Developer walks from half-built resort community in S. Utah’s red rock country; state takes it

Utah takes over abandoned planned community

SALT LAKE CITY — The state agency that oversees trust lands is taking over a half-built resort community near fast-growing St. George after the developer ran into trouble because of the declining real estate market.

Utah’s School and Institutional Trust Lands Administration is taking back finished lots, infrastructure, office buildings and other lands from SunCor Development Co. of Tempe, Ariz.

The agency paid $3.4 million to buy out its one-time partner, marking the first time it took over a housing development, said Kevin Carter, director of the trust-lands administration. SunCor couldn’t find another buyer offering acceptable terms.

“It looked like there was a chance they might be headed toward bankruptcy, and we thought that was a bad result,” Carter said Tuesday. “We’ll hold onto it. We think it’s a great investment. The property is poised to increase in value when the market turns around. We think we will make a significant profit.”

SunCor is a subsidiary of Phoenix-based Pinnacle West Capital Corp., the holding company for the electric utility Arizona Public Service Co. It also has dumped other housing projects near Prescott, Ariz., Santa Fe, N.M., and Boise, Idaho.

In Utah, about half of 2,000 planned homes had been built at Coral Canyon off Interstate 15 in Washington County. The development features a golf course that was sold to another buyer, along with a clubhouse, pools and a trail system. Carter said it’s one of the region’s better planned communities.

The trust-lands administration has the wherewithal to sit on the 2,600-acre property for years, waiting for the market to come back. It stepped in to defeat “the vultures and hedge funds that were circling to do quick flips,” said Doug Buchi, Carter’s development director.

SunCor “was absolutely an outstanding partner and had executed the plan as well as anybody could have expected,” he said. “We didn’t want to see all of their hard work compromised.”

Buchi added, “They ran into a brick wall here three years ago when the real estate market took a tumble.”

SunCor’s project manager, Mike Gardner, said in a statement that the company was “blessed” by an opportunity to develop a quality community and had a “terrific” partner in the trust-lands administration.

“We are pleased that they intend to carry on our vision and legacy for the community,” he said. Other SunCor executives had no immediate comment.