More than 230 people packed into Star Hall on Wednesday, March 5, for a public hearing on the Kane Creek preliminary incorporation feasibility study — a required step in a process that could lead to the creation of a new town southwest of Moab.
A controversial development near Moab is deeply opposed by residents of the area but is rolling forward with plans to incorporate the area.
More than 230 people packed into Star Hall on Wednesday, March 5, for a public hearing on the Kane Creek preliminary incorporation feasibility study — a required step in a process that could lead to the creation of a new town southwest of Moab.
As nearly all seats were taken, some attendees stood in the back, and more than 30 people delivered public comments, almost all voicing strong opposition to the proposed development. Near the end of the event, a banner unfurled from the balcony reading “Repeal SB258,” referring to the 2024 law that made the incorporation process possible.
One person spoke in favor of the development insofar as housing in general is needed in an area with a finite supply of buildable land. Nobody representing the developers offered public comment.
The study, conducted by LRB Public Finance Advisors and required under Utah law for all potential incorporations, found that Kane Creek could sustain itself financially under the state’s assumed population growth, development projections and municipal service costs.
These findings relied on population estimates from the Utah Population Committee and financial assumptions about tax revenue and service costs, as required by state law for all incorporation feasibility studies.
(Rick Egan | The Salt Lake Tribune) Construction on the Colorado River on the site of that was previously the Kane Creek Campground near Moab, Tuesday, Jan. 30, 2024.
However, many at the hearing argued that those projections failed to reflect on-the-ground realities. Residents criticized the report for not fully accounting for flood risks, infrastructure challenges and the feasibility of selling high-end homes in a local market struggling with affordability. Others questioned whether the projected population, as well as tax revenue was reliable and warned that incorporation could create financial burdens for Grand County.
“This study uses false or biased input to justify a project that is neither environmentally nor economically sound,” said Bob Phillips, a Moab resident since 1991, during the public comment period.
A required step in the process
Before public comment began, officials from the Utah lieutenant governor’s office and LRB Public Finance Advisors walked the audience through the study and the incorporation process.
The preliminary incorporation feasibility study is a mandated part of the process established under Senate Bill 258, which took effect in May 2024. The law allows landowners in unincorporated areas to pursue the creation of a preliminary municipality, which is distinct from a traditional town or city.
This step assumes incorporation happens — meaning the study does not evaluate whether the development itself is viable but instead analyzes projected costs and revenue under the assumption that incorporation succeeds.
“Our responsibility is to assess if the proposed municipality could sustain itself financially, assuming development happens as planned,” said Fred Philpot, vice president of LRB.
Under state law, incorporation sponsors now have one year to submit a petition formally requesting preliminary municipality status. If approved, they must designate board members, secure financial guarantees and reach at least 100 permanent residents within four years of issuing their first Certificate of Occupancy or six years from the date of incorporation approval, whichever comes first.
If those conditions are not met, the preliminary municipality would dissolve, with roads and infrastructure reverting to the county.
Among its key findings, the study determined that Kane Creek’s anticipated property and sales tax revenue would exceed its municipal expenses by an average of 15.4% over five years. The study also outlined risk factors, including potential flooding, infrastructure costs and uncertainties in the housing market, but did not include an independent market feasibility study, which is not required under state law.
Jordan Schwanke, a local entities specialist with the Utah lieutenant governor’s office, emphasized that the public hearing would not change the study’s conclusions or the process moving forward.
“The statute is very clear,” Schwanke said in an interview. “Once the study is completed, our office holds a public hearing, and the next step is for the petition to be filed.”
Schwanke added that all questions submitted online and during the hearing — nearly 100 in total — would be answered by LRB analysts within two weeks.
Philpot responded to some questions before time ran out, clarifying the firm’s role in the process. He explained that LRB’s job was solely to conduct a financial analysis based on the data they received, not to assess the viability of the development.
“We highlight the risks, but we do not have the authority to determine whether the assumptions made by the developers or other parties are accurate,” Philpot said. “Our analysis is based on the information we receive and the framework defined by statute.”
Feasibility study assumptions face scrutiny
Chris Baird, who served in multiple Grand County roles for 16 years before resigning in August 2023, questioned the study’s reliance on population projections from the Utah Population Committee, noting they far exceeded the county’s actual growth over the past decade.
(Andrew Christiansen | The Times-Independent) Chris Baird, who worked for Grand County in different positions for many years, raises concerns about the population projections in the feasibility study during his public comment at the hearing.
“This feasibility study is showing that we gain three times [Grand County’s past decade of growth] in five years in just this one spot,” he said.
The study projected a population growth of approximately 1,200 people over the first five years.
Baird also warned that incorporation could impact county finances. According to the study, shifting property and sales tax revenue to the new town would result in an annual net loss for the county, starting at approximately $90,000 in the first year and increasing to more than $1.2 million by year five.
“I just want to make sure that everybody realizes this project is going to cost you millions of dollars, collectively,” he said.
Emily Campbell, a Moab resident and former Grand County planning commissioner, argued that the study’s housing assumptions were unrealistic and would lead to financial burdens on taxpayers.
“This report assumes 100% occupancy of homes priced between $1.5 million and $2.5 million,” she said. “But Grand County’s median home price is about $614,000 — a third of that cost.”
She pointed out that one in four homes in Grand County is a second home, making the study’s occupancy assumptions even less plausible.
“Furthermore, it assumes a 97% rental occupancy rate for townhomes and condos priced at $1.5 million while citing an average household income of $54,000,” she said. “Who makes $54,000 a year and can afford to rent a $2.4 million home?”
Infrastructure and flood concerns
The condition of Kane Creek Boulevard, the road leading to the proposed development already in poor condition from 500 West to the site, has been another major concern. Kane Creek Boulevard from Main Street to 500 West is undergoing a complete reconstruction, work that Moab City Manager Michael Black recently said should conclude this year.
The study clarified that the 1.3-mile section of Kane Creek Boulevard within the proposed town limits would remain a county-owned Class B road — meaning the town would not take on maintenance costs. However, many residents argued that the road is already narrow, frequently damaged and costly to maintain, raising concerns about how it could accommodate increased traffic.
Flood risks were another point of contention. Some residents cited historical data showing that the Colorado River has overtopped Kane Creek Road during high-water years. Dave Wagner displayed a photo from 1983, when floodwaters submerged Potash Road, leaving workers to be ferried by boat.
“Who’s going to be responsible for the cleanup when this thing fails?” he asked. “Because it will fail. It will get flooded.”
Pete Gross displayed a photo from 1983, when floodwaters submerged Potash Road, leaving workers to be ferried by boat.
“Who’s going to be responsible for the cleanup when this thing fails?” Dave Bodner asked. “Because it will fail. It will get flooded.”
Ginger Allen, a disaster response professional, warned that placing a town in an active floodplain could have deadly consequences, citing the risk of floodwaters from waterfalls or the rising Colorado River.
“I’ve worked body recoveries for people who have dealt with flash floods,” they said.
Developers have previously stated that their engineering plans account for flood risks, including elevating structures above the 100-year floodplain and designing stormwater drainage systems to mitigate potential damage. They have also proposed working with the county on road maintenance strategies to ensure safe access during high-water events.
Next steps and the legislative backdrop
Meanwhile, the future of SB258 itself is uncertain. Just a year after Utah lawmakers created the process allowing landowners to establish preliminary municipalities with limited oversight, legislation aimed at shutting it down is advancing in the final days of the legislative session.
House Bill 540, sponsored by Rep. Mike Kohler, R-Heber, passed the House on March 4 in a 59-19 vote and now moves to the Senate, where it must pass before the session ends on Friday, March 7. If approved, the bill would prohibit any new applications for preliminary municipality status after Feb. 15 of this year, effectively repealing SB258.
However, four projects that applied before the cutoff — including the proposed Kane Creek development — would be grandfathered in and allowed to proceed under new oversight requirements.
For Kane Creek, the bill would impose stricter financial and compliance requirements on developers. They would be required to fully compensate Grand County for any damage to county infrastructure before incorporation and adhere to all pre-existing agreements, ensuring that commitments made before incorporation remain binding — even if ownership changes.
The bill also prevents the development from expanding beyond its original proposed boundaries once incorporated.
For now, the Kane Creek incorporation effort moves forward in the face of consistent community turnout that is overwhelmingly against it.
“[In this town], as far as I can tell, for every strong opinion, there’s another equally strong, if not stronger opinion, in opposition,” said Laura Long, who helped found the Kane Creek Development Watch group, which is against the project. “And yet, here we are, people with varying political backgrounds, economic backgrounds, varying lengths of residency and the overwhelming majority of us are here standing united against this project.”
Doug McMurdo contributed to this report.
Note to readers: This story has been updated to accurately reflect statements from several speakers at the public hearing. A previous version of the story included a few quotations that weren’t fully accurate to what was actually said.
This story was first published by The Times-Independent.
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