Successful efforts by Sugar House businesses to downgrade their tax assessments have drastically reduced the Salt Lake Redevelopment Agency's ability to make any improvements in the area.

City Council members, who wear alternate hats as board members of the city's Redevelopment Agency, say they are concerned about the precedent set by property owners who requested an adjustment from the Salt Lake County Board of Equalization on their property tax assessments.The agency is financed by capturing additional taxes created by new development after it sets up a project area. The action by the property owners raises the question of whether businesses in the area support the concept of redevelopment, officials said.

The city has three redevelopment areas: Sugar House, the Central Business District and the West Temple Gateway.

"It scares the heck out of me," said Councilman Willie Stoler, who represents the Sugar House area. "They could do that down here (in the city's massive downtown project area). If it's that easy to dilly-bop in there - and say, `Hey, it's too much' - how much are they (the county assessor) overestimating on everything?"

The RDA anticipated spending about $150,000 in tax increments to finance a parking and traffic circulation plan. Instead, with the readjustments, the Sugar House area will receive only about $35,000 in funding for projects to improve the area.

By comparison, the agency is counting on $8 million from the downtown area. Redevelopment Agency Executive Director Mike Chitwood said about $2.95 million could be used to buy property on Block 57.

"I think we've really got a shaky situation," said Councilwoman Florence Bittner. "The Sugar House Business Committee really shot themselves in the foot."