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The deal is almost sealed.
The Draper City Council has agreed to buy the undeveloped portions of the SunCrest development from Zions Bank for $5.6 million. The potential purchase comes after the would-be buyer of the development, Arizona-based MCO, backed out of the deal in June, mainly due to conflicts with the city over open space and public access to trailheads.
The city's plan calls for buying 2,200 acres next to the 1,800 acres of open space the city already owns but hasn't developed, including part of Corner Canyon. While the city said it intends to preserve open space in the area, it added it may partner with developers to sell off portions of land for development.
Purchase of the land would create a one-of-a-kind 4,000-acre open-space property along the Wasatch Front, which is "unprecedented," according to the city. The master plan for the area would include an expansion of city parks and trails and the already created plan for Corner Canyon Regional Park.
The plan took many SunCrest residents by surprise, including several who attended a town hall meeting in the city this week looking for answers on how serious the city is about its open space plan.
"Their plan is to do this, but they aren't guaranteeing anything," said Draper resident Scott Steadman. "There is a big, giant question mark, of, 'Are you really going to do this?' "
City Councilman Jeff Stenquist and acting City Manager David Dobbins were on hand to field questions from SunCrest residents at the Thursday meeting.
Stenquist said the meeting was held after the city realized there were still a lot of questions from residents about what the $5.6 million purchase would mean for them now that open space was planned instead of the original master plan that called for 3,000 additional homes.
The city will soon be in charge of the master plan, if the deal goes through.
Draper plans to pay for the $2,500 per acre property by refinancing two of its existing bonds one from 2002 for construction on city hall, and a 2004 bond for Bangerter Parkway at a lower interest rate, and by issuing a new bond. Although the city will pay for most of the purchase with savings from the loans, Stenquist said that won't cover all of the cost and the city will have to still bond to pay for some of it.
Previously, R&B developers backed out of the SunCrest purchase after Draper City said it didn't want private gated developments. Zions Bank sued Draper City for $25 million alleging it was leading the developer into bankruptcy. A settlement was reached and Draper agreed to maintain roads and address water supply issues.
Then Arizona developer MCO Inc. tried to buy the property, pitching an open space plan that didn't fit what the city wanted. MCO decided to back out as well.
Most recently, Zions Bank came back to Draper and offered the city to buy the whole property.
Stenquist said after the meeting that the purchase is basically an extension of the Corner Canyon Regional Park project and if residents liked that, they will really love its future plans.
"We never in our wildest dreams thought we would be buying the entire development," Stenquist said.
He added that the purchase price Zions Bank approached them with was right and the city figured since residents liked the trails at Corner Canyon, they would also be supportive of the city buying more land.
Despite the optimism from some city officials, some residents are wary of the idea.
"Their vision is going to be our vision," said SunCrest resident Robyn Folger, of the city owning the property. "They are not being specific and that leads to distrust, I think."
While the contract states the city must close on the deal no later than Nov. 5, the city plans to forgo the due diligence period ending on Oct. 31 and buy the 2,200-acre property in two weeks.