Residents speak against Salt Lake City proposal to offer tax reimbursements to developer in inland port area

(Trent Nelson | The Salt Lake Tribune) Deeda Seed speaks in opposition as the Salt Lake City Council takes public comment on a proposal to grant tax subsidies to development in the city's northwest side, on Tuesday Aug. 20, 2019.

In a packed meeting Tuesday, more than 50 people urged the Salt Lake City Council, acting as the city’s redevelopment agency, to reject a proposal that would grant up to $28 million in tax increment reimbursement to a developer seeking to build a 3,000 acre industrial development in the city’s northwest side.

Phase one of the project, located in the inland port boundaries on about 378 acres directly north of the North Temple Landfill, could create up to 2,900 jobs and is expected to generate 6 million square feet of light industrial space across an estimated 10 warehouses.

But opponents estimate, based on the plans provided by Northwest Quadrant LLC, that the development will also bring increased traffic emissions, dirtying the air by adding upward of 2,000 new truck trips and 3,300 car trips to the Interstate 80 corridor.

They worry, too, about the impact the warehouses could have on wildlife habitat, stormwater runoff and noise and light pollution in the area.

“I know that I, for one, will work tirelessly against any City Council member who approves this resolution that subsidizes development of operations in such an environmentally fragile landscape such as the Great Salt Lake that is of such importance to migratory birds,” resident Monica Hilding pledged during a more than two-hour long public comment period on Tuesday.

Over the next 20 years, some 54% of new tax increment — a way to subsidize companies by refunding a portion of their taxes once property tax values increase after development — will go back to the developer, while 25% will go to the city’s general fund. An estimated 7% will go each to affordable housing and to RDA administrative costs.

Annual property tax value on the land is estimated at $724 a year, but could increase to around $4.2 million after the development of phase one.

Members of the public urged the redevelopment agency to pump the brakes on the financing agreement until they have more information about possible environmental threats. Members of the agency asked several questions of the developer on Tuesday, but ultimately did not take action on the financial agreement.

A vote is expected in the coming weeks.

Opponents see this development as the next step in efforts to build out the inland port — a massive distribution hub development planned for the area near the Great Salt Lake that has faced a near constant barrage of opposition in recent months.

(Leah Hogsten | The Salt Lake Tribune) Deeda Seed with the Center for Biological Diversity discusses various locations of the proposed inland port, Tuesday, April 2, 2019. Last year, Utah lawmakers took control of a massive portion of land in Salt Lake CityÕs northwest area in an effort to create a distribution hub on the cityÕs northwest side, sparking outrage among residents.

City officials note that they started the process with the developer before the land in the inland port area was taken over by the state and maintain jurisdiction over the area because of those agreements. They also point out that they are limited in their ability to regulate the project beyond the zoning restrictions in place and a buffer already created to protect the wetlands.

If the redevelopment agency did vote against the agreement, it’s unclear what would happen next. But council members seemed worried about the possibility that control of the land could be turned over to the Inland Port Authority Board, which is tasked with overseeing the development of largely private land in the northwest quadrant area.

RDA board member and Salt Lake City Council Chairman Charlie Luke said those kinds of uncertainties put the panel in an “uncomfortable position” when considering the financial agreement, but promised he would continue seeking the information necessary to make the best public policy decision moving forward.

“I want everyone to understand that this is not us trying to slip something through or trying to be sneaky,” he said. “We are trying to do what is going to be in the long-term interest of Salt Lake City.”

Two people spoke in favor of the tax increment proposal during the public comment period on Tuesday: Zach Hartman, who has been involved with the development; and Shawn Eaton, who helped design the warehouses included in the project.

(Trent Nelson | The Salt Lake Tribune) Deeda Seed speaks in opposition as the Salt Lake City Council takes public comment on a proposal to grant tax subsidies to development in the city's northwest side, on Tuesday Aug. 20, 2019.

Eaton noted that the architects had worked to limit the environmental impact of buildings, which had been designed “to a much higher standard,” with skylights to promote natural light and require less electricity, roofs that reflect heat to resist internal temperature changes and solar panels that provide built-in energy production.

The city has also made an effort to mitigate harmful environmental impacts for developments within the port project boundaries, including through rules passed last year prohibiting heavy industrial uses that could have significant air quality impacts in favor of light industry. Regulations in the inland port area also require companies proposing more impactful uses, like railroad freight terminals or recycling process centers, to complete an environmental mitigation plan.

Salt Lake City has long planned for the land in the northwest quadrant to become an inland port and has zoned much of the area for light manufacturing. But the plan to build the distribution hub gained more attention — and began to garner loud opposition — after the state took over the area through legislation in 2018.

Since then, the project has spawned several protests, some of which culminated in arrests. The port also faces a lawsuit filed by Salt Lake City Mayor Jackie Biskupski, who contends that its creation was an unconstitutional usurpation of city taxing and land use authority.

Community members point to the ongoing nature of that litigation as another reason to press pause on the tax increment agreement.

“It is unwise to move forward with specific, large scale and impactful development when there is litigation pending to resolve issues of jurisdiction, and when comprehensive planning for development in the northwest quadrant/proposed port area hasn’t been completed,” members of the anti-port group Stop the Polluting Port wrote in a letter sent to the redevelopment agency on Monday.

The inland port board, which hasn’t met since its June meeting was disrupted by protests, is expected to have a draft business plan outlining how the area might develop by early next year.

City documents state that the developer’s proposal was reviewed by both the RDA Finance Committee and an independent third party that looked at both whether the level of investment and repayment of tax increment was “necessary and appropriate” and at what public benefits might come as a result.

The outside reviewer determined reimbursement was necessary in this case because of “significant” and “extraordinary infrastructure improvements” required in the northwest quadrant area, “including soil remediation, access to utilities and renewable energy investments.”

Without the use of tax increment, the area would remain “underutilized and vacant,” city documents conclude.

The developer is requesting reimbursement for both improvements to the larger area, like road work and utilities, as well as for project-specific improvements, including street lighting and site preparation relating to the high water table in the area, according to city documents.

Several residents told the redevelopment agency that in addition to their environmental concerns, they also opposed the use of tax dollars they felt should be invested back into the community rather than used to subsidize a developer.

“I have lived in the city for seven decades,” resident Kathy Wilson said during public comment. “I have been a business owner and taxpayer for 50 years and have collected tax dollars for Salt Lake City. I have never received any kind of a tax benefit and when I see a questionable development being guaranteed millions and millions of dollars in tax benefits that will actually be detrimental to the city of Salt Lake and all the citizens who live here and pay taxes — it’s outrageous.”