SALT LAKE CITY — Despite pushback from a board member and Salt Lake City official, the Utah Inland Port Authority held a specially scheduled meeting Thursday to create a project area before the end of the year — paving the way to potentially commit future tax dollars to incentivize development.
It's the port authority's first project area in its mission to create a global trade hub on about 16,000 acres in northwest Salt Lake City that are expected to be Utah's largest-ever economic development project.
And yet, it's not the first rodeo for the company seeking tax incentives.
The company — Stadler Rail, a Swiss-based rail car maker — had already finalized a deal with Salt Lake City earlier this spring to expand its manufacturing facility on 63 acres near 5880 W. 150 South.
The city's deal included the commitment of about $9.6 million in future city tax increment over 20 years to help with infrastructure costs. In the deal, the facility was projected to be 250,000 square feet by the end of 2019 and more than 900,000 square feet by the end of 2029, as well as grow from employing about 150 to about 1,000 over the next 10 years.
That deal with Salt Lake City was muddled by the Utah Legislature's creation of the Utah Inland Port Authority, which has the power to take control of future tax dollars from Salt Lake City and other taxing entities. The Stadler Rail property fell within the port authority's jurisdiction, leaving the company in limbo as far as whether Salt Lake City officials would even have the power to hold up their end of the deal.
Thursday — despite pushback from Salt Lake City Mayor Jackie Biskupski's economic development director, Lara Fritts, who also serves as a port board member — the Utah Inland Port Authority Board voted to approve the creation of a project area for the Stadler Rail property.
The vote clears the way for the port authority to commit future tax incentives to Stadler, though it's not yet clear how similar that deal will be to Salt Lake City's. That decision will come later.
"This is the first project area we've created, so that's momentous," board Chairman Derek Miller, who is also president and CEO of the Salt Lake Chamber, told the Deseret News in an interview after the vote. "The charge, the responsibility given to the board by the Legislature was to go create project areas to ultimately bring business that's going to bring jobs."
Fritts was the lone board member to vote against the project area, instead urging the board to let Salt Lake City's deal with Stadler stand rather than draw out the process.
"Clearly I'm disappointed," she said. "There was a path forward that gave Stadler I think better predictability. ... All the board had to do was create a resolution to allow Salt Lake City to go ahead and complete our agreement. It's already been signed. We're ready to go. So it's unfortunate that a company's been caught in this no-man's land for a number of months."
She also warned the vote could open the port authority up to a potential lawsuit.
"The reality is anytime a taxing entity is harmed, there is a potential for litigation," Fritts said. "As a board member, I have a fiduciary responsibility to try to keep the board out of potential litigation, regardless of who calls for it."
Fritts said she doesn't know whether a specific lawsuit is forthcoming. However, her boss, Biskupski, has said the port authority will have its "day in court," calling its powers to usurp city control "unconstitutional." She also said that day wouldn't come until the port authority took a contestable action.
Miller was unfazed by the prospect of potential litigation.
"Anytime we take an affirmative action there could be a lawsuit," Miller said. "That risk will always exist. But that does not distract us from the charge we've been given. That's not going to stop this board. If we're afraid of lawsuits being initiated because we created a project area, then this board would do nothing and we may as well never meet again.
"If there is an entity or an individual out there that has sworn and crossed their heart and hoped to die that they're going to start a lawsuit when we create a project area, then deferring on the Stadler project wouldn't do one thing to stop that," he added.
However, Thursday's vote didn't rule out any options for the port authority as it moves forward with a potential deal with Stadler, Miller said. The board could still "defer" the project area and let Salt Lake City's deal stand, adopt Salt Lake City's plan for its own, or propose a new deal, he said.
What will happen remains to be seen, but Miller said he's "not a fan of the defer option" because the board "has an important responsibility to do these kinds of project areas."
Miller acknowledged Stadler has been in "limbo" after being "caught in the middle" between the state and the city. So, if there's "one thing I hope we all can agree on," Miller said, "is the company should not be disadvantaged because of that."9 comments on this story
"I'll do everything I can to make sure they're treated fairly, because they acted in and came here in good faith, and we need to treat them in equally good faith," he said.
Lucy Knight Andre, general counsel for Stadler, told the Deseret News after Thursday's vote Stadler is "hopeful" for deal similar to the deal struck with Salt Lake City.
"Salt Lake City was great with us, and we have every expectation that the inland port board will be equally great," she said. "We expect everybody to move forward in good faith and we would expect everyone to have faith in us."