County ready to back Draper's big high-rise development?
Draper's plan to develop a complex of high-rise office towers around its FrontRunner train station is enough of an "intriguing endeavor" that Salt Lake County looks likely to commit its support to the project Friday.
But it would be support with strings attached to try to ensure the county can back out if the project falters.
At a special 9 a.m. meeting, the County Council will consider a resolution authorizing Mayor-elect Ben McAdams to negotiate terms of county involvement in a "Community Development Area (CDA)" on 345 acres strung out along the railroad track.
Council approval of the resolution is being recommended by its Debt Review Committee, composed of the county's chief financial people, which grilled Draper officials last week about the project, its potential and its challenges.
The committee concluded Draper may have a "huge opportunity" to develop office complexes appealing to high-tech companies eager to have their operations close to eBay, Adobe and other firms moving to southern Salt Lake and northern Utah counties.
That opportunity may be realized soon if the county's commitment to the project enables Draper to tell two unidentified but potential tenants, both linked to national companies, that public financing has been secured to build infrastructure to support the development, especially a multi-story parking structure.
The county would join seven other taxing entities, most notably Canyons School District, that have been asked to give up three-quarters of their shares of the new property taxes generated by the CDA over the next 20 years to finance installation of internal roads and semaphores, water and sewer lines, storm drains, street lighting and parking.
This infrastructure would be put in by a developer working with the city, Draper Holdings Inc., with reimbursement coming from the pot of tax money funneled to the CDA.
Without these improvements, Draper officials say the land is worth about $6 million, a value likely to rise slowly. But if the improvements are made and plans pan out, acting city manager David Dobbins told the Debt Review Committee the area's development value is projected to skyrocket to $1.2 billion.
County Chief Financial Officer Darrin Casper said he was assured by the Economic Development Corp. of Utah (EDCU) that Draper's scenario is realistic, including its assertion the companies in question want to decide by early next year where to locate their operations.
But he also noted that the amount of tax money the county would have to pass through $44 million over 20 years is far more than anything the county has done before. Questions also remain about whether Draper's growth projections are valid.
Consequently, the Debt Review Committee urged the county to limit its exposure by including a number of terms in the interlocal agreement McAdams would have to negotiate with Draper to arrange tax-increment financing.
The committee unanimously endorsed a motion suggesting the mayor could:
• Reduce county participation to the area around the FrontRunner station and eBay, dropping a block of property farther south.
• Determine if the proposed 75/25 split in the distribution of new tax revenues (the county keeping 25 percent) should be adjusted. Canyons School District, the CDA's largest contributor, required a 70/30 split in its agreement with Draper.
• Discuss a clause letting the county withdraw from the CDA in, perhaps, seven years if development stalls out.
• Ensure the county can review reimbursements made to the developer to guarantee the amounts are legitimate.
P The Salt Lake County Council also is expected to authorize staff to negotiate the purchase of 60 acres at 3900 S. 7200 West (the old Hercules missile-engine facility) from Alliant Techsystems (ATK). A bond to develop regional parks, approved by voters Nov. 6, allocated $5.5 million for the purchase.
The council meeting is at 9 a.m. Friday in the first-floor chambers of the North Building of the County Government Center, 2001 S. State.