Taxpayers soon may help build the latest in a series of office buildings in the Fort Union area, despite concerns by county auditors.
Salt Lake County commissioners decided Wednesday to create a redevelopment project on less than 10 acres adjoining office buildings built by Terra Industries. The project, near 1300 East and Fort Union Boulevard, will allow Terra to acquire the land, which commissioners say is blighted.A series of four-plex apartments, known as Monticello Village, is on the land, as are some vacant houses. County Redevelopment Director Clayne Ricks said the apartments create a traffic hazard. They are on a narrow strip, and tenants have to exit at an odd angle onto busy Fort Union Boulevard.
Officials from the auditor's office say they are concerned there is little evidence that Terra needs taxpayer help to build what will be the latest in a series of glass-covered office buildings it owns. The developer did not use county money to build any of the other buildings, including one currently under construction.
"Where is the justification for taking money from school districts' pockets and from the county's pockets?" said County Budget Director Nelson G. Williams. "Nobody has taken the time to verify, to check sources, to find out if it's really true or not."
But Tom Lloyd, president of Terra, said he needs help to buy the apartments. He said the company could not finance the deal any other way.
"The price the owner is asking is not out of line, but it's out of line for what I want to do with it," he said.
He said he and county officials have not yet negotiated how much money Terra will need. County officials said they also are likely to provide sidwalks, curbs and gutters for the facility.
Lloyd also said the county and school districts will be the benefactors once the office building is complete and the taxpayer subsidy has been paid back.
"The real issue is, would I do it (build the project) or wouldn't I do it (without help from the county)," Lloyd said. "In this specific instance, the cost is prohibitive. The land would stay as it is forever."
By making the area a redevelopment project, the county will have the authority to buy the land and sell it to the developer at a reduced price. The difference gradually would be recovered through the taxes the developer pays on the new building.
The county and school districts still will be free to use the taxes they now collect on the land. Only the taxes generated from the new building will be used to pay the debt. Once the debt is paid, the new taxes will go to the county and school districts.
"From my perspective, when you run the numbers it's an easy call for the county," Lloyd said.
Williams said Lloyd's claims may be true. His concern is that the county is not scrutinizing Terra the way a private lending institution would. He is concerned about the money the county will pay up front, and he is concerned the new building may not produce taxes quickly enough to retire the debt.
County commissioners discounted concerns from the auditor's office. Commissioner Tom Shimizu noted that the county has only one other redevelopment project - in downtown Magna.
"We've been very cautious," he said.
Commission Chairman Bart Barker said he does not want the Fort Union area to remain blighted.