After three years of planning and working out details of who will pay for what, city officials and developers broke ground at the Utah Valley Business Park in American Fork Wednesday.
"This is really an exciting day for myself, the city council and the citizens of American Fork," said Mayor Kent Evans. "This has been a long time coming."Problems in developing the 92-acre park, at the Fifth East I-15 interchange in American Fork, began when the city became concerned that no vehicle was available to finance the development of utilities and roads at the business park.
With the help of the city's Redevelopment Agency, a Special Improvement District was formed earlier this spring to finance initial improvements such as road construction, sewer and water lines and a drainage system for the industrial park.
They will do so through tax increment financing. This type of financing is based on changes in the tax base. Before development begins, taxes are frozen at the original property value, which is usually low since it is in an area specified for redevelopment. Property owners continue to pay taxes as the property valuation goes up, but the county still gets only the original low amount. The difference between the two is the amount used to pay off the tax increment bonds.
The theory behind tax increment financing is that the county, school districts and cities are not hurt by development. It also gives businesses an incentive to build in a blighted area.
The Utah Valley Business Park is owned by the North Valley Investment Group. The Woodbury Corp., part of that group, is the project developer.
"We are pleased to work with the Woodbury Corporation," Evans said. "We are different here because most cities own the land and lease it to businesses, but American Fork City is fortunate to have a group with its own property that is willing to develop it.
"Three years ago we started discussing the idea. There is much water under the bridge now, but not much turbulence. We are pleased with that."
According to Lonnie Bowers, president of the American Fork Chamber of Commerce, "There have been some concerns about utilities, but the city council worked it out and we are very pleased with it."
Wallace Woodbury, chairman of the board of Woodbury Corp., said no city subsidy is involved in financing the business park. "They have only acted as an implementing agency to make it possible through tax increment financing."
Phase one of the business park includes construction of the infrastructure on 60 of the 92 acres and is estimated to cost more than $1.5 million. A commercial section will be built along Fifth East and a business-industrial section will extend to 11th East.
Woodbury said they hope to have the sites ready and open by June 1 next year. He said several businesses, including a motel, have expressed interest in building at the site.
Evans said the infrastructure at the business park has been designed "with ample utitilies for future expansion."
At Wednesday's groundbreaking ceremonies, Woodbury touted the Utah Valley Business Park as the nicest park in Utah Valley. He said the image, location and the proximity between Salt Lake City and Provo make the business park an ideal spot for businesses.
"Without a doubt it is the most convenient location in the county," he said. "It will create jobs and bring in revenue. It shows new businesses that American Fork is an ideal location."
Evans said once the park is developed, it could bring 4,000 jobs to the American Fork area.