the amount of space and where it relates to Sand Hollow and SR7.
Speaker 2:Right, so it's not going to 3,000 acres. You're going to have 3,000 acres of affordable housing, right? That would be irresponsible. We want a vibrant community built around it, but it doesn't have to be highly amenitized, it doesn't have to be desert color right, it doesn't have to be salinity.
Speaker 2:It doesn't have to be highly amenitized, it just has to be a nice community with lots of different price points and we'll have larger lots and other things out there. But we want at least a third of that property 30% to a third of it to be affordable right. Single family detached homes, no-transcript perspective. I can totally make that work with my mandate.
Speaker 1:Well, so the challenge I have with the affordable housing is and Mayor Hart's brought this up so many times and I think this is one of the key valid points that it's it's only affordable on the first run. Right is and and I think the goal the goal the governor said is is under 400 000 and I think sitla is basically adopted as you know a single detached family home right under under 400 000 is what they're seeking out of out of these projects.
Speaker 1:but it but it's only affordable on the first sale because as soon as once the new owner decides to resell it, it goes back into the market value of the house and it's not going to stay low, it's going to jump up. So is that being taken into account or?
Speaker 2:Yeah, we're trying to take that into account. That's tricky because you have to limit who can buy it. They have to own it. So you don't want it to turn into an investment farm right where people come in and say, oh low-cost housing, I'm going to just buy it and then rent it.
Speaker 1:So are any of these houses going to have basic deed restrictions on some of those things?
Speaker 2:or they should.
Speaker 1:Okay, I mean that would be the point, and that's is that a determination that you guys could make, or is that only a determination that a municipality? Who makes that determination?
Speaker 2:Both. Probably the municipality would make that determination because someone has to enforce it, right, right, our agency is not set up for enforceability. Right, municipalities are whether they want to do that, or it goes to like a Utah housing corporation, right finger, and say, well, if you just did this, everything would be affordable. Yeah, that is definitely not the case. That is not the case, and so what we're trying to do is throw something out and say, okay, everyone, throw your cards on the table, let's figure this out right, let's get a real world scenario where we figure this out and then, if we can figure it out, it could be duplicated in other parts of the state.
Speaker 2:You can go up to the Wasatch Front. You know we don't have a lot of land on the Wasatch Front, but on the west side Kennecott and the LDS Church have a ton of properties on the west side. If they could figure out this model, then maybe they could do that too on the Wasatch Front. Right, okay, here are the weak points. This is why it doesn't pencil, but to just say, well, it's just the land, right, because I've heard lots of things that are floating around the spreadsheets Well, 25% of the cost of the home is the land. No, it's not. It's not the land, that's the developed cost of the land Right, not the raw land, not the raw land.
Speaker 2:It's not that there's not some play there that the landowner maybe can be involved in, but that's not the panacea. That's not going to solve the problem.
Speaker 1:Yeah, there's not enough in the margin area of it, just the land itself isn't enough to get it down. Everybody does have to take a haircut, yeah, everybody does. And so, yeah, figuring out it's a tough puzzle. I think you know what I've settled on with the affordable housing is that it's a moving target. It's it's going to take, uh, fill lots, zoning and and and regulations, city regulations and zoning, it's got to be taken into an account and I think those, all those pieces have to come together. And you know at what point do we say the county's full right, it goes back to water. So was I was interested in going back to to the water and how SITLA factors into Washington County and water is. Is there any any collaboration on? Because because Warner Valley, the, the Warner Valley reservoir, is slated to go in there, um, you know, probably 10, 15 years, I think, is what the kind of projected timeline is for that it's supposed to be bigger than Sand Hollow and the amount of water that it holds significantly bigger.
Speaker 1:So is SITLA involved in any of those types of projects and development with the Water Conservancy District?
Speaker 2:Yeah, matter of fact, a large portion of the Warner Valley Reservoir is on trust lands that we've already sold to the.
Speaker 2:Conservancy District Got it and we regularly communicate with Zach at the Conservancy District and we regularly communicate with Zach at the Conservancy District. But water is an important thing. So let's take like Desert Color as an example. So, as we got Milepost 2 ready, right, and that was when the airport came and the Southern Parkway was built, and then we were dealing, working with the city of St George and UDOT and collaborating to do that. But when we did that project, we are pretty water wise with the way we do our development, so we actually piped reuse water all the way to that project. So it had wet reuse water from the beginning. It's one of the most water wise communities in the state.
Speaker 2:Now we did the same thing in Siena Hills and Coral Canyon, but there's not wet reuse water there yet, right, the system just isn't built, but it's piped and it's ready to do that and we have CCNRs and other things in place for low flow water and for water wise landscaping, and so we've kind of been on the forefront of trying to do that because we understand it's a scarce resource and that's. You know, we have to work with the Conservancy District. It's kind of odd. This is a state or a county in the state you don't have to bring your own water for development, unlike the other 28 that we operate in. But I think we're getting there and I think this is unpopular to say. But we need to look more like Las Vegas from a conservation perspective, right, and the more we look like Las Vegas or Tucson, I think we've got the water to do what we need to do here.
Speaker 1:Yeah.
Speaker 2:But that's going to take some mind shift and some paradigm shift, yeah.
Speaker 1:It's a touch and go thing because, depending on the season, because we only take in the water that lands in our area, right, the the, the only water that we have is what falls in our boundaries and that's that's. Unlike a lot of other areas, most other areas that are getting water from other adjoining counties, but we're on an Island in the middle of the desert, in the most arid part of the entire country, and so, uh, yeah, looking like Vegas is probably a a way we we may maybe not frame that I was, I was thinking about desert color I was thinking about desert color because I was at the very first meeting, like right after they had, uh, finalized the, the RFP with a blue diamond capital and collide companies and and the marketing that went out with these big old lagoons, right, Is it?
Speaker 1:the water-wise nature of the development to the marketing that they put out to the community did not match.
Speaker 2:They did not match and I remember they didn't do a good job of telling that story.
Speaker 1:The very first time. I think this was like 2016, maybe, and I was sitting in this meeting and the entire meeting was around. Okay, how are we water-wise? Why is the water that's there on the property? Cause there's a lot of water that's there. It's non-potable water and you know comparing it to golf courses and how you know it's. It's less water usage, blah, blah, blah. But it was very interesting to me is the marketing and the branding. Is is a key piece to to telling the story. Yeah, but it's complicated. It's a complex story. It is complex.
Speaker 1:I appreciate you coming on, man. We're just cresting over an hour, almost an hour and a half, so I want to wrap it up here. There's a lot more I want to talk about, as far as you know, what the future projects and what SITLA does as a whole, but I think we did a good job of kind of giving your guys' perspective on it and it really kind of rounds out all the big, big factors and parties, um, opinions and what the perspectives are. So I I really appreciate you coming in and taking time. You bet Anytime Happy to come back anytime. Thanks, man. Well, we hope you enjoyed this episode, guys. We'll see you out there. Thanks for listening in. If you enjoyed this episode, please like and subscribe. Make sure you're following us on all the social media websites.
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