Developer, Walker County commissioner address concerns about Canyon Ridge Resort project

Developer, Walker County commissioner address concerns about Canyon Ridge Resort project

June 6th, 2017 by Tyler Jett in Local Regional News

Scenic Land Company President Duane Horton looks out from an overlook near the site of the planned Canyon Ridge Resort.

Photo by Doug Strickland /Times Free Press.

ROCK SPRING, Ga. — The developer behind a $106 million luxury hotel and conference center on Lookout Mountain said he needs a property tax break to pay for key parts of the construction.

Duane Horton, president of Scenic Land Investments, told an audience of about 100 at the Walker County Civic Center on Monday night that his Canyon Ridge Resort project will generate an extra $1 million in tax revenue for the county. But in turn, the county needs to abate property taxes for 30 years.

Horton said he needs that money, which he will receive up front through a bond, to build a fire station, expand the sewer plant, increase the size of nearby water lines and improve hiking trails. The money also will cover the cost to build the conference center at the resort, which he believes is typically a local government's responsibility.

"Can you explain to me why there needs to be a 30-year tax abatement?" asked Nancy Burton, of Lookout Mountain. "I was stunned by that number."

"What we have on the table is the bare minimum for us to fund the portions of the project that are typically funded by the government," Horton said.

Walker County Commissioner Shannon Whitfield then stepped to the microphone.

"Thirty years is on the high end," he conceded. "... But this project very well could be the largest single investment ever made in Walker County at one time."

Scenic Land Company president Duane Horton talks about the site of the planned Canyon Ridge Resort on Thursday, May 11, 2017, in Rising Fawn, Ga.

Scenic Land Company president Duane Horton talks about...

Photo by Doug Strickland /Times Free Press.

Whitfield said the abatement will apply to a golf course and the 48-acre plot where the resort will sit. Right now, he said, the two parts of land bring in about $16,700 a year in property taxes.

Over 40 years, that would come out to about $668,000 in property tax.

When Horton's team develops the resort (he thinks it will open in fall 2019), the county will charge no property taxes for the first five years. The next 25 years, the county will provide a 90 percent discount on the property taxes.

Over 40 years, Whitfield said, the resort would pay about $13.6 million in property taxes. Plus, based on projections of 35,000-50,000 visitors a year, he said the county would bring in about $26.4 million in sales tax and $30 million from a new tax specifically for booking a hotel room, which the state legislature must approve for Walker County.

"What do rich people do when they get out of town?" Whitfield asked rhetorically to the audience. "They spend crazy amounts of money. I want to go up and shake their hands and say, 'Welcome to Walker County!'"

After Whitfield and Horton announced the 180-room resort project last month, some local Republicans criticized the plan — in large part because of the property tax abatement. Though the county would not lose any money if the project goes sideways, some residents believe Whitfield could have negotiated a better deal to bring in more property tax revenue.

Homeowners in a neighborhood next to the resort site also agreed to become a special tax district, doubling the amount of money they pay in the local portion of the property tax. Like the company with its tax breaks, Whitfield said, the county is going to use this extra money to build infrastructure

Whitfield is not yet sure how specifically that money will be used, but the county will earmark the funds for public projects in the Canyon Ridge community. A team of advisers from the neighborhood will work with Whitfield to decide how to spend the money. Whitfield said they will wait to see what Horton's team can't get to with the money they save through the tax break.

Horton has also applied for a special sales tax abatement from the state through a Department of Community Affairs tourism development program. The DCA is still considering Horton's plan, but last week the agency approved his pre-application, in which he explained why his project would help the state.

Located within a two-hour drive of Nashville, Birmingham, Ala., Chattanooga and Huntsville, Ala., Horton argued his resort will bring in a lot of out-of-state visitors, boosting the local economy.

Scenic Land Company president Duane Horton talks about the site of the planned Canyon Ridge Resort on Thursday, May 11, 2017, in Rising Fawn, Ga.

Scenic Land Company president Duane Horton talks about...

Photo by Doug Strickland /Times Free Press.

Dean Kelley, who volunteered on Whitfield's campaign last year, questioned Horton's projection that the resort would attract $22 million in revenue every year. According to an audit, The Chattanoogan on Broad Street received $12.5 million per year in 2014-15.

"Why will this project bring in $10 million more?" Kelley asked.

Horton said visitors will spend more money on the resort's golf course, as well as at a ropes course and shooting course. He projects the rooms will rent for $280 a night. By comparison, the Chattanoogan's website is currently advertising rooms for Labor Day weekend at rates of $150-$250 a night. Horton also expects more people to eat at the resort because, unlike the Chattanoogan, his project will be secluded.

"No one wants to hop off the interstate and be at a resort," he said. "They want a little bit of a drive, but they don't want too much of a drive. You've got a little bit a Goldilocks: Your perfect scenario."

Horton first tried to develop a resort here with a partner in 2009. He said they secured funding for the deal, but a member of his team stole his idea. He sued the bond underwriter that allegedly worked both deals. And after a four-year legal fight, a jury and judge awarded Horton $32 million. He settled for an undisclosed amount.

Horton hopes to secure funding for this new project by the end of the year and break ground on Canyon Ridge in March.

Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.


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