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Payson council extends ground-lease option for Danco’s affordable-housing proposal after contentious debate, 4–3
Summary
The Payson Common Council voted 4–3 on Feb. 11 to extend a ground-lease option with Danco Communities so the developer can pursue Low-Income Housing Tax Credit funding. The extension is nonbinding, but council members and residents pressed staff for more details on lease terms, infrastructure responsibility and long-term encumbrance.
The Payson Common Council on Feb. 11 approved an amendment extending a ground-lease option with Danco Communities through June 30 to allow the developer to pursue Low-Income Housing Tax Credit funding, carrying the motion 4–3.
Council members and residents spent more than an hour questioning missing details in the option agreement: which party would build or pay for street and utility extensions, how the lease payment will be set, and whether a potential 99‑year lease would unreasonably encumber town land. Mayor (S2) and staff repeatedly emphasized the extension is contingent on receiving tax credits and that a final ground lease — including rent, inflation adjustments and other terms — would require future council approval.
Julie Leonard (staff) introduced the item as an amendment to an existing option that would give Danco more time to complete its April 1 LIHTC application. Jaden Johnson, Danco’s on‑line presenter, described a roughly 3‑acre portion of the larger Malibu parcel and said the proposal is for a family-oriented, 66‑unit project with a community building, playground, dog park and about 137 parking spaces. “It’s around 3 acres of the overall site,” Johnson said, explaining a boundary survey reduced earlier 3–5 acre estimates.
Residents urged caution. “I would hope that perhaps you either… put this on hold for a couple of weeks or, actually just drop it and see what else is in the pipeline,” said Darlene Yauker Delage (S16), who described negative online reviews about the developer’s property management and maintenance. Burke Myers (S19) urged rejection of any agreement that would yield excessive long-term restrictions, calling a 99‑year lease a loss of local control and future flexibility.
Supporters of moving forward said the extension is nonbinding and is needed so Danco can remain competitive for tax credits; if a lease cannot be negotiated on acceptable terms, the option terminates. Council member (S12), who moved to approve the amendment, stressed that any final lease “would have all the conflict-of-interest provisions” and other protections built into typical town contracts.
On appraisal and purchase-price questions, Danco stated it had obtained an appraisal on the entire parcel (approx. $3.2 million) during acquisition discussions and offered to share it with the town. Council members asked staff to provide additional financial detail and explicit terms before a final lease is approved.
The council’s approval extends only the option through June 30; it does not finalize lease rent, infrastructure obligations, or a 99‑year lease. Those items, staff said, would be subject to future review and required council approval. The developer’s LIHTC application deadline for the current cycle was noted as April 1.
Next steps: staff will provide the requested clarifications about appraisal documentation, proposed lease terms and infrastructure responsibilities before the council considers any final ground lease.
