VINEYARD, Utah County — The Alpine School District and Utah Taxpayers Association don't want to see public money used to fund part of the $900 million-plus makeover planned for the former Geneva Steel property.
And they may take legal action to keep it from happening.
"This would have a negative impact on taxpayers in Alpine School District," said Rhonda Bromley, district spokeswoman. "We are very much opposed to it."
In January, the Alpine School District was on the losing end of a vote among taxing entities that would be affected by subsidizing remediation and development of the 1,700-acre property now owned by Anderson Development Inc.
The developer plans to build a mix of residential, office and industrial uses on the now mostly vacant property in Vineyard between I-15 and Utah Lake. The cost to clean up and add infrastructure to the property is estimated at $325 million.
That's roughly the amount the developer is hoping to receive through the Vineyard Redevelopment Agency. Through an RDA, local governments can step in and use taxpayer money to subsidize projects that are expected to spur future development and boost tax revenue.
Royce Van Tassell, vice president of the Utah Taxpayers Association, said that figure would make it the highest-priced RDA project in Utah's history.
If the project is approved next week by the town RDA, homeowners living within the Alpine School District boundaries would see a property tax increase of between $14 and $17 per year — based on the average home price of $230,000 — for 35 years.
School district officials also are worried about the 400-plus acres of residential construction in Anderson Development's plans. Property taxes on the homes, Bromley says, would not pay for the full cost of educating the number of students such growth would bring.
In addition, the project is using tax calculations from 2006, before construction of a Rocky Mountain Power plant and a FedEx shipping facility in the area — a combined $140 million investment. That turning back of the clock was made legal by SB197, sponsored by Sen. Curt Bramble, R-Provo, and approved by the Utah Legislature in 2010.
"A lot of things have changed in five years," Bromley said. "What things were worth in 2006 compared to today certainly are different."
According to Vineyard documents, $227 million in tax dollars that would have gone to the Alpine School District will be shifted to the redevelopment agency project.
Van Tassell says the $325 million requested for the development is about $175 million too high.
The association supports roughly $150 million in public funds being used for the project to cover work that needs to be done to the property to make it developable. Beyond that, the developer is just being greedy, Van Tassell says.
"This is one of the most egregious abuses of the tax code the Taxpayers Association has ever seen," he said.
Van Tassell also has raised concerns about the vote cast by Larry Newton during the Jan. 18 Taxing Entity Committee meeting.
Newton, as school finance director for the state Board of Education, voted for the project — going against the wishes of the Alpine School District.
Members of the state Board of Education have questioned Newton's vote, saying they had not been informed about the project. Others have asked whether Newton was even authorized to cast a vote for the board.
"At a minimum, (Newton) can't say he represented the will of the board because they had never been consulted," Van Tassell said, adding that such action could invalidate the vote and become the basis of a lawsuit to stop the project.
Newton said Van Tassell is half right: The state Board of Education was not consulted about the project prior to the vote. However, Newton said, as the board's Taxing Entity Committee representative since 1993, he had full authority to make the vote.
And he voted in favor of the RDA with the support of Superintendent Larry Shumway.
"I would never vote on something of this magnitude without some guidance from my bosses," he said. "I was given my marching orders."
Newton said negotiations about the project went on for nearly 18 months. The latest proposal, he said, "was the best we could do."
Among negotiated changes that Newton says are favorable to the Alpine School District include a reduction in the length of the RDA from 40 years to 35 years and "mitigation payments" to the school district totaling $12.2 million to help offset the loss in property tax collection.
"We protected the school district the best we can," said Newton, who has negotiated and voted on more than 130 such projects over the years.
Michael Hutchings, co-owner of Anderson Development, praised Newton for exercising his independence and not using his vote as a "rubber stamp of the Alpine School District."
"That's because there's real merit to this project," Hutchings said.
The Geneva urban renewal project calls for 11.1 million square feet of commercial development and enough residential space to build more than 7,500 homes. It also includes three lake activity areas, several new roads and a FrontRunner commuter-rail stop.
Town officials have said the development is projected to raise property values by as much as four times the amount they were when Geneva Steel was in operation. It's also expected to expand the town's tax base by attracting new businesses.
The Alpine School District, Hutchings says, also will benefit from that development. Studies commissioned by the developers indicate revenue to the school will be twice as much with the project in place is it would be without it.
That only happens, though, with help from the RDA. The developers already plan to invest in the neighborhood of $600 million in the project. The extra $325 million is needed, Hutchings says, to develop the site properly.
"We'd probably have to fence off a good portion of the property (without the extra funds)," he said. "I don't think anyone wants that."
Public hearing7 comments on this story
The Vineyard Redevelopment Agency will hold a public hearing about the Geneva urban renewal project at 7 p.m. Wednesday at Town Hall, 240 E. Gammon Road.
Contributing: Richard Piatt