A lawsuit filed in 4th District Court by a grassroots Orem organization over incentives offered to the University Mall has among its supporters the developer of a competing Provo mall.
John Price of JP Realty Price Development, developers of the Provo Towne Center mall now in the midst of construction on the south end of Provo, is one of the members of People For Fair Taxation.People For Fair Taxation filed suit this week against Orem's City Council this week to try and stop what they cite as a giveaway of tax dollars. They contend the City Council is providing direct aid to a private shopping mall, which "is an improper expenditure of public funds for private purposes."
Salt Lake attorney Bruce T. Jones, representing People For Fair Taxation, said Price Development is not the driving force behind the group's action. He also says the Provo-Orem rivalry is overplayed.
According to Jones, Price is simply concerned because he owns property in Orem and is upset over the decision made without adequate consideration.
However, "a local businessman" - not identified in the group's press release - is quoted as saying, "This is just another example of a handful of politicians and bureaucrats deciding how our hard-earned dollars will be spent without the people's input."
Michael W. Homer, who will handle the litigation for the group, said Orem city touched off the lawsuit when the City Council passed the ordinances offering money to ZCMI and Woodbury Corp.
"If you want to talk about cause and effect, Orem city generated this," he said.
According to the release, People For Fair Taxation does not believe Orem should be offering to give up to $20 million to "a big corporation" such as Woodbury Corporation, owners of the University Mall.
"People for Fair Taxation" believes that it is never the financial responsibility of the taxpayers to bail out a private corporation," continues the release. "There are many struggling businesses in the community, and they have not asked the government to step in and offer them the same tax incentives."
Orem officials have agreed to pay the ZCMI Corporation an initial sum of $2.5 million to help finance their renovation and keep them as an anchor in the University Mall. In a complicated pair of agreements with Woodbury Corporation, they have also promised to pay as much as the $20 million if the mall and ZCMI do not make projected sales goals over the next 20 years after a Nordstrom store comes in as a third anchor.
Orem officials, including Mayor Joe Nelson, have publicly declared it to be in the best interest of all of Orem's businesses to keep the mall viable.
Nelson, who campaigned against offering tax incentives to private businesses, said this is a unique situation with Orem's very economic security at stake.
City Manager Jim Reams and Nelson have said their actions have been necessary partly because the Provo mall development team has earnestly strived to entice ZCMI to leave Orem and join the Provo Towne Centre bank of businesses.
JCPenney was drafted earlier into becoming a Provo mall anchor by JPRealty, touching off a war of words and dollars between the two Utah County cities.
"This just goes to show that there is a lot of concern about how strong a competitor the University Mall is going to be," said Walker Kennedy, general counsel for Woodbury Corporation.
Ron Madsen, redevelopment director for Provo, said Friday that Provo is paying Dillard's up to $2 million over a period of 15 years for site preparation and public improvements such as the storm drain the city required Dillard's to run onto the site and under the freeway.
Madsen said the agreement with Dillard's was in place long before the wrangling began between Orem and Provo over anchors and involves property-tax redevelopment funds, not sales tax revenue.
"There's a world of difference between sales tax and property tax. It's really difficult to compare (the two offers)," he said.