I live in Prospector and will live with whatever Park City builds at Bonanza Park. I support affordable housing, childcare, public space, art, local businesses and safer transportation. I do not support using those worthy goals to excuse a transaction badly out of proportion to its public benefit. This is not simply affordable housing. It is 106 apartments, 88 deed restricted, plus 32,581 square feet of commercial space, childcare, public art, green space and underground parking. The city also describes seven buildings, 280 spaces, nearly 2 acres of gathering space, and transportation improvements. Affordable housing is being asked to justify the entire development. On March 19, the Park City Council approved a second amended negotiating agreement with Brinshore. City records describe an anticipated contribution up to $40 million and an intended $1 annual ground lease for 60 to 99 years. The agreement shares certain outside development costs up to $1 million. These are not final transaction documents. But these are the city’s negotiating numbers, and they demand scrutiny. Park City paid $19.5 million for the land in 2017. I have not found a current independent appraisal. For illustration, I use $40 million, assuming the property roughly doubled over nine years. That is an estimate, not an appraisal. The answer is not to pretend the land has no cost. The city must publish an independent appraisal and market ground lease valuation before committing it for generations. A $1 annual lease is not free because Park City keeps the deed. It transfers the economic use of the land. The city cannot sell it free of the lease, lease it at market rent, build something else, or respond freely to future needs. Over 99 years, the stated rent totals $99. Park City retains legal title while surrendering nearly all current rental value and practical control. Assume land worth $40 million commands ground rent starting at 5 percent, or $2 million. Let rent grow 2 percent and discount payments at 7 percent. The rental stream is worth about $39.65 million today. If land value also grows 2 percent, it reaches $284.1 million in year 99. Yet the right to recover it then is worth only about $350,000 today at a 7 percent discount rate. The land is not worth $350,000. The point is that control returned nearly a century later restores almost none of today’s surrendered value. Then comes a possible city contribution up to $40 million. I cannot confirm final terms because they are unpublished. Calling it a loan proves nothing. Value depends on whether repayment is probable, timely, secured and enforceable. If $40 million returned in one payment 40 years from now, it would be worth only about $5.68 million today at 5 percent. Repayment behind senior debt, expenses, reserves, investors and developer fees could be worth less. Headline exposure therefore approaches $80 million: assumed $40 million land value, plus possible $40 million city contribution. It is not apartment construction cost or confirmed project cost. It is public value potentially placed into the deal. Divided by 88 restricted apartments, that is about $909,091 each. This is not a claim that each apartment costs that amount to build. It shows how large the public commitment is relative to the stated housing benefit. The city also approved $7.2 million in 2024 for power line undergrounding required for redevelopment. Now examine the Area Median Income schedule because this is where the financing strategy shows itself. The current packet assigns 14 restricted apartments at 40 percent AMI, 21 at 50, 30 at 60, 14 at 70, and nine at 80. The calculation is straightforward: 14 times 40, plus 21 times 50, plus 30 times 60, plus 14 times 70, plus 9 times 80, divided by 88. The result is 58.07 percent. The Internal Revenue Service’s average income test permits designated limits from 20 percent through 80 percent, but requires their average to be no more than 60 percent. This mix lands only 1.93 percentage points below that ceiling. Passing that test does not guarantee the financing, but failing it prevents the owner from claiming the credit. I cannot confirm that tax credit eligibility was the only reason for these exact counts. In my judgment, however, this schedule is financially engineered to satisfy the tax credit formula and help make the financing close. That is not the same as designing housing around Park City’s need. The city’s 2025 housing plan says AMI is skewed upward by wealthy residents and reflects people who can afford to live here, not the people who work here. It says affordable rentals should target 100 percent of local workforce wages or less, which it places just below 60 percent AMI. Yet 23 of the 88 restricted apartments, or 26.1 percent, are set at 70 or 80 percent AMI, above that stated rental target. Only 65 are at or below 60 percent, and only 14 are at 40 percent. The same city plan says Park City needs 1,190 additional affordable units by 2032. Eighty-eight restricted apartments address only 7.4 percent of that gap. The 65 apartments at or below 60 percent address only 5.5 percent. A weighted average helps the financing test by letting lower AMI apartments offset higher AMI apartments. It does not prove that the project is meeting the greatest local need. This is a financing package wearing the language of a housing solution. The tax credits also require plain English. Investors provide real private equity in return for federal credits, related tax benefits, and an ownership interest. The Government Accountability Office describes this investor structure, and the IRS explains that the credit is generally claimed over 10 years. This is not charity or free money. The city should disclose the tax credit equity, price paid for each dollar of credit, ownership percentages, guarantees, reserves, cash distributions, refinancing rights, and investor exit terms. Then there are developer fees. I cannot find a disclosed total developer fee for the current 106-apartment plan nor a breakdown of what is paid during construction, what is deferred, whether any interest applies, what affiliate fees are charged, or where those claims sit in the payment waterfall. I therefore cannot confirm the current fee. That is the problem. A deferred fee is not a waived fee. It is compensation that may be paid later from project cash flow under the final agreements. Before Park City commits land or cash, every dollar of developer and affiliate compensation, its timing, conditions and repayment priority must be public. Private compensation may be legitimate. Keeping it hidden behind an affordable housing label is not. The danger is that the affordable housing label allows public subsidy to leak into unrestricted apartments, commercial space, parking and amenities without a transparent allocation. If commercial income goes to the ownership partnership, the commercial component should carry a fair share of land, infrastructure, financing and operating costs. If public space justifies public money, access and maintenance obligations must survive refinancing, ownership changes, and financial distress. Promises made during approval mean little unless they are recorded, enforceable and backed by remedies. Costs can rise through soil conditions, underground parking, labor, interest rates, design changes and delays. Restricted rents may not keep pace with insurance, utilities, repairs and reserves. Once financing closes, Park City may face pressure to contribute more rather than strand its earlier investment. The city needs a hard contribution ceiling, completion guarantees, overrun responsibility, strong default rights, realistic reserves, and protection against future rescue demands. Before this advances, Park City should publish the appraisal, ground lease valuation, complete budget, sources and uses, proposed lease and loan documents, ownership chart, distribution waterfall, developer and affiliate compensation, investor exit terms, and unit affordability schedule. It should allocate public support among every use and compare this plan with a housing focused alternative, a smaller project, and a market sale or lease funding housing elsewhere. The City Council must decide whether the financial transaction is worthy of the public assets being committed. The Planning Commission must judge height, mass, traffic, parking, design and neighborhood compatibility on their merits. Affordable housing should not become a blanket excuse for financial opacity or development exceptions. I call this a bad deal. Based on the information now available, Park City is being asked to place extraordinary public value into a complex development for 88 restricted apartments while essential questions about repayment, private compensation, cost allocation, and enforcement remain unanswered. The burden is not on residents to prove the deal fails. The burden is on its sponsors to prove that it works. Until that proof is public, the City Council should reject the present structure. Park City can support affordable housing without giving away the economic use of irreplaceable land for nearly a century and placing up to $40 million more at risk. Saying no to this version is not opposition to housing. It is the minimum standard of responsible stewardship. Timothy Noonan Prospector The post Good cause, bad deal: 5-acre numbers don’t add up appeared first on Park Record. ...read more read less