On a 3-2 vote Tuesday, the Roanoke County Board of Supervisors advanced a new tax-backed economic incentive plan for the South Peak development.

The board created the South Peak Community Development Authority, a quasi-governmental body with the power to issue up to $16 million worth of tax-exempt bonds.

They'll be used to help build roads, put in curbs and gutters, create storm water management systems and erect a parking garage.

The developer, not the county, would be responsible for repaying bondholders.

A $140 million mix of commercial, retail and residential development is planned for the 63-acre site, formerly known as Slate Hill, at U.S. 220 and Virginia 419. It calls for the building of hotels, restaurants, office space and high-end condominiums at the county's busiest intersection.

Tuesday's vote is, in a sense, the culmination of two years of negotiations between developer Jim Smith and the county.

But as the developer and county staff pointed out during Tuesday's meeting, it is only the beginning of a complex months- or years-long process of getting regulatory approval, obtaining commitments from potential tenants and actually selling the bonds.

Smith's plans for the site have been contentious since he first cleared the hillside almost seven years ago.

The controversy seems to have abated little, as Tuesday's meeting drew about 100 people to the county administration center, even though it was an afternoon session and not officially a public hearing.

Board Chairman Butch Church decided to shift the order of business for the afternoon, so public comments -- usually heard near the end of the meeting -- were aired during the board's debate on the ordinance.

Michael Mixon warned that the board was setting the "dangerous precedent" of becoming the "solution of last resort" for developers who couldn't find private financing.

He and others said it wasn't fair to other developers who've paid for similar improvements out of their own pockets.

William Terry, however, saw the authority and the project as "all upside, no downside" for the county. Although much of the newly created tax revenue initially will be diverted to repay the bonds, millions more in new taxes will help fill the county's coffers for use to build schools and provide other services, he said.

Supervisors Michael Altizer and Richard Flora, who voted against the authority, acknowledged that governments routinely provide some tax relief to new businesses as an incentive to bring them to the county.

But the South Peak plan was asking too much for too long, they said. The plan would return 70 percent of all new local tax revenue that the project generates to the authority for 20 years to pay off the bonds.

Flora argued that it was much more common for the county to offer tax breaks for one to three years, not two decades.

But what those two saw as a drawback, the other supervisors saw as a plus.

Supervisor Charlotte Moore, in whose district the development will be, said even with the tax break, the development is expected to produce more than $20 million in new tax revenue over those 20 years.

And that will mushroom after the bonds are paid off and the county starts receiving 100 percent of the taxes, she said.

She also noted that unlike the similarly controversial Keagy Village project, the South Peak developer will be required to have signed contracts for any space it plans to build before bonds can be sold.

Moore and Supervisor Ed Elswick pointed out that the undeveloped property currently is generating only about $35,000 a year in taxes.

"How could we not consider" an authority, Elswick asked, "with no money upfront, no risk to taxpayers, and we get millions of dollars from somebody else's work?"

County Attorney Paul Mahoney said that he and County Administrator Clay Goodman believe the agreement reached Tuesday "will minimize risks to the greatest extent possible."

Among the safeguards in the ordinance are that the county will be able to exercise oversight of the project by appointing the members of the authority, have final approval over site and development plans, and must give its approval before any bond sale.

The ordinance also sets a time limit on the project so that the authority will dissolve if bonds are not sold in three years.