Lawmakers targeting cities' RDAs

Local battles over how cities reinvent themselves are spilling onto the floor of the Legislature.

At the core of the debate is the use and abuse of redevelopment agencies (RDAs) to lure developers into cities with tax incentives. At least three bills will try to delineate appropriate RDA use this session with two measures aiming to rein in the use of RDAs and another pushing to broaden their purview.

Originally intended to cure blighted areas, an RDA allows cities to divert property taxes from new development back into city rejuvenation projects. That process, however, has come under fire by legislators and educators because it denies school districts its 50 to 60 percent cut of property taxes.

A coalition of school board leaders and the Utah Taxpayer's Association say the Legislature needs to step in this year because cities are improperly diverting tax dollars from school districts.

"Cities have found a loophole that they've exploited beyond abuse," said Sen. Curt Bramble, R-Provo. "It has evolved far beyond its original intent."

To curb that expanding use, Bramble is sponsoring a bill to prohibit cities from using RDA funds to develop local retail, soccer stadiums or theaters. Rep. John Dougall will also be pushing a measure to allow school districts to opt out of RDA agreements to retain their portion of property tax revenues.

"We just don't think that the development of communities needs to take place on the backs of school children," said Gary Cameron, an associate executive director for the Utah School Boards Association.

But Sandy Mayor Tom Dolan said both measures would effectively kill RDAs, leaving cities with limited economic development tools. Dolan is working to pass legislation that would give cities more power to use RDAs to recruit retail and sales tax dollars.

The proposed bill, sponsored by Sen. Al Mansell, R-Salt Lake, would broaden the use of RDAs to include gravel pits and land within a half mile of TRAX stops.

"In general, the RDAs have benefited cities and their citizens more than they've damaged them," Mansell said.

Bramble, however, said the proposal is a prime example of how cities are manipulating RDA rules to include developments that don't need city tax subsidies. At the Sandy gravel pit, for example, city leaders want to include a Boyer big-box project in an RDA even though Boyer has declined any RDA funds. The property tax would instead go toward redeveloping a rundown retail area nearby.

"Putting retail and big-box stores in RDAs is just municipalities taking advantage of the carrot that's being dangled in front of them," said Sandy resident Robyn Bagley.