SITLA reclaims development
BY SCOTT KERBS
ST. GEORGE - As part of a $3.4 million deal with SunCor Development, Utah's School and Institutional Trust Lands Administration has reclaimed developmental rights for about 2,100-acres of land in Washington County's Coral Canyon community. The proposal was finalized in late May, with SunCor, an Arizona-based company, relinquishing its development rights and selling 172 finished residential lots, in addition to 280 acres of residential land and 185 acres of commercial land, to SITLA.
"We took over the ownership to ensure the continuing quality of the community," said SITLA spokesman Dave Hebertson. After the region's housing market began to spiral downward, SunCor's parent company, an Arizona-based utility business, began seeking buyers for Coral Canyon and four of its other master planned communities, said SITLA Assistant Director Doug Buchi. Michael Gardner, President of SunCor Utah, said the company decided to sell its interest in Coral Canyon and other communities as a result of the declining residential housing market. "They just decided they wanted to concentrate on their commercial holdings in Arizona," he said.
SunCor actively marketed the Coral Canyon project for more than a year, but the company and SITLA were unable to find an acceptable buyer, Buchi said, with many prospective buyers seeking to purchase the property at a low price and flip it for a quick profit. "They did not want to make a long-term commitment," he said. "We thought that we were headed toward a bad marriage." With the threat of bankruptcy looming for SunCor as a result of its depressed real estate holdings, Buchi said SITLA had few options in preserving the community. "We felt an inherent need to protect that asset," he said, as SITLA purchased the remaining land in Coral Canyon and reclaimed the development rights. Buchi said the transaction was completed quickly, terminating an 11-year partnership between SunCor and SITLA.
Although SITLA now controls the property, Gardner said SunCor is maintaining its presence in the community as it completes about 10 additional homes in the area. Gardner said SunCor intends to support its customers in Coral Canyon by continuing to honor warranties on its homes.
More than 1,000 homes have been built in Coral Canyon, but the project is only about 50 percent complete, with about 1,000 more homes planned in the area, Buchi said. To continue the massive project, Buchi said SITLA could enlist local builders in the effort, with plans in place to offer the 172 finished lots to a single company or split the property among several builders. "We're looking for builders that continue the vision that SunCor started," he said.
If SITLA opens the project to local builders, James Sullivan, vice president of S&S homes in St. George, said his company is interested in building homes in the Coral Canyon area. "It would be a good thing to open up to local builders," he said of the possibility. "As long as they are competitive in their lot prices, it would help everybody." Sullivan said Coral Canyon represents a prime location for builders, as they would have the luxury of developing an established community rather than a uninhabited area. "You're always better off to try and build in an area that has an established neighborhood," he said.
With Washington County's real estate market suffering from an excess of inventory, Buchi said he envisions a long-term project expecting decades to pass before the lengthy building process concludes. "Realistically, it is probably a 20-year project," he said.
St. George Spectrum, June 4, 2010