Tooele council questions city water use and sale after Desert Rose mixed-use proposal

Developers proposing the Desert Rose Business Lofts told the Tooele City Council on April 2 that the 5-acre project’s mixed commercial‑and‑residential units would need roughly 7.86 acre‑feet of water, and asked the city to allow use or sale of municipal water rights to support the development.

The proposal, presented by Amy Johnson of Y Street Capital, would create 43 mixed‑use units where owners could operate small businesses on a ground floor with living space above. Johnson said the development team compiled water‑use data from comparable projects and concluded the site would require about 7.86 acre‑feet of water for the full project. “Total needed for this development…we would need 7.86 acre feet to provide this many opportunities for commercial spaces,” Johnson said.

The request matters because Tooele City staff and several council members said the city’s existing water allocation standard is higher than the developers’ calculation and that selling or reallocating city water rights for residential uses could create long‑term supply and policy problems.

Johnson told the council the figures came from metered use at comparable mixed‑use projects in Bluffdale and Brigham City and from interviews with developers; she said Oakwood Homes — a potential partner on the project — has seen strong demand for the mixed‑use units. “If we have to go and find our private water rights, it’ll probably kill this development, and we can’t provide these units,” Johnson said, explaining why the developer preferred municipal water access for the project.

Tooele City staff and council members pressed the developers on where they derived their numbers and how the city should treat the units for water accounting and taxation. Paul (city staff) said the city’s current standard for a single‑family equivalent is 0.25 acre‑feet per interior use and that under that standard the 43 units would total about 10.75 acre‑feet (plus exterior landscaping needs). “The question that we were looking at at the city is, is there increased water demand because of any of the commercial uses? And the answer is no. Our city standard today for any type of single‑family residential development is 0.25 acre foot per interior use,” Paul said.

Council members voiced two recurring objections: first, whether the units would actually generate higher or lower water demand than a conventional residential development; and second, whether allowing the city to sell or allocate water rights for uses that include residences would open a precedent the city could not sustain. One council member said, if the city begins to treat these units as residential for water allocation, “we have to be able to build wells before we get all these requests,” adding that selling municipal water for residential purposes could invite many similar requests from other developers.

Councilmember Roger (who spoke during the discussion) asked about deed restrictions and other legal tools to bind a property to commercial use, and developers responded that other cities had debated deed restrictions but often declined them because of property‑rights and tax considerations. “What the other cities have talked about…2 main arguments came across…property rights,” Johnson said, describing why some municipalities did not require permanent deed restrictions.

No formal action was taken during the work session. Council members and staff directed continued study: staff said they would review the developers’ water modeling alongside city standards and options for separating commercial and residential water accounting. Developers indicated they would keep working with planning staff and the planning commission while the water issue is resolved.

The discussion combined technical water‑use comparisons (Brigham City’s ordinance calculation versus Bluffdale metered data) with policy questions about municipal water policy and enforceability of land‑use restrictions. Several council members said they support the mixed‑use concept in principle but remain reluctant to change city water policy without a mechanism that prevents broad residential allocations from municipal supplies.

The council did not vote on the Desert Rose proposal at the work session; the item remains with planning staff and the planning commission pending further water‑use analysis and policy guidance.