SLC negotiates with Fairpark District to avoid unintended city-wide tax increases

The details on municipal services and the development agreement on a district that Utah hopes will become the home of a new Major League Baseball stadium are still yet to be finalized. But, with a state-imposed Dec. 31 deadline to enter a contract with the developer, Salt Lake City is hoping to check the boxes on residents’ wishlists.

Some concerns neighbors on the west side of the city have brought up to their representatives at the Salt Lake City Council are potential unintended consequences of having a separate entity working as an authority to fund development in the area. Could the current structure potentially bring an indirect increase of city-wide taxes?

For example, the city’s Mosquito Abatement District recently proposed a 20% jump in its share of property taxes. That made some residents ask their council members Alejandro Puy and Victoria Petro during a Westside Coalition meeting if independent authorities’ financial structures have any influence in the increase request.

The Inland Port Authority, which has a similar structure to the Utah Fairpark Area Investment and Restoration District (UFAIR) authority, Puy said, doesn’t contribute to the Mosquito Abatement District’s budget despite benefitting from it.

SLC may not have an MLB team yet, but has a deadline if it wants a say in stadium plans

“I want to make sure that when we’re talking about infrastructure, water, sewer and maybe even mosquito abatement (…) are also considered,” Puy said on Tuesday, “to make sure that other neighbors outside the city are not necessarily subsidizing (those), on top of the reinvestment of taxes. I want to ensure that we potentially don’t have to raise taxes on water for every citizen in the city because of this project.” 

Salt Lake City’s attorney Katie Lewis, who presented an update on the potential development agreement to the council, said that while public investment is not something the city has the authority to negotiate, “it is very important for Salt Lake City to be thinking about how this district serves the city’s public goals, because there is a public investment attached to it,” she said. 

The city should also be taking steps to ensure that the development agreement creates a process for infrastructure funding and development, Lewis said. 

The district may bring growth and the city has to look at its budget to determine how to serve more people when the extra property tax revenue from the district is not going to the general fund. However, HB562, which allowed the creation of the UFAIR District, provides a mechanism for Salt Lake City to negotiate some of that tax money back for municipal services.

Starting in January, the UFAIR district will retain up to 75% of the area’s tax increment, senior city attorney Allison Parks told the council. And, Salt Lake City will retain the base property tax value, plus 25% of the tax growth. However, the city is negotiating with the district to reach an agreement for more funds.

“The theory being that the additional percentage, on top of that, will grow and increase as the district grows and increases, and as demand for services grows and increases,” Parks said.

A 40-year agreement

The Larry H. Miller Company, which is developing the district and bidding for a new professional baseball team, is voluntarily working with Salt Lake City to reach an agreement that may include public benefit, and “a process for continued city review related to public infrastructure that includes sewer, culinary water, stormwater and roads,” Lewis said on Tuesday. 

Salt Lake City is negotiating a 40-year agreement with the Larry H. Miller Company, she added, prioritizing two public benefits on the development of the 95-acre property. 

The first is that 10% of the private land share is dedicated to open space. Whether that space is publicly or privately owned and managed, it should be open to the public. The second is a commitment to inclusivity and nondiscrimination. 

Both the city and the Larry H. Miller Company are also committed to developing “significant” residential units in the area, which are to be accessible to different income types, family sizes, and the district’s workforce.

The Larry H. Miller Company could also receive other benefits out of this partnership. Since many of the plans include views or uses of the Jordan River, Salt Lake City’s Department of Public Utilities created an enhanced table of uses from the shoreline of the river to the first 100 feet of property. 

If the development agreement is approved, there may also be other concessions regarding the airport flight path protection overlay, Lewis said.

“This property is fairly close to the Salt Lake City airport, and we have an ordinance for safety reasons that ensures that certain types of development are not built in order to protect our flight paths,” she said. “We are in negotiation with the Larry H. Miller group related to how what would happen if the FAA applies certain safety rules to the development and how we navigate building heights related to what the FAA wants and with our flight paths.”

The goal is to have a final agreement the council can officially consider during its Dec. 10 meeting, Lewis said.