Park City poised to take step toward selling bonds for Treasure deal
January 15, 2019
Park City leaders on Tuesday are expected to take a procedural step as they prepare to finalize the $64 million acquisition of Treasure in a conservation agreement, one of the first moves regarding what will be the most expensive of City Hall's open space deals since voters in November authorized most of the funding.
The Park City Council is expected to approve a document known as an authorizing resolution. The resolution starts the sales process of the $48 million worth of City Hall bonds designed to fund the acquisition and provide up to $3 million for an unrelated open space deal in Thaynes Canyon known as Snow Ranch Pasture. It also sets a ceiling of 6 percent on the interest rate and outlines a maximum of 16 years for the repayment.
A City Hall report drafted in anticipation of the Tuesday meeting indicated staffers expect the actual interest rate on the bonds will be between 3 percent and 3.4 percent, while the repayment is expected to cover 15 years rather than the 16 years outlined in the resolution.
Officials anticipate the bonds will be sold on the open market on Feb. 20 or a day close to that date. The closing on the sale of the bonds is expected on March 6 or shortly afterward. The dates would keep City Hall along a timeline for a closing on the acquisition of Treasure on April 1, at the latest.
Voters in November overwhelmingly approved the $48 million ballot measure, ending a long-running dispute about a highly controversial development proposal on the Treasure land. The land is located on a hillside overlooking Old Town along the route of the Town Lift.
There are development rights dating to the 1980s attached to the hillside, and the Treasure partnership — consisting of the Sweeney family and a firm called Park City II, LLC — spent years in discussions about a project. City Hall and the partnership eventually negotiated the $64 million agreement that was put to voters.
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The meeting on Tuesday is anticipated to be one of the first substantive City Hall discussions about the Treasure deal since Election Day. There will likely be other meetings about the acquisition later in the winter and in the early spring as the planned April 1 closing date nears.
Of the $64 million total for Treasure, $45 million is expected to be funded through the ballot measure. Leaders have crafted a plan for the remaining $19 million that relies primarily on funds raised through bonds that will be repaid via sales taxes. Other funding mechanisms include an estimated $1 million bond premium, a $700,000 City Hall budget surplus in the 2018 fiscal year and the $1 million sale of property at Quinn's Junction to the Park City Fire District.
City Hall in the step that is expected on Tuesday also is poised to address the land in Thaynes Canyon. The municipal government has pledged up to $3 million toward a Utah Open Lands effort to set aside Snow Ranch Pasture from development through a tool known as a conservation easement. Under such an easement the landowner — two branches of the Armstrong family — retains ownership but agrees to extinguish the development rights. The easement is pegged at $6 million.
The municipal government would not issue the $3 million in bonds authorized in the ballot measure for Snow Ranch Pasture until Utah Open Lands raises the other $3 million share of the overall cost. City Hall has 10 years to issue the bonds. They can only be used toward Treasure or Snow Ranch Pasture.
Utah Open Lands has a deadline of March 31 for the fundraising efforts. The organization negotiated the March 31 deadline with the two branches of the Armstrong family after it was unable to raise the funds by the original date of Dec. 15.