KAYSVILLE — Terra Basin, a company managed by longtime developer and Layton lawmaker Stuart Adams, has agreed to a $5.3 million intent-of-purchase contract with Kaysville city for more than 15 acres of undeveloped land on Flint Street that the city has owned since 2006.
And how the windfall will be spent by the city has raised the concerns of one community activist.
Terra Basin will be looking for public input on the future development, offering a period of due diligence through Aug. 15, Adams told the Standard-Examiner.
“We are trying to find something that fits into the neighborhood,” he said of the land on the northwest corner of Flint Street and 2nd North.
Terra Basin, a Utah limited liability company, agreed to the contract with the city on Jan. 15.
“Terra Basin is an LLC formed by the Adams Company to do this project,” Kaysville City Manager John Thacker said of the company, headquartered in Kaysville.
The Adams Company has been working in Kaysville for many years, he said.
Community activist and Kaysville resident Margaret Brough said a portion of the land sale should be used to reduce the city’s power rates, which were just increased.
“We had an increase of 10 percent in our electric rates last (October),” Brough said in an email to the Standard-Examiner.
The rate increase, approved by the council Oct. 16, was done to accrue reserves for the city’s power fund, which is used to operate the city-owned power plant.
The reserves had been drawn down as a result of power rates not keeping pace with the cost of service, according to city meeting minutes.
Brough said the proceeds from the sale could replenish that reserve, taking ratepayers off the hook.
City Finance Director Dean Storey, in response to a GRAMA request filed by Brough, said the $5,319,138.72 purchase price for the land will be returned to the city’s electric fund, where the property was once held as an asset.
But city officials have stopped short of making a commitment to Brough that power rates will be reduced.
“I think it is reasonable to expect the city to reconsider a rate reduction when the property (sale) closes and funds,” said Kaysville Mayor Steve Hiatt.
But any talk of a power rate reduction before the property is closed on would be premature, he said.
“At this point, I do my best to be optimistic about any transaction in this economy,” Hiatt said.
The city has agreed to a settlement date of Aug. 30 with Terra Basin, with the buyer having up to a 90-day extension beyond that date on request, Hiatt said.
The purchase contract on the table will allow the city to recoup its investment, including interest it has put into the property, Hiatt said. The city’s being able to collect on investment dollars is “a big benefit” to the agreement.
The land being sold is in a light industrial zone.
“Residential would not be allowed in the light industrial zone,” Hiatt said. “The intent there would be to seem to pursue a business use.”
But regardless of what is developed, Hiatt said, he is pleased that Adams, who has close ties to the community, is involved in the project.
“This agreement makes the city 100 percent whole on all costs that have been incurred through principal and interest payments from the power fund,” Kaysville City Councilman Jared Taylor said in an earlier council meeting.
The city’s purchase of the land using power funds was a decision made by a previous council when economic times were more favorable, Hiatt said. As part of those negotiations in 2006, the city also acquired three residential lots adjacent to the Flint property.
Since those land purchases, Hiatt said, the city has not used the power fund to buy property.
Standard-Examiner correspondent April Hale contributed to this article.