The Alpine School District recently agreed to participate in a Community Development Area in Pleasant Grove. The Alpine Board of Education agreed that a proposed hotel and convention center could keep 85 percent of the new property taxes it would generate for the school district.

Alpine will still see an increase during those years from $150 a year in property tax revenue generated at the site to $77,400 a year.

Billings told the Provo school board that the new office tower would improve the city's tax base and help revitalize downtown. He also said the financial institution that would occupy much of the first-floor space also would likely leave Provo if the tower isn't built.

The bank wasn't named during Tuesday's meeting, but the Deseret Morning News has reported that it is Zions Bank.

"This tenant has been trying for years to get a new facility in Utah County," Billings said. "They're being courted and they won't be in Provo if they don't get this one to click. They'll probably be going to a facility on the freeway, and it will be wonderful, but it would have none of the upside momentum for Provo schoolchildren and downtown. We're probably at that juncture where they'll do something else."

About 60 percent of Provo property taxes go to the school district. The rest goes to the city, Utah County and the Central Utah Water Conservancy District. They also are being asked to provide the project with what is called tax-increment financing.

Provo would give back 96 percent of new tax revenue. Billings and Gunter will ask Utah County to cede 83 percent and seek 100 percent from the water district.

In all, the school district, city, county and water district would provide $3.2 million to PEG Development.

Past redevelopments cost the district about $650,000 a year, district finance director Kerry Smith said.

Gunter said the office tower would have 150,000 square feet and include no residential space. About 10,000 square feet of the first floor would be reserved for retail space, about the amount that is there now.

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