Salt Lake City and the port authority have forged a deal for the northwest quadrant

The port’s tax income will decrease over time, and it must fund environmental and community improvement projects.

(Francisco Kjolseth | The Salt Lake Tribune) Trucks carrying shipping containers move in and out of the Union Pacific intermodal terminal at a steady pace, west of Salt Lake City. It's part of the jurisdictional area state lawmakers deemed part of an inland port, seen on Wednesday, Nov. 10, 2021.

After years of disagreements, lawsuits and roadblocks, Salt Lake City and the Utah Inland Port Authority have struck a deal about how to move forward.

The port authority has tentatively agreed to fund a human health study, a community study and traffic study. And every year, port and city officials will decide how to spend the port’s revenue on efforts to reduce any impacts to the environment and nearby neighborhoods. The agreement also requires the port to be more transparent about its budget.

The Salt Lake City Council and inland port board reviewed a draft of the deal at separate meetings Tuesday, and both will decide whether to officially sign off on it in public meetings next week.

“[It] gives surety to Salt Lakers and it gives surety to the port on a few key issues that have been very volatile and potentially severely detrimental to Salt Lake City for decades to come,” Mayor Erin Mendenhall said at the City Council meeting. “And that surety is around how we will work together, that we will work together, what that organizational relationship looks like, and how we will invest ... in a few key priorities.”

At the inland port authority’s board meeting, executive director Ben Hart stressed the importance of building a more amicable relationship with Salt Lake City.

“As we are building back the house, the partnership with Salt Lake City is the keystone for how we are moving forward,” Hart said. “If we cannot make right ... we’re not going to be able to put a firm foundation in place for this organization moving forward.”

State lawmakers mandated the two parties reach an agreement by the end of the year when they passed legislation overhauling the port authority’s leadership and revised its funding in the last general session.

Before those modifications, the port authority was entitled to 75% of the city’s property tax revenue in the northwest quadrant, which covers nearly 16,000 acres.

State lawmakers had also granted the port authority broad power to spend its money however it wanted. It had little oversight, no requirement to follow the public procurement process and virtually no say from Salt Lake City.

The city deemed the formation of the port authority unconstitutional, hence the lawsuits.

The Utah Supreme Court ultimately ruled in June that the port authority was lawful and legitimate, but left the question of its tax revenue unresolved since the Legislature had already introduced reforms.

Under the new revenue structure, the percentage of property taxes owed to the port authority phases out over time.

Over a period of 25 years, the Inland Port Authority will receive 25% of those taxes, plus:

  • an additional 40%, which reduces year by year until it hits 28% in 2029;

  • 10% from 2030 to 2037; then

  • 8% until 2047, when the tax payments end.

Another 10% of the port area’s tax revenue will go to the city’s Redevelopment Agency for affordable housing projects. This distribution is further codified in the agreement between Salt Lake City and the Inland Port Authority.

A health impact assessment, a community impact assessment of the city’s west side and a traffic study must also be completed by third-party research firms by the end of next year. These studies will serve as baselines and help guide future spending on environmental and community improvements.

The port will spend 40% of its city tax revenue on environmental mitigation, and another 40% to temper neighborhood impacts.

Under the agreement, a group called the NWQ Review Group will evaluate community and environmental project proposals, developing a priority list for the port authority to review. That group will include members of city departments, the mayor’s staff, City Council staff, as well as stakeholders like the Audubon Society and community leaders in west side neighborhoods.

Hart, who became the port authority’s new boss last month, and the new board have vowed to reform the agency’s spending and include more transparency. They’re currently drafting a master plan for the port area and have put all big-dollar projects on hold until that plan is complete.

The port authority’s agreement with Salt Lake City specifically notes it will hold public hearings about its budget with line-item approvals of the mitigation projects it will fund.

“I want to really credit Salt Lake City,” Hart said. “Them pushing us as much as they have has made us a much better, much stronger organization.”

The draft interlocal agreement, along with a summary from City Council staff, is available below.