A round of applause erupted at Moab City Council’s decision on Tuesday to purchase property for an affordable housing development on Walnut Lane.
Moab City Attorney Chris McAnany said the City of Moab moved surprisingly fast to acquire the property.
A private seller listed the property for sale at $1,999,000 million in July. With the city council’s unanimous 5-0 vote on Oct. 4, it will move forward to purchase the property for $1,815,000 with a closing date on Nov. 1.
Currently, 40-60 people reside in 37 trailer homes on the property; the city said it has not asked those residents to move. Reconstruction of the property will take place in phases, and the city will hire a third-party property management company to oversee the “day-to-day” operations.
The city’s purchasing power allows it to redevelop the land into a housing development with an estimated 80 new permanent residential apartments, with the smallest of the units tentatively planned to measure 250-300 square feet.
Moab City Mayor Emily Niehaus said qualified low-income residents who live in the new apartments will have opportunities to receive housing vouchers to pay a portion of their rent.
Moab City Council member Kalen Jones said he was glad to see the city purchase the property, ensuring that the people who already live there won’t be displaced by the property’s sale. It will maintain an affordable level of rental prices in the area. Other city officials reiterated the importance of preserving the area’s affordability for the existing residents.
The purchase and accompanying affordable housing plan is a first for the City of Moab.
“It is our first step into the housing world,” said Lisa Church, City of Moab communications manager. “Once this one is up and running — it’s going to be a couple of years before the project itself comes to fruition — our hope is to continue to do other projects like this.”
The city requested a new survey and an appraisal of the property before committing to the purchase, and also asked for an environmental assessment.
The 2.95-acre property was listed for sale in July with the address of 193 W. Walnut Lane, but no existing building can be located on the street with that exact address. The residents living in the trailer homes on the property use the addresses of 250 and 280 Walnut Lane.
Tracy Dutson, Moab City’s senior projects manager, speculated that the discrepancy in the addresses could be from changes in the land use of the property over the years and records that weren’t updated to reflect the changes.
Dutson said “everything seems to be in order” now with the results of the new survey.
Niehaus said the new appraisal of the property shows that the assessed value of the property at $1.8 million aligns closely with the nearly $2 million the seller listed the property for.
The purchase is being financed by Zions Bank as a 20-year lease-purchase agreement for $1,815,000, said Alex Buxton, Zions Bank Public Finance vice president.
“It’s a lease-purchase agreement, so it’s not considered a bond,” Buxton told council. “The next phase, assuming that you get to that point, that’s where a municipal bond would be issued. The city would have to decide what type of revenue bond they want to issue for that. I think, preliminarily, we had talked about doing a sales-tax revenue-bond of some sort where you would secure the bond with sales tax revenues.”
Niehaus asked Buxton, “Just to be super clear, it would take 80 units for us to be able to be ‘in the black,’ meaning we will receive enough in rent to be able to cover the debt of building the units and the land, is that correct?”
Moab City Manager David Everitt said, “But that also presumes a $500,000 cash outlay by the city, so I wouldn’t say that it’s in the black, per se … but with grants, and a loan, then the 80 units is what’s needed.”
Following discussions at the city council meeting, council moved unanimously to approve of the purchase.
Niehaus said, “Oh my goodness, I’m so excited.”
“I just got the chill bumps,” Everitt said.
The city said it will continue to develop its plans for the property.
Dutson said the largest of the units would be two-bedroom apartments of 640 square feet, equivalent to the size of the trailer homes that currently exist on the property.
“[The units are] affordable to build, but again, we are in the planning stage of site-plan, unit mix and design,” Dutson said.
City paves way for 80 affordable units
“It is our first step into the housing world.”