FLAGSTAFF, Ariz. -- Just before tourists reach the entrance to the Grand Canyon's South Rim, they see Tusayan, a tiny town with a scattering of modest hotels, restaurants and gift shops that could be getting a lot bigger.
High-end boutiques, five-star hotels, a dude ranch, hundreds of new homes, a spa resort, an American Indian cultural center and a high-density shopping area just off the highway are all part of a plan by an Italian development group to transform the town of 550.
Tusayan Mayor Greg Bryan sums up the Town Council's upcoming decision on whether to annex land and rezone property for development in one word: Huge.
"This is going to impact and set the character of Tusayan for years to come," he says.
Local control of development wasn't possible until last year when residents voted to incorporate, making Tusayan one of Arizona's smallest towns. Typically, a town must have 1,500 residents to do so.
But Tusayan residents successfully lobbied the state Legislature to approve a law that gives communities of at least 500 people that are within 10 miles of a national park or monument the chance to incorporate.
Everyone seems to agree that more housing is needed for what largely is a transient population. Aside from fewer than 10 private parcels, the companies that run the hotels and feed the tourists own the homes in the town, making Tusayan a company town that's landlocked by the Kaibab National Forest and Grand Canyon National Park.
But the residents have long been divided on the extent of development in the town seven miles from the Grand Canyon's park gates, and this time is no different.
Stilo Development Group USA, which owns almost 75 percent of private property in the region, tried to build an outlet mall near the canyon in the early 1990s but it was rejected by landowners. Not long after, the group began floating Canyon Forest Village, a development that eventually was scaled down to 900 hotel rooms, 2,375 housing units and 240,000 square feet of commercial space. The federal government approved land swaps, and county supervisors signed off on zoning requests.
But the project that the Stilo Group invested $25 million into before it could be built was overturned by county voters in a 2000 referendum after a contentious campaign. That led the group to push for incorporation to put future decisions on development in the hands of people who lived in Tusayan.
Under the current plan, between 800 and 1,700 housing units and more than 3 million square feet of commercial space would be built on three properties -- the kind of growth that critics contend is unbridled.
The Town Council is set to vote on it Wednesday as part of an agreement with Stilo to consider the annexation and rezoning concurrently. One council member, John Rudder, has recused himself because he runs the campground off the highway that is partly owned by the developers who plans to turn it into a mixed-use area with shops, restaurants, parking structures and office buildings.
The town's Planning and Zoning commission, which is identical to the Town Council, already has recommended approval with some changes that were in response to community's concerns about height restrictions of buildings, length of stay at hotels and entertainment attractions.
"I would say that's pretty much a done deal," said Coconino County Supervisor Carl Taylor, whose district includes Tusayan.
Like Taylor, some of Tusayan's residents and the town's neighbors say the plan lacks specific details and would dramatically alter the character of the town and mar the natural beauty leading up to the Grand Canyon.
The local school district within the national park has room for only 30 more students before it outgrows its buildings and would lose funding equal to a third of its budget if the high school population reaches 101 students. Nearby cities such as Williams, Valle and Flagstaff fear Tusayan will steal hotel customers and tax revenues. The Grand Canyon officials say an increase in visitation to Tusayan would mean more visitors to the park, which would overwhelm resources. About 4.5 million people visit the canyon each year, most of whom travel through Tusayan.
Grand Canyon Superintendent Dave Uberuaga has asked the town to hold off on a decision until the developers can better state the impacts. "My concern is unconstrained development and focus on economics and profit versus what's a balanced visitor experience that could compliment Grand Canyon," he said.
Water is the overarching worry.
Nothing in the developer's plan outlines how water would be delivered without ensuring nearby water sources aren't compromised. Andy Jacobs, a spokesman for the Stilo Group, said developers would rely on past water studies to determine availability and prefer not to drill wells. They expect to start the process to get state approval to construct a water system in the coming weeks, he said.
Taylor said he voted against the Canyon Forest Village development while he was on the county's planning and zoning commission because of what he viewed as an inadequate water plan. At the time, the developers said they would bring water by rail and pipeline from the Colorado River to the South Rim, protecting the groundwater supplies, and Jacobs said that's still an option.
"If I were on the (Tusyan) Town Council, I would probably say: 'What's the new plan?"' Taylor said.
Bryan isn't concerned. He said the Stilo Group asked for the rezoning upfront to avoid a repeat of Canyon Forest Village when it conducted water, cultural and other studies without a guarantee of accessing the land. An agreement between the town and the developers sets timelines for building infrastructure and other things that would first lead to financial and other penalties then the loss of the right to develop the land if not met.
The town would get 40 acres of land in the deal for housing. Conservative estimates put the population growth at 2,500 after full build-out, but some speculate it could be as high as 8,000. The developments aren't expected to materialize for three to five years -- the same time frame that the Arizona Department of Transportation has to build a second terminal at the local airport that would boost the passenger capacity from 315,000 a year to 1 million.
Clarinda Vail, whose family settled in the area decades ago and owns property and hotels, said the town should be considering other alternatives for much-needed housing. "That's just completely backward to me," she said "That is their side of thinking, but you really have to be caring about the impacts of things before you pass them, not after."