Tusayan, known for being the gateway to the Grand Canyon, has a population of only 550 and fewer than 175 voters. On Tuesday, those voters are set to decide whether to incorporate the tourist spot as a city.

Aaron J. Latham / Arizona Daily Star 2000

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Supporters had spent $88,500 as of Aug. 13 to persuade fewer than 200 voters to make the community of Tusayan a city. They'll make that decision on Tuesday.

The supporters include entrepreneur Elling Halvorson of Washington and a group of Italian investors who once backed the 1,000-plus-room hotel complex called Canyon Forest Village, which was defeated by voters. This group proposes to donate about 40 acres to a city land trust, to be used for housing restricted to residents, if a new city council rezones about 350 acres for smaller lots and some commercial development.

That would include two hotels, shops, restaurants and entertainment added to 18 acres behind We Cook Pizza.

That would leave hundreds of acres in one of the country's most desired destinations open for new development and open options to swap Forest Service land for private land.

The proposal is to incorporate to raise a city sales tax that would have Grand Canyon tourists fund city services.

Opponents have presented a competing bill in the Arizona Legislature that would generate taxes but not create a city government. It died in the last session.

Opponents had spent $17,957 through mid-August. They include the Thurston family, which owns Red Feather Lodge, and residents Eric Gueissaz, Becky Shearer and Beth Seely.

Whether to incorporate has been a bitterly contested issue in the 550-person community of Tusayan, with opponents saying incorporation would increase property taxes and be an environmental disaster.

Even where to place the voting booths has been a point of contention.

Opponents point to one study that says the sales tax could cost each homeowner $458 per year.

It would be difficult to ensure that any city council member didn't have a conflict of interest, given that the whole community is employed in tourism, they charge.

Supporters counter that building private housing on city-owned land might be the only way to ensure locals working in hotels and restaurants can ever buy their own homes.

If a city is formed, the Coconino County Board of Supervisors will appoint the first city council, and the next one would be elected by voters.

The area could be rezoned and developed however the new city council chose.

No one has applied to Coconino County to have the 350 acres rezoned, said Bill Towler, community development director.

That land is currently zoned for residential use, with 10-acre lots.

One limiting factor is water, Towler said. Any new development would require new, deep wells or expensive hauled water.