The largest ski resort in the US, in a corner of Utah long popular with wealthy travelers and second-home buyers, is expanding — and turning to the municipal bond market to help pay for it.
A special district created to fund public infrastructure is expected to borrow roughly $380 million of high-yield municipal debt on Thursday to support new development in and around Canyons Village at the base of Park City Mountain in Utah. Proceeds from the sale will finance projects such as “ski-in, ski-out” boutique condominiums, hotels, single-family homes and commercial space.
High-end real estate projects are increasingly tapping the muni market, creating so-called luxury dirt deals for investors willing to take on more risk. Such financings have become more common in the state and local government debt market, which traditionally funds projects like public school construction and airport upgrades.
The deal for Park City, which is set to host events during the 2034 Winter Olympics, involves a partnership of firms tied to a private real estate enterprise focused on multifamily, hospitality and mixed-use projects, according to bond documents.
The bonds are secured by certain future property- and sales-tax revenue generated by the project. They are unrated and will be sold only to qualified institutional buyers and accredited investors, according to bond documents, which is typically a sign of higher risk. D.A. Davidson & Co. is leading the bond sale. The firm did not immediately respond for comment.
Developers use the muni market because it can lower financing costs and keep the debt off a municipality’s balance sheet, according to Shannon Rinehart, co-head of muni investments at Columbia Threadneedle Investments. She said the structure also lets developers preserve capital for amenities that can make projects more attractive.
