Russ Watts has sought a development agreement with Heber City for his affordable housing community for three years. Now, it will finally be drafted after overcoming a parking problem he said could have destroyed the project’s viability.
Watts, who lives in Midway, came up with the idea in 2022 after realizing just how many of his employees at Watts Enterprises commute to Wasatch County because they cannot afford to live there.
The community will be called Celebration Housing, in part because securing housing for the county’s essential employees will be well worth celebrating.
“We respect and appreciate all the different entities that provide services for our community,” Watts said. “So, I think our No. 1 celebration will be (that) we now can say that we can accommodate housing for anyone who wants to live in the valley, work here and enjoy the social community here.”
Celebration Housing will include 148 one-, two- and three-bedroom apartments on 8.75 acres next to Wasatch High School. Watts hopes to add more units in the future, but the details have not been worked out, and Heber City has only approved the first phase.
The 148 apartments will be affordable to tenants making 40 to 80% of the area median income, which is between $54,000 and $109,000 for a family of four in Wasatch County.
Half of the units will be affordable to residents earning 80% AMI; 59 units will be affordable to those at 65% AMI; and 15 units will be affordable to those at 40% AMI.
Mountainlands Community Housing Trust will deed-restrict the units to ensure they remain affordable in perpetuity.
Celebration Housing will not include any market rate units, as was originally planned, because of loan requirements by the U.S. Department of Housing and Urban Development.
The first 148 apartments will cost $43 million. Watts Enterprises expects a return on investment of around 6%.
In addition to Watts’ company, the project has several financial contributors, including the Hicken family, who donated 4.25 acres for the first phase; the Wasatch County Housing Authority, which is investing $750,000; and Heber City, which agreed in December to defer Celebration Housing’s $3.2 million in impact fees for up to 12 years.
Impact fees are one-time fees on new development. Watts will pay back these impact fees at 4% interest. The details of the deferment will be finalized in his development agreement with Heber City.
The development agreement can now be drafted because the City Council has agreed to apply a less stringent parking code to the development.
City code typically requires multi-family dwellings to have two parking spaces per unit, or 296 parking spaces in Celebration Housing’s case. The City Council on July 7 agreed to apply its downtown parking code, which instead determines the required number of parking spaces based on the number of bedrooms. That means Watts needs 266 parking spaces for the first phase of the project.
Finding room for parking without reducing the number of units has been one of the greatest challenges of the development, Watts said, especially when factoring in future phases.
City community development director Tony Kohler proposed reducing parking for Celebration Housing because the plan can always be tweaked in future phases if there’s a need.
He added that the development is close to potential employers like the high school, Heber Valley Hospital and Walmart, meaning some tenants may choose to walk, bike or use High Valley Transit instead of driving every day.
Watts hopes to partner with the Wasatch County School District to add the required parking for an eventual full buildout of Celebration Housing.
In a March school board meeting, he pitched the idea of installing nearly 180 parking spaces on school district property and splitting their use between the school district and the affordable housing community,
The school board declined to take the matter to a vote. Board members had concerns about mixing public money with private industry and raised questions about whether employees would settle for renting instead of owning.
Watts is still hopeful he can convince the school board to partner on parking in the future, potentially by adding owner-occupied housing in future phases.
The City Council will formally approve or deny the Celebration Housing development agreement after it is finalized within the next 90 days.
After that, Watts will secure loans with the U.S. Department of Housing and Urban Development. But first, the economy will have to go “back to normality,” as he put it. He said interest rates would be over 6% if he took out his loans today; he needs them to be closer to 5% for Celebration Housing to be fiscally feasible.
Watts hopes to begin construction on the first phase of Celebration Housing in the spring of 2028.