This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Hildale • On July 14, 2014, the City Council here decided to sell some land.
It passed a resolution approving the sale of six parcels within a city-owned industrial park. The rate was cheap: 26.4 cents per square foot.
That was only for the land. The city didn't charge anything for the buildings or improvements sitting on the dirt.
Hildale sold the six parcels for a total of $125,570. Washington County did not assess the parcels in 2014 because they were municipal property, but in 2015, the county assessed the parcels — including the improvements — at a total worth of $1.26 million.
The buyer was Reliance Electric and a related company called Paramount Management Group. The companies and Hildale are operated by members of the polygamous Fundamentalist Church of Jesus Christ of Latter-Day Saints.
Over the last 2 1/2 years, Hildale has been selling its industrial park property to businesses operated by FLDS members. There is no indication the public had an opportunity to bid on the parcels, and there has been little public disclosure about the terms of the sales.
Hildale residents who regularly attend City Council meetings only learned of some of the sale prices when The Salt Lake Tribune showed them documents it obtained through a public records request.
The sales came as the U.S. Department of Justice was suing Hildale and adjacent Colorado City, Ariz., for favoring members of the FLDS. A Phoenix jury in March found the towns guilty of discriminating in the way they provide housing, services and policing. A hearing held last week dealt with the issue of whether a judge should appoint a monitor over the town, disband the towns' joint police force and order other changes in the towns. A ruling is expected in 2017.
Much of the property has been sold to businesses that have been fined for or accused by the federal government of labor violations, according to county and Hildale records. The U.S. Department of Labor in 2015 fined Reliance Electric $376,300 for using child workers on construction sites.
One of the registered agents for Reliance and Paramount is Nephi Allred. He is among the 11 FLDS members charged in federal court with two counts of conspiracy in what prosecutors describe as a scheme to defraud the food stamp program. The defendants have pleaded not guilty.
When a reporter called the published phone number for Paramount Management Group on Wednesday, a receptionist answered the phone by saying, "Phaze Concrete." A man later came on the line to say no one at that number knows anything about Paramount.
Phaze Concrete has been sued by the U.S. Department of Labor over allegations of child and unpaid labor. According to a court filing Wednesday, the lawsuit has been settled, but the deal still needs an approval by a federal judge in Salt Lake City.
No one from the businesses that bought property from the city returned messages seeking comment.
Parcels have been sold for less than what independent appraisers have said similar land is worth.
For example, in 2015, the real estate appraisal and consulting firm Morley & McConkie, L.C., appraised a commercial nursery sitting on 2.89 acres in the city owned industrial park though the lot was owned by the United Effort Plan — a private land trust the state of Utah seized in 2005. That appraisal placed the value of the land at $43,000, or about 34.15 cents per square foot.
There are records of only one industrial parcel being sold near that price. In 2015, Hildale sold a lot to a manufacturer called Wood World LLC for 35.15 cents per square foot.
Blake Hamilton, a lawyer representing Hildale, on Friday said that all the land has been sold for what the county assessor says it is worth. That may be less than what appraisers say the value is, Hamilton acknowledged, but the City Council didn't want to pay for an appraisal nor did it want the businesses to have to pay for one.
"The whole point of the industrial lots was to spur economic development," Hamilton said.
Moving sale
Vincen Barlow is a former Hildale city manager and former FLDS member. Last year, he became a witness for the Justice Department in its lawsuit against Hildale and Colorado City.
Barlow said the industrial park, which spans the east and west sides of State Road 59, was created in the 1970s as a place for businesses to start. Businesses paid minimal fees — Barlow recalls it was $100 a month when he was city manager — to lease lots. The city was to spend that money on infrastructure improvements within the industrial park. Businesses had to spend their own money to construct buildings or make other improvements.
The sales can be traced to the FLDS' conflict with the United Effort, Barlow said. FLDS members have resisted paying $100-a-month fees to occupy United Effort property while Hildale fought a United Effort subdivision plan all the way to the Utah Supreme Court. The town lost in June 2014, and the United Effort was able to subdivide parcels to sell.
In early 2014, leaders within the FLDS and the town became concerned that the United Effort would evict businesses who didn't pay the fees, Barlow said.
"The ultimate goal was to secure some land," Barlow said in an interview Wednesday. "The church was losing its assets and properties. There would be a place the church could move its businesses to."
In the spring of 2014, Barlow said he returned from testifying in a legal proceeding in Phoenix to attend a Hildale City Council meeting. He discovered the council was prepared to sell a lot in the industrial park to Reliance.
"The decision was made before the City Council meeting even started," Barlow said.
Barlow said that first sale to Reliance was a "test case." Hildale leaders watched to see if anyone tried to stop the sale.
There were a couple of questions and complaints from residents, but no legal action, Barlow said. So the City Council continued with the sales.
Barlow said Hildale, out of fairness, wanted to sell the lots to the people who built on them. That hasn't always been possible. Some companies have gone out of business or changed ownership.
In the case of Wood World, a review of business records show a previous cabinet maker with a different management team occupied that lot as recently as 2009.
Hamilton acknowledged some of the lots have not been sold to the occupants who built there, but he said the new businesses often took over leases and bought other assets from the original company.
"Company B has obviously made an investment in what they bought from company A," Hamilton said.
There is no record of Hildale ever advertising the lots for sale. Hildale has published City Council resolutions approving the sales in legal notices in the St. George newspaper The Spectrum.
Hildale provided The Tribune six examples of the published resolutions. They list the buyer and the price per square foot, but only two of the resolutions listed the total price.
Hamilton said he offered legal advice on how to comply with the statute and that Hildale has complied. He did not know why some sale prices were not announced in council meetings.
The city has never discussed how the sales might benefit the church or FLDS members, Hamilton said.
"That doesn't enter the equations with respect to the cities," Hamilton said, referring to both Hildale and Colorado City.
The Hildale City Council is "always really tight-lipped on the details," said Jared Nicol, a Hildale resident who frequently attends the council meetings. "About the only thing you get is what lot it is and who's buying it."
Nicol, who works in the mortgage industry, has been tracking the sales, but had not been able to obtain the purchase prices.
Hildale provided The Tribune with documentation of nine parcels that have been sold. But Hildale attorney Blake Hamilton, who also has represented Reliance and Phaze, said in an accompanying letter that those are the only parcels in which sales have been completed.
Nicol said there are perhaps 11 more parcels that have been approved for sale by the City Council, but those sales apparently are not final.
In some City Council meetings, Nicol said, Hildale Mayor Philip Barlow has acknowledged that not all the lots are being sold to businesses that have resided and built there.
"And the mayor just says, 'Well, they're all the same people anyway, so what does it matter?' " Nicol said.
During some council meetings, Nicol has asked that sale resolutions be tabled until the city can follow its own procedures. The City Council has ignored all his requests, Nicol said.
Twitter: @natecarlisle