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A group that opposes the development of a large-scale gated community in central Vermont claims the developer illegally transferred $6 million worth of Vermont properties.

The Alliance for Vermont Communities alleges that David Hall, a wealthy Utah businessman, transferred ownership of 1,400 acres of land in four towns from a nonprofit foundation he runs to a for-profit entity. Lawyers for the alliance say that in diverting properties from the charity to a limited liability company, Hall has abused the nonprofit tax exemption.

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Hall denied the allegation in an interview with the Valley News last week, describing the transfer as “a normal property transfer from one entity to another.” He did not immediately respond to a request from VTDigger for comment Wednesday evening.

Since 2015, Hall, who is a devout Mormon, has been buying up properties in four towns near the birthplace of Joseph Smith, the founder of the Latter Day Saints, as part of a plan to bring 20,000 people to this rural corner of the Upper Valley, quadrupling the population of the area, which is currently about 7,000 residents.

Over the next several years, he is looking to buy a total of 5,000 acres for a self-sufficient “gated” community called NewVistas. Members of the community would surrender their assets to join and would become part of a highly structured organization that would be economically independent and have its own food supply, sources of renewable energy and a governance structure similar to that of the Mormon church.

The proposal has generated intense local reaction. Residents in the towns of Tunbridge, Royalton, Sharon and Strafford where he has purchased 20 properties voted last year to support a ballot initiative opposing the NewVistas mega development.

The local activism has morphed into an appeal to state lawmakers to pass a resolution opposing the project, and a request that the Vermont Attorney General’s office investigate Hall’s real estate transfers.

In late 2016, Hall transferred ownership of 20 properties in the towns of Tunbridge, Royalton, Sharon and Strafford from NewVistas Foundation to Windsorange, LLC, according to information provided by the alliance.

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John Echeverria, a professor at Vermont Law School and member of the alliance, told lawmakers at a hearing Wednesday that the group, which opposes the NewVistas community, asked the Vermont Attorney General’s Office last September to investigate the legality of the transfer.

A similar opposition group in Utah filed a complaint with the Utah Attorney General’s Office, also on the grounds that Hall had illegally moved money from NewVistas Foundation, a nonprofit charity, to DRH Holdings, a limited liability company, owned by Hall.

Echeverria says the property transfers appear to violate tax laws as applied to nonprofit organizations. Donors who give money or assets to a charitable organization are not allowed by law to recoup contributions for personal use.

“It is wrong for a person to use his power over a nonprofit organization to benefit himself personally,” Echeverria said. “It is against the law (in both Utah and Vermont) for a nonprofit foundation to simply give away its charitable assets to one of its board members or any other private individual.”

Hall is prohibited from “looting” valuable financial assets donated to NewVistas Foundation for his own benefit, Echeverria said. “The law bars David Hall from picking the pocket of a charitable foundation, especially one he originally helped create, to pursue his own personal commercial business venture,” he said.

The transfer sets a “destructive precedent for Vermont,” Echeverria said, and it signals to nonprofit groups that they can divert money for charitable purposes to private individuals, eroding the public trust equated with a charity’s status as an untaxed entity.

Echeverria asked lawmakers to consider finding a remedy in Vermont statutes that would address “the apparent violations of Vermont law by Mr. Hall and the NewVistas Foundation.”

Other members of the alliance, including Rep. Tim Briglin, D-Thetford Center, asked the House Natural Resources, Fish and Wildlife Committee to approve a resolution, H.R.20, opposing the NewVistas development.

Briglin and other residents of the area said that Hall’s vision for gated communities is not limited to the Upper Valley. Hall has said he wants to create 20 communities in Vermont with 20,000 people each. The largest city in Vermont, Burlington, has about 42,000 residents.

“Heads up, Vermont, this is coming your way,” Briglin told his colleagues. “With hundreds of millions of dollars at his disposal, the NewVistas experiment could be hanging over us for decades.”

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