FLAGSTAFF, Ariz. (AP) — Thousands of tourists each daydrive past Tusayan’s scattering of modest
hotels, restaurants and giftshops, listening as helicopters buzz overhead on their way to the GrandCanyon’s
South Rim.Developers have sought for decades to seize onthe heavy traffic in the town of about 600, just
outside the nationalpark’s entrance. An Italian company appeared poised to make that happenwith plans that
were themselves grand: a dude ranch, high-end boutiques,five-star hotels, a cultural center, hundreds of
homes and ahigh-density shopping area just off the highway.But StiloDevelopment 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 mayorhas made clear he wants to see some
progress soon and a promise to turnover 40 acres for affordable housing fulfilled. Aside from fewer than
10private parcels, the companies that run the hotels and feed thetourists own the homes in Tusayan."We
have a structure. We havean agreement. We have a path. It’s up to them to perform," Mayor GregBryan
said. "I would not have invested the last three-plus years indoing this if I didn’t have confidence it
could take place. I certainlydon’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 inTusayan has been a dream of some residents since
before the communityincorporated in 2010. But with many people working lower-wage servicejobs, it’s unclear
how many can afford a residence of their own.Stilowas supposed to deed the 40 acres to the town no later
than April 22 —14 days after the Town Council approved annexation and rezoningpetitions related to three
properties that the company owns in Tusayan.The town issued a default notice in early July. The two sides
havescheduled a mediation hearing in late September to decide how to moveforward, but they hope to avoid it
by amending the agreement beforethen.Among the things they’ll have to change is having the towninstead apply
for the easements for road construction and utilities onForest Service land to reach the two properties. The
agency said itsrules require that easements be issued to the public road agency thathas jurisdiction, not a
development company. Stilo also has said itwould turn over 20 acres immediately if the town agrees not to
revertthe zoning, and it would hand over the other 20 acres after the ForestService signs off on the
easements."From Stilo’s standpoint, theywould be looking for a little bit more certainty, as
well," Stilospokesman Andy Jacobs said. "If the future, the political winds shift,the project
doesn’t blow up. This is probably the crux of the deal rightnow."Without the Forest Service’s
approvals, the rest of the development that would transform Tusayan is on hold, Jacobs said.Thatincludes
securing a water source, a process environmentalists and GrandCanyon officials are watching closely. Jacobs
said Stilo pulled back anapplication to the Arizona Corporation Commission to form a watercompany because it
needed approval for the easements first. "We had thecart before the horse on that one," he
said.Nearly 2.5 millionvehicles pass through Tusayan each year on the way to the Grand Canyon,according to
state Department of Transportation estimates. The agencyrecently spent $4 million to improve the highway and
make the town saferfor pedestrians, and plans to expand the airport in town to accommodatecommercial
passenger flights. About 100,000 of those vehicles park inTusayan and take the shuttle into the national
park, among the country’sbusiest with 4.5 million visitors annually.Clarinda Vail, whosefamily owns property
in Tusayan and has fought Stilo’s plans over theyears, said she’s glad to see the Town Council taking Stilo
to task onthe development agreement. She doesn’t want to see the council give toomuch to get a clear title
on 20 acres that doesn’t have theinfrastructure for electricity, phones or water."There are a lotof
people that maybe were excited about the possibility (of homes) thatare now really questioning Stilo’s
intentions."Copyright 2013 The Associated Press. All rightsreserved. This material may not be
published, broadcast, rewritten orredistributed.