Salt Lake City and a local developer will go to the negotiating table to clear up a $2 million difference of opinion in a bid to build a 20-story high-rise on ailing Block 57 in downtown Salt Lake City.

Roger Boyer, a Salt Lake developer, wants a $4.3 million tax increment break to build the 350,000-square-foot, $40 million office and retail tower at 200 S. Main on the site of the old J.C. Penney building.But at a Salt Lake Redevelopment Agency meeting held Friday to brief city council members, RDA Executive Director Michael Chitwood offered Boyer only $500,000.

Council members, who double as RDA board members, objected to the $4.3 million figure, which amounts to a 100 percent rebate of property taxes on the sight over the next 23 years. Twenty-five percent is the largest previous subsidy the RDA has made, Chitwood said.

A clearly disappointed Boyer immediately lowered his request to $2.5 million and told Chitwood he wouldn't have wasted his time had he known the city's offer would be so low.

But the two agreed to meet Aug. 29, two days before Boyer's option to buy the proposed site from Morris Pacific Associates runs out, to negotiate over the $2 million difference and bargain over other issues.

Boyer is touting the project as the stimulus to resuscitate Block 57, bounded by State, Main, First South and Second South streets and suffering from businesses moving out and from decay.

But to buy the expensive land and justify building in a poor office market, Boyer said he needed a 100 percent return of his tax increment, or the difference in property taxes for the present and future value of the property.

Council members recognized the project Friday as the lever to potentially lift the block and boost growth throughout the city's business district. But many objected to the 100 percent subsidy of the project.

"What (you're) really asking taxpayers and members of the business community to do is to subsidize that overpriced property . . . and I don't think it's fair for the citizens to have to do that," Councilman Alan Hardman said.

Councilwoman Florence Bittner, the RDA chairwoman, said a 100 percent commitment might hamstring the RDA, prohibiting it from committing the $8 million it will raise this year on other worthy projects.

Chitwood told the RDA the agency would retire all bonded indebtedness in June 1989, making the $8 million free and unencumbered.

Council Chairman Tom Godfrey called Block 57 the city's "bank" and said the subsidy sought by Boyer would be a bad precedent. "If we start giving (Block 57 land) away, we lose control of it," he said.

Boyer argued that Block 57 is in such decay that any project would require a subsidy and with a successful initial project future Block 57 programs could be done without RDA support.

Councilwoman Roselyn Kirk urged the council to support the proposal more, stressing that the office tower would "get things moving" on the block. Kirk urged the council to go further than the $500,000 Chitwood offered.

Chitwood said he would stick to RDA policy in negotiating over the tax increment with Boyer. RDA will offer tax increments to developers to cover portions of the development that "are to the public good," but no more, Chitwood said.

That prompted Councilman Willie Stoler to suggest Chitwood search for creative ways to justify public good in a structure.

Chitwood and Boyer also will bargain over 390 parking stalls Boyer wants the city to build near the tower. Boyer wants then to lease the stalls from the city for $50 a month, which is below market value.

Council members said the leasing fee should be adjusted to market rates.

The council also considered at the meeting the formation of a parking authority, which would have taxing authority to build parking space on Block 57.

"Then the subsidy would be in public ownership instead of a gift to a developer," Bittner said.

The city's proposed Block 57 master plan, stalled by a lawsuit filed by a Block 57 landowner, recommends parking be underground. That costs $6,000 to $8,000 per stall compared to $1,500 to $5,000 per stall above ground.