Salt Lake City Council approves $28 million tax reimbursement for developer in inland port boundaries

(Rick Egan | The Salt Lake Tribune) Salt Lake City Council Erin Mendenhall explains her vote to approve 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, Tuesday, Aug. 27, 2019.

The Salt Lake City Council, acting as the redevelopment agency, voted unanimously Tuesday to approve a $28 million tax increment reimbursement to a developer seeking to build a 3,000-acre industrial site in the city’s northwest side.

The decision — which came after more than an hour of pleading from residents for a different outcome — was one both Councilman Charlie Luke and Councilman Chris Wharton characterized as among “the hardest” of their political careers and that others recognized may have political consequences in the future.

But council members told residents they felt it was necessary to maintain their seat at the table when it comes to the development. If they voted against the agreement, control of the development’s 378 acres, located directly north of the North Temple Landfill, could be turned over to the state.

“Voting against [the agreement] might make us feel better for a moment, but it would be devastating for the city and the environment,” City Councilwoman Erin Mendenhall, who is running for mayor, said before the vote. “I refuse to step aside and make it even easier for the state Legislature and the Inland Port Authority to take full control of this area at the expense of our city’s needs and priorities. It would be unilateral surrender and in good conscience, I cannot do it.”

Phase one of this project 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, according to plans provided by Northwest Quadrant LLC.

Opponents see the 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.

Though the land for this development is located within the inland port boundaries, the city currently maintains jurisdiction over the land and control over the taxing and land-use authority because of agreements in place between the developer and the municipality before the state took control of the port area.

Voting against the tax increment, said redevelopment agency Chairwoman Amy Fowler as she held back tears before the vote, “does one thing and one thing only: It removes our seat from the table.”

But the redevelopment agency’s decision Tuesday went against the stated desires of the majority of the public who addressed them during an emotional hour-long public comment period.

More than 30 residents implored council members to require an environmental impact and health assessment as part of the project and raised concerns about increased truck and traffic emissions as a result of the development, as well as the impact warehouses could have on wildlife habitat, stormwater runoff and noise and light pollution in the area.

“We are a human species in a speeding car headed for a suicide cliff,” Jill Merritt told the council. “And your choice today may help nothing. We may be going off that cliff no matter what you do. But if you’re able, while the privileged of the world are tapping the gas in this car, you can have the satisfaction of tapping the brake.”

The council’s decision to vote in favor of the tax increment was, for many, seen as a repudiation of the body’s stated values around sustainability, improving air quality and stemming the impacts of climate change.

“If the council votes to approve this giveaway, it will demonstrate how little in fact the council takes public sentiment into account,” Heather Dove, president of the Great Salt Lake Audubon, told members. “The lengthy words of thanks will ring hollow and the City Council will prove themselves as tone deaf and untrustworthy as our Legislature.”

Nearly 60 people came to last week’s hearing on the issue, and all but two spoke against the tax increment.

Luke, a redevelopment agency board member who serves as chairman of the City Council and is up for reelection this year, acknowledged residents’ concerns and vowed to keep fighting for their cause.

“We do hear you,” he said. “You may not think that we’re listening; you may think that because we’re not voting the way you want us to vote that this doesn’t have an impact, it absolutely does. And my commitment to all of you is that I will continue to work to make this better. I will continue to work with developers to add some of the concessions that you brought up.”

Every council member but James Rogers, who serves on the Inland Port Authority Board, offered residents at the redevelopment agency an explanation Tuesday of their support for the tax increment agreement.

Dan Dugan, Luke’s opponent, wasted no time criticizing Luke’s vote on Tuesday, which he said was “subsidizing pollution.”

“If you oppose the port and if you oppose giving $28 million in city tax subsidies to private developers to build something that three out of four city residents oppose, then hold your council representative accountable at the polls in November,” he said in a news release.

While the majority of people spoke against the tax increment, several spoke in favor of the redevelopment agency’s move Tuesday, acknowledging that the body’s hands were tied and professing their belief that environmental concerns had been baked into the proposal.

“This project will be the most sustainable commercial building project in Utah,” Noelle Christensen said during public comment. “The project was negotiated by the city and made sure environmental protections were in place. The opposition is basically saying that they want to eliminate all the environmental protections and trust the state to do it right. I would rather put my trust in the city than in the state.”

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.”

Annual property tax value on the land in question is estimated at $724 a year but could increase to around $4.2 million after the development of phase one. Over the next 20 years, some 54% of new tax increment 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.