Arguments over RDAs often roil the Legislature, but the session that adjourned this month stands out because lawmakers passed a far-reaching bill. Senate Bill 184 would place a one-year moratorium on RDAs for retail development and eliminate most powers of eminent domain (condemnation).
The mayors of Ogden and Salt Lake City, among others, have asked Gov. Jon Huntsman Jr. to veto the bill. On balance, however, we believe the governor should sign it.
One reason for our conclusion is that the U.S. Supreme Court heard arguments last month on a case that may decide whether RDAs can use eminent domain purely for economic development. Under the Constitution's Fifth Amendment, government can take private property only for "public use" and with just compensation.
Traditionally, such a public use meant a school or a road, for example. But in the 1950s, the Supreme Court held that a taking to clean up a blighted neighborhood was a public use as well.
State courts have issued contradictory opinions as to whether job creation and economic development by themselves, in the absence of blight, are a valid public use. That is the question the high court is expected to answer.
In light of that, the moratorium on retail development via RDAs in SB184 strikes us as timely. Utah can take a time-out as it awaits the Supreme Court's ruling. After the justices decide, the Legislature can act accordingly.
Salt Lake City is particularly concerned about another provision of SB184, which prohibits RDAs from using tax increments to pay for a stadium or arena. RDAs use the greater property tax income created by redevelopment to finance projects. Without that ability, the city argues, it will be impossible to help finance a new stadium for Real Salt Lake, the new Major League Soccer franchise.
The soccer team wants to build a $60 million stadium, and seeks public funding for about half of that. However, Gov. Huntsman announced Thursday that he would work with the soccer team to create some public-private method other than an RDA to finance the stadium. He did not say how.
We believe that any public financing is premature before Real has played a game or proved it has a market here. Its first season begins next month. Let's see if pro soccer has legs in Utah before committing any public money.
