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Controversial Draper transit station project hits snag in S.L. County

Published: Tuesday, Dec. 11 2012 5:20 p.m. MST

SALT LAKE CITY — A controversial multimillion dollar commercial development project around a commuter rail station in Draper hit a snag Tuesday at the Salt Lake County Council.

Council members want more time to study the plan before deciding to take part in it, despite pleas from Draper officials that the developer will lose potential major tenants if the council doesn't get on board by the end of the year.

"Right now we're in limbo," said Draper Mayor Darrell Smith.

Councilman Jim Bradley compared the city's pitch to that of a used car salesman who says if you don't buy today, the car won't be here tomorrow.

"I think we're moving very, very fast," he said. "It think it's very hard for me to say it's a good deal."

Draper wants the county to participate in a 144-acre transit-oriented development at a new FrontRunner stop at 13000 South just west of I-15. The city has already zoned the site for office buildings of unlimited height and unlimited density along with retail space and housing.

"We hope someone will build a 100-story building," said Draper City Councilman Troy Walker, who also serves on the Utah Transit Authority board.

Global online auction marketer eBay is currently expanding its facility there and the UTA is building a parking structure.

Draper estimates the current taxable value on the property, which is mostly lowly taxed greenbelt, would rise from $6 million to $1.2 billion as the project develops over 20 years. 

The city wants the county to help subsidize the construction of water, sewer and power lines and future parking structures with a portion of the property tax it would collect as the project develops over the next 20 years. The county's maximum investment over that period is estimated to be $25.1 million.

Draper officials contend it would not take anything out of city coffers. They say the county stands to reap more tax revenue by investing in further development than just the current eBay expansion and its large parking lot, which generates little tax money.

"They can get 100 percent of the tax revenue from a parking lot or 25 percent of the revenue from a building. Our position is that the revenue from 25 percent of the building is more than 100 percent of the parking lot," said Draper City Councilman Jeff Stenquist.

Draper has already won the support of several other taxing entities, including the Canyons School District.

The County Council wants its debt review and technical review committees to study the proposal before making a decision

"I'm troubled that we're asking middle class families of Salt Lake County, small businesses, all property owners to subsidize a commercial project of this nature when already you have developers that are profiting as a result of their real estate," said County Councilman Richard Snelgrove.

The project drew controversy last year after the Office of the Legislative Auditor found real estate developer and then-UTA board member Terry Diehl had a conflict of interest when he profited from the sale of the land for the Draper FrontRunner station.

Jeff Vitek of California-based Foursquare Properties, which built Jordan Landing in West Jordan, now holds the development rights.

Diehl, who resigned from the UTA board in May 2011, was outside the County Council's meeting room Tuesday but did not go inside. Salt Lake County and Draper officials said to the best of their knowledge Diehl is not involved in the project.

The Utah Taxpayers Association opposes the taxing plan for commercial development projects, arguing it would take dollars out of public school classrooms.

"If this is going to happen regardless, then it just can't be justified," said Royce Van Tassell, association vice president. "We just haven't seen any evidence that this transaction isn't going to happen in the greater community without a subsidy."

E-mail: romboy@desnews.com

Twitter: dennisromboy

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