Moab resort developer buys 151 acres north of city's airport

Affordable housing might be coming to Fillmore after all—but not in any way anyone so far imagined.

A massive industrial project unveiled last week at a meeting of the county’s economic development board involves a planned $280 million industrial sized modular home factory to be built in the next three years on a 150-acre site a short distance from Interstate 15 on the county seat’s west side.

A factory floor consisting of a million square feet could combine robots and workers churning out complete, livable housing modules—think complete as including cabinets and windows and doors—at a rate of 6,000 of them per year. The company is named American Spec Modular.

“This factory will be nearly 50 percent robotically automated. Imagine a Ford automotive plant in Detroit. This is like manufacturing homes like Ford manufactures cars,” said Wayne Aston, owner and CEO of Prestige Resort Development Group, whose most notable accomplishment of late is Sage Creek in Moab, a $100 million condo-resort project.

Aston was in Delta Wednesday morning to introduce himself to county economic development board members and describe his vision for fixing what ails the state’s housing market and a construction industry mired in skilled labor problems and materials costs spiraling out of control.

Aston said his group purchased the 150-acre site—it sits along W 200 S or W. Canyon Road, directly across the roadway from Fillmore Municipal Airport—and hired Big D Construction, a Salt Lake City firm that does about $2 billion in business a year, to start preliminary planning for the project.

Aston said he envisions employing about 250 fulltime workers—he wants to staff the facility with an all military veteran workforce—and somewhere between 150 and 180 truck drivers, hired to operate the factory’s 150 semis, delivering finished modules to building sites near and far.

He said he is also partnering with a firm that will operate a second factory on site, this one producing composite building materials from plastic and wood waste. Known as Everwood, the composite materials are made using an extrusion process to create sustainable building materials.

“Everwood is an alternative lumber that is created from landfill waste,” Aston said. “So we can actually take a truckload of garbage, push it through our machine and push out a railroad tie, or a two-by-four, or a four-by-eight piece of sheathing. We can make trusses with it, floor joists with it.”

Aston said the material has already been tested in Utah in a stretch of railroad track ties.

“This isn’t brand new technology. It’s 10 years old. It’s evolved,” he said.

Aston said the ambitious project calls for about $100 million in infrastructure investment, including extending a rail line to his facility.

He said study of that is ongoing, but one idea is to revitalize the old 32-mile branch of Union Pacific line that ran from Delta to Fillmore starting in 1923. The line was officially abandoned in 1984, though an earlier effort to abandon it as far back as 1942 was scrapped.

Aston said he also will need to improve and widen the overpass at 200 South and the interstate and get new highway exits for that area so the trucks can easily get into and out of the factory facility. He put the price tag of that work alone at about $80 million.

A finance consultant with Aston said infrastructure improvements would likely be financed through some sort of public-private construct or combination of them— tax increment financing (TIF), creation of a redevelopment agency (RDA) or a public infrastructure district (PID). The Utah Inland Port Authority was cited multiple times as an example of successful PID infrastructure financing— it raised $150 million selling tax differential bonds last year.

A mix of equity and debt would likely finance the actual project.

Aston said he’d like to keep the factory and Everwood facility on about half the acreage and leave the other half open to other innovative businesses that could serve as ancillaries.

Aston spent some time explaining the “why” behind his vision, a virtual tour of the state of housing and construction in the state and across the country.

He said his experience building Sage Creek in Moab led him to the plan for a modular housing factory. He said he witnessed first hand the impact of importing skilled labor into Moab, which added, he suspects, at least an additional 20 percent to his development costs versus if he’d built the resort along the Wasatch Front. He also said he’s witnessed first hand the struggle his employees have had finding affordable housing—he described how some of his lower wage people were spending sometimes $2,800 a month renting double wide trailers, often living two families to a home to make it affordable.

“We got intimately knowledgeable about this affordable housing crisis. Moab might be one of the harsher cases in the state because you’ve got this extreme tourism demand… what happens in that environment is you have all this hospitality, support services and area median income is only about $55,000 a year. Sixty-eight percent of that county makes less than $24,000 a year,” he said, pointing out that only a few thousand residents support a tourism industry that typically attracts 4 million people into the area each year.

“And so there are these interesting market anomalies that cause housing to be extremely high demand and very expensive. We have housekeepers that help operate the resort that are paying $2,800 a month for a double wide trailer. And they can’t afford that so they have two families in a double wide trailer. To me that’s unacceptable,” he added.

After exploring modular home building options, he discovered that most manufacturers require giant deposits. And on top of that, there’s often a waiting list for such products that can mean anywhere from a year to three before delivery.

“I just thought, that doesn’t help me at all. I can’t wait two or three years and take the risk of putting half the money up, nonrefundable,” he said. “So I said I guess we’re going to become a modular manufacturer. So that’s what we did.”

At capacity, American Spec could become the largest modular home builder in North America within a few years.

Aston said tumult in the construction trades also figured into his planning. He spent 10 years as a stone and tile contractor. He said while in the past property developers could hire who they please and have ultimate control on how property is developed, the timing of construction, those days are mostly over. Subcontractors, now, effectively rule the industry, dictating costs and setting the pace of work.

“That’s because the scarcity of a skilled workforce. There’s so few skilled framers, skilled electricians, plumbers and the like…it’s a losing battle,” he said, adding that he believes the construction industry never actually recovered from the 2008 housing crash. “This is all contributing to the affordable housing crisis.”

Aston said a factory for homebuilding solves a lot of these issues.

“If you talk to construction workers and they have the option to work in one climate controlled environment every day and it’s predictable, versus driving to Park City or being in that environment or this environment, there’s no comparison,” he said. “You can make more money, you can have more precision, you can have a higher quality product building inside a facility.”

Aston was asked by board members how his employees would deal with the lack of housing themselves in the Fillmore area. The developer said his plans call for the bulk of his workforce to live outside the area, commuting to work three 12-hour shifts and then commuting home the remainder of the week. Aston said he suspects only about 50 employees, mostly in management, would become Fillmore residents.

It’s possible a housing development or hotel- style accommodations could house the employees who commute into Fillmore for work.

Aston was asked what type of income workers at American Spec can hope to earn. He said he wants to create a culture where employees stay for three to five years and learn to become their own producers, entrepreneurs. He said pay would be above average and opportunities for training in all kinds of business subjects would be offered.

“My goal is not to enslave people into a job. I want to provide an elite level income and help provide opportunity for them to move on,” he said. “Our minimum wages will be 20 or 30 percent higher than anything else in the market. By design.”

Aston said he doesn’t think it will be uncommon for baseline floor workers to make $28 to $35 an hour.

American Spec has already tested some of their concept at an Andrews, North Carolina facility that builds affordable modular homes. Aston said the most expensive model probably costs $107,000. He said his goal is truly affordable housing—with rent or mortgage payments around $600 monthly.

But building single family homes is not likely at the Fillmore plant, he said. Plans call for the facility to build modules for multi-family developments, like 700-unit apartment complexes.

“One apartment unit could take maybe three modules. We produce that in the factory. We put it on our trucks…we’ll deliver 2,000 modules in sequence and they’ll be stacked, stitched and cladded,” by a general contractor, Aston said.

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