Salt Lake City gives rail-car firm 20-year, $9.6 million development deal to create 1,000 jobs, amid worries that inland port plan could take the money

(Al Hartmann | Tribune file photo) Stadler company officers and Utah leaders tour one of Stadler's new TEXRail trains. The company broke ground for a new Stadler plant at 100 S. 5600 West in Salt Lake City, Oct. 13, 2017. Stadler US is an affiliate of a Swiss rail-car-manufacturing company. The project has received a tax incentive from the Governor's Office of Economic Development, which anticipates it will result in the creation of dozens of new, high-paying jobs.

A first-of-its-kind Salt Lake City development incentive to help a Swiss rail-car maker build and staff a manufacturing plant with 1,000 employees won city approval Tuesday, despite concern that a state-driven inland port plan could siphon money away from the $9.6 million deal.

Stadler Rail plans a nearly 1 million-square-foot plant to be built in four phases on a 63-acre site near 5600 West and Interstate 80 in the city’s northwest quadrant. Under the agreement with the city’s Redevelopment Agency, the firm will receive increment financing to support construction of roads, utilities, a test track for rail cars and a rail spur.

The financing is contingent on the company meeting specific annual benchmarks for hiring and construction, and the city can reduce its contribution if goals are not met.

It is the first time the city’s RDA has approved a community reinvestment incentive package for a single property owner. The City Council, acting as the RDA board, approved the incentive unanimously.

“This is a big deal, and this is a long-term commitment we’re making, and I feel comfortable with us having very clear thresholds that were worked out with [Stadler],” Councilwoman and RDA board member Erin Mendenhall said.

The company has 7,500 employees worldwide, and 150 at an existing facility in Salt Lake City who will move to the new plant. The company’s expansion plan envisions 976 employees at the site after 10 years at an average salary of $55,370, which is 9 percent above the current county average.

A city cost-benefit analysis estimates that the project will net the city $15.1 million in property tax and other revenue and $28 million to other taxing entities over 20 years, including $16 million to city schools. The company’s own investment is estimated at $174 million. It broke ground on the project last fall.

Built into the agreement, however, is an understanding that financing for the project could be hijacked by a new state inland port authority created by the Legislature earlier this year. Under SB234, which may see amendments in a special legislative session or next year, lawmakers gave the new agency the right to claim up to 100 percent of area tax revenue within its 34-square-mile jurisdiction, which lies mostly in Salt Lake City’s northwest quadrant.

The agreement with Stadler leaves the company, not the city, at a loss if the state claims the increment. But company CEO Martin Ritter said the deal was worth the risk, saying it “doesn’t help anybody” not to proceed.

“I don’t know what direction the inland port will take,” Ritter said. “At this point, we would just like to enter into an agreement with the city to move forward. It could go worse, and then we just have to figure it out and fight for it, but at this point we just hope that at least it’s not going worse.”

The company, which also has received $10 million in state incentives, got unwanted publicity in 2015 for a trip Utah transit officials, lawmakers and lobbyists made to its Switzerland headquarters, temporarily derailing a Utah Transit Authority bid package and resulting in the resignation of several transit board members.

Last year UTA approved a plan to surplus 37 acres of property it owned near the Clearfield FrontRunner Station in an attempt to advance Clearfield City’s efforts to lure the Stadler plant. But the company chose the Salt Lake City site instead.

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