SLC would lose seats on inland port board, so why are some calling this bill a win?

Legislation would give Salt Lake City more control of property taxes generated from the port and help pay for environmental and traffic mitigation.

An anticipated — and, in some cases, dreaded — bill stripping Salt Lake City of its representation on the Utah Inland Port Authority board has finally been unveiled.

The elected officials who collaborated on it, however, said the capital city is also getting some big wins in exchange.

HB443 shrinks the port’s governing body from 11 members to five, with a majority appointed by the Legislature. Salt Lake City would lose its two voting seats, which are appointed by the City Council and mayor, even though the port occupies around a fifth of the city’s land area.

In return, the city would get something it has been vying for since the port’s inception: greater control over property tax revenue generated by the venture.

“Hopefully this is the start of a new beginning and everyone is done fighting,” Rep. Mike Schultz, R-Hooper, the bill’s sponsor, said Monday.

The original legislation creating the Inland Port Authority siphons away 75% of Salt Lake City’s property tax dollars collected within the port site, which has long been a sore spot for city officials. Salt Lake City and the state currently are locked in a lawsuit that alleges the port authority is unconstitutional, due partly to the taxation issue. That case awaits a decision from the Utah Supreme Court.

Under HB443, the port and city instead would enter into a contract. The city would turn over 65% of the property tax revenue coming from the port, a figure that would shrink over time. The port would be required to invest significant chunks of that money back into environmental cleanup, traffic mitigation and attracting high-paying jobs.

“It’s mainly meant to be a big win for the west side of [Interstate] 15,” Schultz said, “and the surrounding communities.”

The lawmaker added that he worked closely with Mayor Erin Mendenhall and the City Council’s two west-side representatives, newcomers Victoria Petro-Eschler and Alejandro Puy.

“I have not given up, but the inland port is here,” said Puy, who represents District 2 neighborhoods like Glendale and Poplar Grove. “It’s a big chunk of my district, and I have a lot of neighbors in that area who will be disproportionately affected. This bill will address those issues.”

The council member added that he would still like city representation on the port authority board.

“Unfortunately,” Puy said, “this isn’t a place where we could agree.”

Petro-Eschler, who represents District 1 neighborhoods such as Fairpark and Rose Park, said she was grateful Schultz was willing to work with city leaders on the measure. But she called the agreement “bittersweet.”

“While I’m so thankful for the resources flowing our way,” the council member said, “the vote was taken away. It feels to me like a historic disenfranchisement.”

Protecting west-siders ‘regardless of political climate’

Beyond changing the board, HB443 charges the inland port authority with additional responsibilities, including “aggressively” pursuing “world-class” businesses and pursuing “land remediation and development opportunities” for public lands.

The measure would provide tax incentives for high-paying jobs at the port, defined as 130% of the average wages in Salt Lake County, as well as incentives for developers to invest between $100 million and $1 billion in the port.

“It gives some parameters, so it’s more focused on good-quality jobs,” Schultz said, saying the idea was to lure more manufacturing. “There are a million distribution warehouses on the west side out there, and those are not great-paying jobs.”

The port would also have to work with Salt Lake City and other municipalities in creating “minimum mitigation and environmental standards” in order to use property tax funding.

And Salt Lake City would have more assurances and control over those taxes. Under the bill, the city would turn over 40% of property taxes from the port starting in 2023, which would drop by 2% every year. In 2030, it dips and stays at 10% for seven years, and eventually phases out to zero.

The city would hand over an additional 25% of the port’s property tax revenue also starting in 2023, for a period of 25 years with the option to renew for another 15. The port authority would have to spend 40% of those funds on environmental projects within the port, while another 40% would go to environmental and traffic studies or improvements in and around the port. The remaining 20% of those funds would go to “economic development” activities in the port.

“I’m enthusiastic that this legislation helps us achieve the greenest and cleanest inland port possible,” Mendenhall said Monday, “and provides a path toward putting city taxpayer money to use right back in our west-side communities adjacent to this development, where it belongs.”

While the legislation could resolve legal spats between the city and the state, Schultz and city leaders agree it won’t make the current Supreme Court case moot. They said they want to see a decision on the matter.

“The loss of our voting seats on the authority board,” Mendenhall said, “underscores the need for the court to rule on the pending case.”

Still, the mayor’s statements about HB443 mark a significant shift in tone. Last month, after hearing rumbles the city might lose its board seats, Mendenhall called the proposal “retaliatory” and “illogical.” She also vowed that the city would “fight” to keep its representation.

Now, the mayor says she looks forward “to working with the port on a contract,” adding that it gives the city permanent environmental and financial protections at the port, “regardless of political climate.”

Schultz acknowledged the Legislature adopts port policies on a yearly basis that create uncertainties for the capital city.

“Putting things in a contract also helps them with not having the seat on the board,” Schultz said. “It gives them a voice.”

Running the port ‘like a business’ or ‘arrogant policymaking?’

Along with Salt Lake City, West Valley City, Magna and Salt Lake County would also lose their seats on the port authority board.

(A spokesperson for county Mayor Jenny Wilson said she is still assessing the bill’s impacts to residents.)

Schultz, however, said shrinking the board is necessary.

“The inland port needs to run more like a business,” the lawmaker said. “That’s the whole point behind it — it is a business.”

If HB443 becomes law, the Legislature would appoint three board members — it currently appoints two — who have “relevant business expertise.”

The governor would continue to appoint two members as well, with a new restriction that they cannot be elected officials. The members appointed by the Legislature do not appear to have that caveat.

“It’s more heavy-handed, arrogant policymaking by a Legislature that’s out of control,” said Deeda Seed with the Stop the Polluting Port Coalition, noting that the proposed makeup essentially would give state lawmakers majority control over the port.

A Salt Lake City Council member still would be able to serve on the board but in a nonvoting capacity. The board would appoint two other nonvoting members with experience in transportation and logistics.

“Salt Lake City still has land use authority over the inland port,” Schultz said. “... I don’t know that they necessarily need a voting member.”

Port opponents worry the city residents will get steamrolled as the state builds big, impactful projects like an intermodal hub moving cargo from trains to trucks.

“The essential problem here,” Seed said, “is this board is becoming even less representative of the taxpayers that are footing the bill for inland port development. And that’s a huge concern.”