Mayor Rocky Anderson's office is suggesting the city loan the California-based Legaspi Co. $2.25 million for a $28 million retail project on the corner of Redwood Road and North Temple.
That amount would be the largest ever from the city's revolving loan fund - and it would virtually gut the account.
There could be even more incentives for Legaspi through a new tool created by the Legislature that allows cities to funnel sales taxes from a project back into a development, according to Anderson's economic adviser, Alison McFarlane. The city isn't disclosing the amount of that potential incentive.
McFarlane justified the large proposed loan Monday, noting the lack of other major developments on the corner.
She also said Legaspi would bring a "high amount" of new jobs: up to 500 full-time positions, ranging from unskilled to professional employees. The company projects annual sales of $56.5 million, generating $3.7 million in sales taxes.
"We have had two or three other developers come try to put together a project, and we haven't been able to make it work. [Legaspi] is seeing the potential where other developers have not," McFarlane said.
Legaspi President José de Jesus Legaspi said he needs the loan to make the Latino-themed shopping center work. He noted his company is taking the risk, not the city.
"We see a great potential over there," Legaspi said. "Unless we're able to get the specific economic-viability factors, it's very difficult for us to do it. We're not asking them to give us anything for free. We never take that attitude."
Legaspi plans a 160,000-square-foot "neighborhood lifestyle retail center" near Sutherlands in an area where about 30 percent of residents are Latino. It also plans to build in Ogden and elsewhere in Salt Lake County.
The Salt Lake City center would be anchored by a 50,000-square-foot Mexican grocery store called Gigante, according to the city, and would be surrounded by about 10 other shops.
Legaspi wouldn't confirm Gigante's interest. In its other projects, Legaspi typically includes bilingual medical and dental services and a multipurpose center.
There is $3.2 million in the revolving loan fund. Counting other pending loans, the Legaspi loan would reduce the balance to $118,000. Such loans can be used for building and property improvements and acquisition. The more typical loan amount is $100,000 or less, though the city in 2003 gave $1.7 million from the fund to lure KUTV Channel 2 to Main Street.
The City Council will discuss the Legaspi loan tonight before deciding whether to approve it.
Councilman Carlton Christensen, whose District 1 includes the project, said he normally opposes subsidies. But he may support this loan.
"In the long term, the city benefits from it," he said, adding that it could spur other retail projects.
"The developer really is taking a substantial risk to do what he's doing."
Councilman Van Turner, whose District 2 borders the property, said he will be lobbying council members to support the loan.
He and Christensen visited other Legaspi projects in California last year.
Turner envisions Gigante surrounded by restaurants, a furniture store, electronics shop - "everything you might see in a strip mall."
Kenneth Neal, chairman of the Rose Park Community Council, said neighbors have wanted commercial development at North Temple and Redwood Road for years.
But Neal would prefer a department store such as Kmart or Shopko, not another grocery store, given that Smith's, Albertsons and Super Saver are nearby.
"We ought to be loyal to the people we now have," Neal said.
hmay@sltrib.com
