Mining Firm’s New Mother Lode Lies in Real Estate Venture
At the edge of this sprawling Salt Lake City suburb, just past the bare frame shells of new houses and sketched-out subdivisions, Kennecott Utah Copper Co. plans to build a new community to house more than 40,000 people.
The development at the foot of the Oquirrh Mountains is a monumental example of the New Urbanism that land planners say is the answer to the West’s exponential growth: narrow streets, plenty of sidewalks, and shops and restaurants within walking distance of every home.
But the project, called Sunrise, might also bring a new day for one of the region’s oldest and most influential companies, which is looking for something to do when the rich ore runs out.
“If you think about South Jordan being a 20-year buildup, then that starts to coincide fairly nicely with the sequence at which we’ll start to phase out of the mining business,” said Bill Williams, a Kennecott vice president and Sunrise’s project leader. Land was once plentiful in the West, but it’s now a valuable resource, Williams said.
It’s an idea that puts Kennecott at the forefront of the industry, according to Jane Long, dean of the Mackay School of Mines at the University of Nevada-Reno.
Indeed, two of Kennecott’s biggest competitors--Phelps Dodge in Nevada and Australian-owned BHP, which was founded in Arizona--say they have chosen to drop non-core businesses rather than diversify.
And Karen Batra, spokeswoman for the National Mining Assn., said large mineral companies usually head overseas when resources get tight.
That can hurt company towns such as Playas, N.M., where Phelps Dodge shut down a smelter in 1999, and San Manuel, Ariz., where BHP laid off 2,200 workers the same year.
“This certainly sounds like a very unique and positive move that Kennecott is making,” Batra said.
Land development is not unknown for Kennecott. In 1927 the company built Copperton, a planned community for employees complete with schools, parks and a grocery store. It did the same thing a decade earlier at its namesake town in south-central Alaska.
It sold the Copperton homes to residents in the 1950s, but the town of about 500 still exists, its small, stuccoed houses with copper roofs nestled in the Oquirrh foothills.
Jonathan Callender, Kennecott’s manager for strategic resources, is a Copperton resident and one of the designers of the Sunrise project.
He said his hometown is a model for the new development, right down to the wrought-iron gateway to the central park that shows up in the Sunrise plan. Each house is a five-minute walk from the town center, residents all know one another, and Santa Claus even visits every home on foot at Christmas.
In his vision, Sunrise will have the same small-town feel, with playgrounds, churches, schools and stores within a 10-minute walk of every home.
In the short term, Kennecott wants to break ground in 2002 on Sunrise’s first phase of 2,200 acres, which consists of offices and shops surrounded by 3,825 single-family homes and 2,750 multifamily units.
The nonresidential properties will go on top of land that once housed Kennecott’s evaporation ponds and were cleaned up to federal standards in the mid-1990s. A golf course planned for later development will surround a county landfill that can’t be built on.
The homes will be built atop what today are wheat fields, and the entire East Village, as Phase 1 is called, will be buffered by a wide, green park. Callender says the trees planted there will help Rio Tinto, Kennecott’s parent company and the world’s second-largest mining company, balance out the environmental impact of the coal it produces.
Trees also will line the development’s narrow streets. Main arteries will be parkways, with jogging trails down the center. Houses will be close to the streets and will likely have front porches, although design details are not fixed yet.
Eventually the development will include 13,500 residential units on 4,500 acres.
The proposals have gone over well in South Jordan, which has a population of about 33,000.
“Here we have a single landowner that owns 6,000 acres and is willing to work with us on a community that is planned from the ground up, so you know where the streets, sidewalks, parks, trails, open space and stores will be from the beginning,” said Keith Morey, assistant to South Jordan’s city manager. “It’s a planner’s dream.”
The one question is whether people will buy into the concept.
To help, Callender said basic home prices will be set even with market value, which is now about $180,000 to $240,000.
The company is also willing to provide incentives for local business owners to move in, including housing above their shops, and plans to build schools to rent to the Jordan School District. There are plans to lure a zoo or children’s museum to boost the neighborhood’s appeal to young families.
With projections from the governor’s office showing the Salt Lake region’s population zooming from 1.7 million people to 2.7 million in 2020, there should be no problem finding buyers, said Kristin Thompson of Envision Utah, a planning group.
“I think if they build it they will come,” she said.
In two decades, Sunrise could include adult education centers or a high-tech company where mine workers can find new careers when the Bingham Mine begins to run dry, and Kennecott may convert more land for commercial development or even a university campus.
“We’ve been here 100 years already, and we’d like to see this go out another 100 years,” Callender said. “So what we want to do is create something that will really look toward that long period into the future.”
