Public Private Partnerships in Counties

Public Private Partnerships in Counties


Hello everybody, welcome to this
week’s episode of the county seat. I’m
your host Chad Booth. Today County Seat is on
location at the very top of the beautiful Powder
Mountain resort in Weber County. Now this
is a resort that spans Weber County and
partly into Cache County. The landscape here seems
fairly pristine as far as ski resorts
go, but the landscape is about to change.
How will it change and how the change is
facilitated is the topic of our show today. As a
matter of fact a new partnership for Weber
County. This is a new thing for them but it’s been
tried before. A new public, private partnership
to facilitate development. We’re going to
analyze that mechanism, how it works and what
the county commissioners see as the benefit
from taking on this kind of an obligation.
We’ll start with a story on the public private
partnership with Terry Wood. TERRY WOOD: Typically when we hear about a
real estate development project, there is
this negative image of homes stuffed as
tightly as there is space to fit them. However, this
particular story isn’t about that scenario. GREG MAURO Chairman Powder
Mountain In a nutshell the project is
about, building an epi-center of innovation here in
the Wasatch Mountains for a community of
innovators, non- profit leaders, entrepreneurs,
scientists. The summit community has been
built over the last 6 years and the idea was
really to give them a home base that could then be
opened up for the broader Utah and country and
world to experience. TERRY WOOD: While the Summit Mountain
Holding Group is a story all on their own. The
focus here is on the public/private partnership that
Weber County and Summit entered into; that
will create the catalyst to bring a grand vision
to fruition. TERRY WOOD (CONT.): A public private partnership is
a relationship between the government and a
private entity or a private organization. In
this case WEBER County agreed a little over a
year ago to enter into this idea of a public
private partnership with the development here at
powder mountain, currently owned by
summit mountain holding group. In its
simplest form the partnership is really
two-fold from a financial perspective. DOUGLAS LARSEN EXECUTIVE
DIRECTOR ECONOMIC DEVELOPMENT WEBER
COUNTY One. The county facilitated
backstopping a bond arrangement or a bond
structure in order that the developer could build
out a new major road for the project as well as
water and sewer infrastructure. The second
component of our public private partnership with
summit mountain holding group is
through the creation of what’s called a community
development and that’s an opportunity that will
allow the project to benefit from an increase in
the new property tax revenues that are generated
from the development. TERRY WOOD: So why would a county government
get involved in a project like this
in the first place? DOUGLAS LARSEN EXECUTIVE
DIRECTOR ECONOMIC DEVELOPMENT WEBER
COUNTY In terms of the county being a
catalyst or helping to facilitate the
development here at powder mountain, , powder
mountain is the largest ski resort in the entire
country. Certainly the real-estate up here and the
resort up here have been subject to other
development opportunities. Developers have
come in with different plans and visions, the
thing that separates summit, their
development vision. Is their approach to the community
and the environment at the top of the
mountain. GREG MAURO Chairman Powder
Mountain First off for this resort
specifically, it’s nearly 10, 000 acres so we are really
trying to concentrate all the development within a 40
acre area and even within that, really within
a 16 acre area. So we are really trying to leave a
lot of broad open space so for example if you
looked over here, you would see these huge
meadows. It allows for great hiking, cycling
Nordic, the prior developers were looking at a
traditional Park City style development that
would put a huge amount of multi-family housing
everywhere and then interconnect the home sites
with 18-hole golf courses. We’re not going to
do the golf meadows. We think there is a
kind of national TERRY WOOD: a small footprint, there are
also a number of Economic Development
opportunities. DOUGLAS LARSEN EXECUTIVE
DIRECTOR ECONOMIC DEVELOPMENT WEBER
COUNTY will create with their unique
redevelopment plans, for Powder Mountain is
what we refer to as second order or bi-product
value. You think about the people that the summit
development people are bringing into the
area for their weekend events, they are
corporate leaders, entrepreneurs, investors,
thought leaders from around the globe and they are
delivering those people right to our front door.
In order for us to get access to people like that
and bring them to our community it’s pretty
challenging and with the summit development and the
summit culture, they are bringing them
here to us and that’s a great benefit for us. TERRY WOOD: The proverbial win-win at 9,000
feet. For the county seat, I’m Terry Wood. Thanks Terry, right now we have
an understanding of what this
project is about and you kind of get a flavor of
public private partnerships. When we come back
we will talk with the Weber County
commissioners and we will find out the decision
making process and what they see in the future of
this kind of an agreement. We’ll be back with
The County Seat right after this commercial
break. Welcome back to The County Seat
we are, today having our discussion on
top of beautiful Powder Mountain Resort.
Beautiful clear skies for 360 it’s a fine day up here.
Joining us for our conversation on public private
partnerships are the commissioners of Weber
County. Shall we Commissioner Matthew Bell,
Commissioner Keri Gibson, Commissioner Jan
Zognaster, welcome all to the show. How did this
project get take place? Anyone of you.
There’s a long Powder Mountain and a few years
ago the developers approached Weber
County with a new idea. One that was quite
different from the ones of the past. One that was
very intriguing to us in Weber County and this is a
result of now more than a year of hard work
and discussion among our county agencies that
brought this you have done or are either
going to do. It started really around bond
issues, is that correct? It did, we were
approached to see if we would use our rating in order
for the investors to get a good break as
they went out. That’s where it started. By the
way congratulations to you on the
renewal of your Triple A bond rating. I know
that’s quite an accomplishment. It says a lot
for the financial management in our county. So it
started with a you’re just guaranteeing this
bond or basically the loan is that correct?
Correct, a lot of the mechanics where we got to this
point happened before I came into office. I’ve
been in office for about a year. When I got here
the previous commissioners had got a lot of
the framework together for this project to get
it moving forward. So as we started
talking to the developer. They needed to do
some road, water-tank and sewer. We help
give them the vehicle that can help them to do
this project to bring those things so they can
have those, so they could continue the building
project here. Now basically they’re paying for
the infrastructure but will become
the county’s completion. Is that my
understanding? So you kind of acquire county owned
infrastructure but somebody else is paying for it
even though you’ve loaned them the money to
get there. Exactly, we will have that
responsibility for that road. So, the roads that they’re
building and the sewer line and the water line
meet all of our specifications. We are involved
with making sure it’s all the specifications
they meet and it then it will become our project
when it’s complete. Which, by the way, is
common practice among development that
a county or city will require infrastructure
to be put in at the expense of the developer.
That’s then deeded to the county to be
maintained as county infrastructure. That’s
good for our audience to know this because
until I was involved with The County Seat I
definitely didn’t understand that. This is
different than your traditional bonds because it’s
an assessment bond and that’s something that
needs to be brought up. Well, explain that
to me Jan. An assessment bond is one where the
owners of the property are the ones paying
back the bond. It’s not the county paying it
back. It’s not the taxpayers paying it back. It’s
those living in the assessment area. The assessment
area at Powder Mountain is a small area
of the total acreage of Powder Mountain that
has been defined and mapped out and that
is part of the agreement on the assessment
bond. The bond is issued and paid back by those
that have the ownership. Now as you go forward
there’s going to be a community
development area and there is going to be some tax
infrastructure that is going to assist and getting
some of the stuff done. Can you explain to me how
that is moving forward or fits in? That is in
process right now. It’s being negotiated and
discussed. We have time we could go into more
detail on that. We’ll pick that right up after we come
back after the break on The County Seat. We’re
talking about the public private partnerships
and the plans for Powder Mountain going from a
seasonal ski facility to a year-round resort
community. We’ll be back to the county seat in
just a minute. Welcome back to The County Seat
we are discussing a public private
partnership between Weber County and I guess some of
the other taxing entities and a private
developer of Powder Mountain Resort. Jan, we
left at the end of the last segment talking
about a new concept, a new structure called
a CDA that actually involve all the taxing
entities in helping move this project along. How
does that briefly work? Each on the taxing
entities would enter into an agreement if they chose
to, where a portion of their increased tax
dollars, not existing, but any new tax
dollars would go to the infrastructure and the build
out to encourage this project to move
forward more quickly and in a better way. The
percentage would decrease on a time table.
Then the taxing entities would have all the
benefit eventually. After a period of time,
depending how the contract is entered into, yes
it would end at some time it’s not ongoing
forever. It does have an end. That’s an important part
to consider. It’s not saying, “Okay, give us
a portion of your tax dollars.” It’s basically a
portion of your tax dollars we’re generating with
the added value. Yes. I think the key word there
being use is incentivize as the commissioner
used it. What we’re wanting to do is invest in
a particular area in a way that will allow us to
grow and give incentive for all of the
entities that are involved. When you talk about a public
private partnership it’s not just Weber
County and the developer. There are several
partners involved. The water and sewer district,
the school district of Weber County. We’re hoping to
take a minimal investment and turn that
into something that makes sense to
our taxpayers. Really kind of a unique tool
that economic development throughout the state
are starting to use frequently that helps us
to build on that incentive that’s offered. For
instance, for usif you look at the 1100 acres in
this development, right now that’s generating
roughly 12,000 dollars in property tax if you
look at all the different taxing entities. We
think that by the end of this CDA we can turn that
into 12 Million dollars of taxing revenue. It’s
a good deal for our taxpayers if we look at what
we have now and what we can develop over a
period of time by entering into a period of
time by entering into this partnership with the
developer. Let’s talk about some of the other
benefits. Obviously people look at the
county and say, “All they want is tax base.”
What does it bring to the communities? This
particular project? One of the things that it brings
to the valley here is pretty much Ogden Valley
is a winter activity/resort area and this
would bring it more into a year round and help some
of the small businesses that are in the
valley and just really strengthen the economy. Do many
of them struggle in the summer time?
They do, depending on where they’re
located and what type of business. Of course, you
have those that come up and use the reservoir
but it’s really not a year-round benefit. That kind
of leads to an summer activities and they get
the people up here that want to bike and hike
and be part of this out here. They are trying
to get that bridge together so it’s not so divided
between summer and winter activities that we
have up here. Commissioner Bell talked about
some of the things that it adds to the
community. I would just say, this community has
always been concerned about the environment.
Any development that was to happen
here was to be well thought out, well
planned, well- reasoned and taken into account
impacts to the local area and environment. This
development has been very well thought out.
This particular development has been much more
fondly received than other options we
have had in the past. Some of the residents have
been very concerned about the mentality of
other developers that have come into
town. They seem to be much more receptive
to this group. Why do you think that is? First
of all they seem to be interested in the flavor
of the community and in maintaining that.
Secondly, it hasn’t been the traditional cover the
mountainside approach that you would see from
the traditional developer. They have
been very interested in making sure that
this is something that makes sense for this
community. They have tailored their needs and their
expectations to this community in specific. I
think it’s been a real benefit. I think the other
thing they’ve done is they’ve come into our
community. There’s quite a few members of this
group that have been living in our community for
a few years. They’ve got involved in our
community. More than just this project up here
they’ve got involved with other
relationships with other organizations in our community.
I think they’ve been part of that. This is a
different kind of development they’re doing. As
commissioner Gibson said this is not going to
be one where they’re building these big ol’
25 thousand square foot houses. This is a
development that is built to fit in and be part
of the landscape up here. As they’ve fought this out
and as they’ve moved forward they’ve taken a
lot of the citizens that live up here
they’ve talked to them, got feedback from them, what
they like what they dislike. I think that’s
helped move them through this process. What would
be safe to say proceed forward? Because
typically the thing that people say is, “Government
shouldn’t be getting involved in the private
sector and competing with it.” Obviously
there’s an incentive. What would have
happened if you wouldn’t have got involved. I’m
not sure what would have happened to be
honest. But I see government’s role as to
situations like this, obviously not to compete with
the private sector, more importantly to put
in place the right type of infrastructure
that allows private investment to thrive in a
particular area. I think that’s really what we’re looking
at here. I mean we have to compete for good
economic development there’s no question
about that. Generally that means providing
infrastructure. This is a tool that’s been used
over the last several years that has become a
good tool. I think is becoming more prevalent
throughout the country. I think this is a
good opportunity for us. Excellent, well we’ll
take a break here. We’ll continue our conversation.
We’ll look at some of the things that critics
have said about it and give the commissioners a
chance to address those when we come back here on
the County Seat. We’ll be right back after
this commercial break. Welcome back to The County Seat
our topic today has been public private
partnership, we’re at Powder Mountain Resort
which is now owned by the Summit Mountain
Holding Group and they are actively involved
in the community. They’ve actually
moved their headquarters to the community so
they’re not like an outside investor. Kind
of like a local project. There has been
criticism. I think in our conversation before the show
started you said, Jan, that not everybody is on
board with this. Obviously there’ve been
criticisms that say the county’s just giving money to
rich people. How would you address that? This is
something that we have had a good number of the
people in the Valley embrace. They have, I
think, encouraged it. They’ve given us
their support but there are those who are
standing back, watching, waiting to see. This
is new to Weber County. This is different. This
is a very, very large project. We just happened
to have at this time the right people at the
right time. With what we feel is a very
responsible development that we feel by helping on the
government side that we could encourage this
investment and increase the return on
investment. Obviously that’s a long-term goal. It’s
favorable to the community and the residents that
live in it not just the tax base. I want to go
back and address this because there are some
people who are very concerned that the county
is gambling with county money and this bond issue
is a guarantor. There have been a
number of safeguards that have been put in
place to make sure it’s not a gamble. If it is
a gamble it’s a very well calculated gamble. Some of
those include that we have adequate security
to back up those bonds. Making sure the
developer has a reserve fund in place so we
could operate during a period when we may have
to foreclose on those bonds. We are
confident, having the type of scrutiny that we have
had in this area over the last year or so that we
have protected the interest of the taxpayers.
Then, you have to look at it from an investment
point of view, because again, the whole point
of a public private partnership is the idea
that we might be able to increase the investment
for the taxpayers and increase their
value at the end of the day. We go back to the point
where we can turn a 12 thousand dollar
property tax revenue into a 12 million dollar annual
property tax revenue. Yeah, there’s times
when we have to facilitate the process so the
tax payer can have that return on investment.
That’s our goal in this process and has been all
the way through. One last question on this and
then I’ll lay off on the criticism part. You
basically have a reserve fund that would basically pay
the bond payments for two and a half
years but sometimes in a standard
foreclosure they can stretch out to five years.
Doesn’t that leave you with a two and a half year
closure? That’s another safeguard that we put in
place where we require that that was
immediate. The minute that we decide that it’s
not working (the bond cannot be paid) we
have the ability to go in and start that foreclosure
process. You’re into the process now. In
summation let’s go over the highlights. Would you
take the same steps again? No regrets on this?
I’ve been in it from the beginning. I definitely
would. We would be as thorough in our
investigation as to is this a good project, will it
really turn out to be what we think it will be? I
would do it again. I don’t know we will ever have an
opportunity like this in our lifetime. This
is a huge project. Yes, I would do it again. I
would do it with the same thoroughness that we’ve
done it with this time. Basically I’m hearing that
this commission might consider another project
like this in the future. Do you see it as the
“wave” of the future? I don’t know about the
“wave” but we only have a few tools to help us
with the economic development that we
need. This is one of them. It’s been
successful to this point and I can’t see why we wouldn’t
try it again. Commissioner Bell any last
thoughts? It’s been a great project. It’s been
interesting. People have worked very, very hard for this
and we look forward to a lot success up
here. Commissioners, I thank you for
joining us on The County Seat. I thank you for
inviting us into your living rooms and
participating with us. I would like to remind you that
you can make comments on the show on our
facebook page, “like” us there and give us your
thoughts on it. You can also watch this again
and tell your friends about it on our website ‘thecountyseat.tv’. Remember,
local government is where your life
happens. You need to be involved, tell your
friends to watch this program and we’ll see you
next week on

Leave a Reply

Your email address will not be published. Required fields are marked *