Utah state government may become owner of some 200 acres of the best, undeveloped residential land in southern Utah the old St. George airport.
House GOP leaders met privately Thursday to learn about the difficulties that St. George city is having in building a new airport southeast of the downtown area, and how to "sell" the old airport, which now sits on a beautiful mesa right in the middle of St. George, Bloomington and Santa Clara, some of the fastest-growing areas of the state.
The city needs to sell the land under the old airport to raise money to finish buying the land needed for the new airport. City officials will open bids Feb. 4 from private developers on the redevelopment.
"There is a lot of interest (in the old airport site)," said St. George public works director Larry Bulloch. "That is a very important day to us. We now have the Letter of Intent from the FAA for $90 million and this bid is the next most critical issue."
The problem is a question of timing, said House Speaker Greg Curtis, R-Sandy, and House Majority Leader Dave Clark, R-Santa Clara.
"We are talking about keeping viable an airport in one of the most economically growing and vital" areas of the state, said Clark.
Clark, a banker, explains the problem this way: Any developer who bids on the old airport land must take into consideration that he won't get use of that land for four or five years the time it will take to complete the new airport and vacate the old.
St. George and southwestern Utah can't do without an airport so the old airport must be kept running until the new one is finished.
"The conundrum is that we need the money now, but we can't deed the property now," Bulloch said.
Thus, it is unlikely that any private developer can pay the whole appraised value of the old airport's 200 acres $42 million to $46 million.
"He would have to discount the price he paid" because he's tying up capital for such a long time before the land can be subdivided and lots sold -->, Clark said.
That's where the Legislature may come in. The state buying all or part of the old airport is only one suggestion but it is one that makes some good sense for southern Utah, legislators were saying Thursday.
"It would be another option available to us," Bulloch said. "This bid will serve at least one purpose. It will provide solid information about what the land's value is."
Does the Legislature have to act in this general session, which ends March 5?
Probably, said both Curtis and Clark, if only to promise to make payouts to St. George as construction and land purchase funds are needed.
"This is like contracting to build a house," Curtis said. The owner signs a contract with the builder, but not all the money is needed up front there are payments out over time until the house is finished.
It is not anticipated that the state would hold on to the 200 acres over time or try to develop the land itself. And depending on southern Utah housing markets, the state could end up making some money when the old airport land is finally sold.
But the state isn't interested in becoming a land speculator, either.
The federal government has already given around $17 million toward the new airport. And in addressing the Utah House on Thursday, U.S. Rep. Jim Matheson, D-Utah, said a letter of intent has been signed to deliver tens of millions of dollars more as the new construction starts.
The city is permitted and ready to go on building the new airport, although because of escalating land prices around the new airport, the cost has gone up.
Matheson said he has nothing to do with the Legislature providing aid to St. George. "As land prices go up around the new airport, certainly land prices would also go up for the old airport," Matheson said.
But Curtis and Clark say land costs are not the issue timing and cash flow are.The state would be buying over time the old airport and owning one of Utah's most valuable residential sites, said Clark, and at the same time helping build as quickly as possible a new St. George airport that is greatly needed in southern Utah.