At the March Town Council meeting, I asked the Town Council to authorize me to sign an interlocal cooperation agreement between the Redevelopment Agency of Salt Lake County and the Town of Alta. They agreed to endorse the town taking the next step in the realization of one of my primary goals as mayor – moving forward toward building a community center in Alta.
A Community Reinvestment Agency (CRA) is established under Utah state code to further projects that a community determines to be in its interest to support. The Agency identifies a project and a project area and a funding source. In our case, the project is to plan and build a community center, the area is our commercial core, and the funding source is taxes that would otherwise go to Salt Lake County and associated taxing authorities.
The CRA provides the opportunity to negotiate with the taxing authorities – the county and the school district are the largest – to lower the amount of taxes that they collect. Instead of the money going to those authorities, they stay in the CRA project area and go to the project. For Alta, that means that instead to sending the large majority of our property taxes to Salt Lake County and the Canyons School District, more of the tax revenues that are being collected would stay in Alta to help create our community center.
It is important to note that the CRA and project do not increase any property owner’s taxes! Rather than increase the taxes that are collected, the CRA allows for them to be redirected to stay in the project area. For example, the county typically determines that it is in its interest to allow as much as 70% of new tax revenues created within the project area to remain in the project area for up to 20 years. And the school district typically follows suit, especially when a project doesn’t bring a lot of new kids into the district.
What does that mean for Alta? For instance, any new development in the commercial core will be assessed by Salt Lake County at a higher amount than before that development occurs. Let’s say that the old assessment for a redeveloped property was y and the new assessment for a new or upgraded property is x. The town would be able to retain about 70% of the taxes on the increment x–y. If the value of the property were to increase from $2 million to $12 million, say, the town could retain the taxes on $10 million of new value, or about $50,000 per year.
That amount is not enough to pay for a community center, of course. We would be raising money from various sources to help pay for the community center. But the retained taxes on a $10 million dollar increment is enough to service debt on $5 million financed by the town.
We have identified the entire commercial core as the project area so that we can apply to retain taxes on any new development in the commercial core. By doing so, the town is not promoting or endorsing development, but we are projecting that it is likely to occur sooner or later and setting up the opportunity to benefit from that development. Property owners in the project area will have a chance to weigh in on our project as we move forward. Mr. Brent Pratt of the Snowpine is enthusiastic about this idea, and we are working to create the CRA now so that the redevelopment of his property can be included. I understand some of the other lodge owners are happy to see us gain from their potential projects as well. There really is no downside to taking advantage of this opportunity, it seems to me, and I very much appreciate the support of our property owners and businesses.
A couple of additional notes:
First, I discussed this idea with then Salt Lake County Mayor Ben McAdams, who strongly encouraged me to proceed. And before she was elected as the new Mayor, I consulted with Jenny Wilson who, while she will probably support fewer CRA project areas than did Mayor McAdams as a matter for County policy, also thought this was an exciting concept for Alta. Ultimately, the Salt Lake County Council and Canyons School District will decide whether to support us and I have already consulted with several of the councilmembers.
Second, a CRA is obligated to contribute to affordable, low income housing. There are several ways of complying with this requirement; my idea for a community center presently includes some housing for essential personnel for the town (examples could include marshals, school teachers, UDOT road crew, snow safety officials, etc), though whether folks in Alta could qualify as low income under the rules remains to be negotiated. In any case, such details will be discussed later and as a member of our community you will have ample opportunity to express your views.
The next step in the process is to refine our project, generate detailed financial projections, and solicit input from the public and property owners. Mr. Blake Thomas, Municipal Economic Development Director for Salt Lake County and our partner in this project, is scheduled to attend the April Town Council meeting to discuss the CRA and the project area with the Town Council. I am very excited about moving forward with this effort and I look forward to your ideas.