FLAGSTAFF, Ariz. - Thousands of tourists each day drive past Tusayan's scattering of modest hotels, restaurants and gift shops, listening as helicopters buzz overhead on their way to the Grand Canyon's South Rim.
Developers have sought for decades to seize on the heavy traffic in the town of about 600, just outside the national park's entrance. An Italian company appeared poised to make that happen with plans that were themselves grand: a dude ranch, high-end boutiques, five-star hotels, a cultural centre, hundreds of homes and a high-density shopping area just off the highway.
But Stilo Development Group USA has defaulted on an agreement with town officials, and its application to access land it owns has hit a snag with the U.S. Forest Service.
The town hasn't given up on Stilo, but its mayor has made clear he wants to see some progress soon and a promise to turn over 40 acres for affordable housing fulfilled. Aside from fewer than 10 private parcels, the companies that run the hotels and feed the tourists own the homes in Tusayan.
"We have a structure. We have an agreement. We have a path. It's up to them to perform," Mayor Greg Bryan said. "I would not have invested the last three-plus years in doing this if I didn't have confidence it could take place. I certainly don't want to have to look for a new dance partner. At the same time, time is ticking, and people don't have homes."
Buying a home in Tusayan has been a dream of some residents since before the community incorporated in 2010. But with many people working lower-wage service jobs, it's unclear how many can afford a residence of their own.
Stilo was supposed to deed the 40 acres to the town no later than April 22 — 14 days after the Town Council approved annexation and rezoning petitions related to three properties that the company owns in Tusayan. The town issued a default notice in early July. The two sides have scheduled a mediation hearing in late September to decide how to move forward, but they hope to avoid it by amending the agreement before then.
Among the things they'll have to change is having the town instead apply for the easements for road construction and utilities on Forest Service land to reach the two properties. The agency said its rules require that easements be issued to the public road agency that has jurisdiction, not a development company. Stilo also has said it would turn over 20 acres immediately if the town agrees not to revert the zoning, and it would hand over the other 20 acres after the Forest Service signs off on the easements.
"From Stilo's standpoint, they would be looking for a little bit more certainty, as well," Stilo spokesman Andy Jacobs said. "If the future, the political winds shift, the project doesn't blow up. This is probably the crux of the deal right now."
Without the Forest Service's approvals, the rest of the development that would transform Tusayan is on hold, Jacobs said.
That includes securing a water source, a process environmentalists and Grand Canyon officials are watching closely. Jacobs said Stilo pulled back an application to the Arizona Corporation Commission to form a water company because it needed approval for the easements first. "We had the cart before the horse on that one," he said.
Nearly 2.5 million vehicles pass through Tusayan each year on the way to the Grand Canyon, according to state Department of Transportation estimates. The agency recently spent $4 million to improve the highway and make the town safer for pedestrians, and plans to expand the airport in town to accommodate commercial passenger flights. About 100,000 of those vehicles park in Tusayan and take the shuttle into the national park, among the country's busiest with 4.5 million visitors annually.
Clarinda Vail, whose family owns property in Tusayan and has fought Stilo's plans over the years, said she's glad to see the Town Council taking Stilo to task on the development agreement. She doesn't want to see the council give too much to get a clear title on 20 acres that doesn't have the infrastructure for electricity, phones or water.
"There are a lot of people that maybe were excited about the possibility (of homes) that are now really questioning Stilo's intentions."
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