Proposed Major Vacation Destination for SITLA Land Previously Considered for Desert Golf Course in Kanab

Property development has become the trust’s main source of income under the leadership of David Ure, who will retire in March.

(Photo courtesy of Kane County Water Conservation District) Retired Utah Congressman Mike Noel proposes to build a luxury golf course at this site outside of Kanab on land state-owned next to Jackson Flat Reservoir. Instead, the Utah School and Institutional Trust Lands Administration is expected to partner with developers to build a major vacation destination on this land.

A state-owned plot retired Utah lawmaker Mike Noel hoped to carve a luxury golf course in Kanab will instead be transformed into a dense vacation hotspot called Mineral Village as part of a project development lease before the Utah School and Institutional Trust Lands Administration (SITLA) board next week.

The ambitious property development, which beat Noel’s dream of a links-to-destinations-type course, was kept under wraps until this week, when SITLA staff released the agenda for the meeting of the January 20 board meeting.

Construction is expected to take 15 years and the development is expected to generate $15.7 million for the state.

Occupying 101 acres just south of Jackson Flat Reservoir, Mineral Village would include a 128-room hotel, 200 vacation rentals and 137 lots for single-family homes, according to the proposal submitted by West Mountain Development Group, a little-known company registered at a Bountiful address.

A message left at the company’s office on Wednesday was not returned.

Noel had hired renowned golf course architect David McLay Kidd to design the course, which would have been built by the Kane County Water Conservancy District – which Noel has run for decades – and operated in partnership with the county and the city ​​of Kanab. Many Kanab residents opposed the idea due to its heavy reliance on public funds which they felt could be better spent on something other than a golf course that few residents would use.

But in the end, it was SITLA’s strict contract rules, not public opposition, that deflated Noel’s vision to attract spendthrift tourists to the scenic southern Utah town. Under requirements designed specifically to prevent sweetheart deals for politically connected people, SITLA was forced to seek better deals after the Noel Water District submitted a proposal to incorporate SITLA’s plot into the course. 200 acre golf course.

At least two superior proposals – defined as those that bring in the most money for SITLA beneficiaries – have been presented to the trust, while the golf course has not made the initial cut for consideration.

SITLA manages 3.4 million acres scattered throughout the state to support public schools and other public institutions. Under reforms passed in 1994, the agency was so successful in prioritizing revenue generation that it has since invested more than $2 billion in the trust fund.

The Mineral Village project exemplifies SITLA’s pivot to property development under director David Ure, who on Tuesday announced his retirement in March 2022. Under Ure’s 6-year watch as head of the agency, the principal source of its revenue has shifted from oil and gas to real estate development.

Last year, development overtook minerals as SITLA’s #1 revenue stream, $34.5 million vs. $30.5 million, according to its annual report. In 2016, on the other hand, mining generated nearly twice as much revenue as real estate development, at $35.7 million versus $19.7 million.

Even as oil and gas revenues have skyrocketed in recent years, the trust has raised record amounts of cash, surpassing $100 million last year. The lion’s share came from real estate projects, mostly in booming Washington County. Most of these proceeds were deposited into a trust fund, which generates revenue that is distributed to Utah schools on an annual basis.

The beneficiary of the Kane County project would not be the schools, but rather The Miners’ Hospital, a branch of the University of Utah established in 2003 to treat injured workers in Utah mines. The name of the project was chosen to honor this beneficiary.

SITLA is to receive an increasing percentage of gross sales prices for Mineral Village vacation units and homes, according to a staff memo to the SITLA board.

“Minimum selling prices are set to protect guaranteed returns for the trust, where average single-family homes will be at $650,000 per unit and vacation village units will sell for an average price of $550,000,” says the memo. “Revenue to the Trust is expected to be $4 million and $5.1 million, respectively, from these two components of the development lease.”

The hotel would be completed in the seventh year of the project. In return for a 14.6% “membership share”, SITLA would give the developers the 5-acre land on which the hotel would be built.

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