Town councilors are attempting to leverage a public alley currently eyed by a hotel and residential developer for more affordable housing.
Brad Wagstaff, of Midway, Utah, wants to scoop up a 10,000-square-foot alley that connects Mercill Avenue to Perry Street, bisecting a full block at the north end of town that’s already 95% his.
Building in that alley, Wagstaff told councilors, instead of building around it, would lead to his ideal design of 120 hotel rooms and 51 market-rate residential condos that would replace what is now a relatively low-density mix of a former gas station, bus parking, offices and residences spread across the 12 town lots.
Councilors, though, weren’t convinced the developer’s dreams were the best they could do.
In the last decade, councilors have given up ownership of three public alleys, all for hotels: The Cloudveil, Hotel Jackson and the Rustic Inn. Those alleys, a staff report said, were “short, dead-end” and did not connect to other properties, while the alley desired by Mogul Capital would be the first “entire” alley given up for hotel development “in recent memory.”
“This is the beginning of a negotiation,” Vice Mayor Arne Jorgensen said, “and I would hate to give up this public property this early in the game.”
Councilors told Wagstaff they’d be open to giving up the 20-foot-wide alley if his company could provide more money or deed restrictions, and only after they saw a land appraisal.
Since 2016, Wagstaff’s company Mogul Capital, a Marriott and Hilton franchisee, has scooped up almost all of the block bordered by North Cache Street, Mercill Avenue, North Glenwood Street and Perry Street.
Mogul Hospitality Partners — Wagstaff’s Wyoming LLC — also owns the Pony Express, the former Motel 6 that’s now rebranded as SouthTown, and 2.08 acres just east of the middle school that’s planned for a new 195-unit apartment complex called “The Loop.” That amounts to about 761 beds the company plans to bring to market in Jackson.
After Wagstaff asked councilors for feedback on his alley ask, conversation quickly turned to plans for The Loop.
“It’s impossible to look at one of these projects without looking at the other,” Councilor Jim Rooks said. “They are directly related with regards to the requirement for deed-restricted housing.”
Of The Loop’s nearly 200 units, about 45% or 89 units are proposed to be deed-restricted — 88 of those would be “workforce,” and one would be income-capped “affordable.”
Town planner Tyler Valentine said the deed restrictions are “exactly” what Wagstaff is supposed to be providing based on the town’s mitigation rates. The 195-unit project could be deed-restricted further as other Mogul Capital development occurs, he said.
Wagstaff said Monday that he’s planning on “roughly 3x” the town’s requirement to offset market residential with deed-restricted housing for the North Cache condos. He’s previously said The Loop would be 80% deed-restricted.
Councilors lauded that mitigation effort Monday, in addition to the developer’s cleaning up a toxic benzene plume under North Cache and Perry Street from a previous gas station. Jorgensen said he’s used Wagstaff’s projects as an example of a developer that’s developing housing before a core project. But, Jorgensen said, he’s still looking for more.
The other councilors said they likewise agreed with town staff’s assessment that there was “insufficient apparent public benefit” to giving up the alley without more help for affordable housing.
“I don’t want to vacate the alley unless we get more than what we’re getting,” Councilor Jessica Sell Chambers said. “And I don’t know how that’s possible. But that’s my feedback.”
Wagstaff told councilors that he is open to exchanging affordable deed restrictions to acquire the alley that bisects his project site, but that number wasn’t discussed.
Other alternatives town staff raised are direct payment or covering maintenance costs if the alley is purchased but not developed.
“We don’t have a real estate transfer tax. Can we figure out a voluntary real estate transfer tax that can be built into the deed?” Councilor Jonathan Schechter asked. “Can we figure out some sort of voluntary lodging tax?”
In every market where Wagstaff has hotels, he said, he pays millions every year in transient occupancy tax — or TOT — paid on lodging.
Every market besides Jackson, that is.
“Jackson, quite frankly, the fact that it doesn’t have a significant TOT,” Wagstaff said, “and I’m talking a TOT that’s 12 to 14%, is a significant error.”
Chambers replied that leveraging a higher tax would be up to the state.
With the amount of tourism that comes to Jackson, Wagstaff told councilors that he “can’t believe you’re operating as a town,” and his company has had conversations with the town about lobbying state lawmakers for higher taxes.
“We’re very special,” Schechter replied.
With Mayor Hailey Moron Levinson absent, councilors voted unanimously to direct staff to order an appraisal of the alley before taking next steps.