The development agreement also provides for 125 apartments and 25,000 square feet of retail/office space on the remaining 2.1 acres.
The project is expected to be finished by December 2014.
"This is a fairly significant initial step to the redevelopment project which began in 2002," said Ogden Business Development Manager Tom Christopoulos.
Since that time, the city acquired several parcels in the 60-acre expanse between 18th and 20th streets, Washington Boulevard and Wall Avenue, razing homes and installing roads to make way for a high-density, walkable community alongside the Ogden River.
The 69 townhomes will build out in four one-acre phases, Christopoulos said, with the city retaining portions of the land until each phase is 80 percent occupied.
South River headed by Scott Sauric of Bluffdale and Blaine Walker of Sandy has requested an extension of eight years on the time that tax subsidies can flow to the developer from the project, pushing the end date out to 2026.
If the extension is granted by the various taxing districts in particular the Ogden School District the developer would forgo those incentives generated by the increase in property tax revenues from the development. The Redevelopment Agency would receive those dollars instead in exchange for the land.
While Weber County assessed the land at $2.4 million, Christopoulos said a recent appraisal values it at $1.3 million due to declining property values.
"Any reasonable developer will not pay more for the property than what it appraises for," Christopoulos said. "We are in essence selling it on contract and back-ending the payment."
If the taxing districts refuse to grant the extension, they will forgo 70 percent of the increase in tax revenues through 2018 up to $258,952, an amount that South River will pay to the Redevelopment Agency upon gaining control of the second section of property earmarked for apartments and retail use.
An environmental study showed that soil remediation is needed due to its lack of compactiblity. Christopoulos said the city capped its mitigation effort at $400,000, part of which will be paid in cash and the rest in city-provided services to haul off the bad dirt and replace it with good.
"This project has been around for as long as I've been on the council," said Councilman Brandon Stephenson, praising South River for bringing forward a plan he described as both reasonable and aggressive.
Councilwoman Amy Wicks voiced concern over whether the school district would want to forgo its share of the development's increased tax revenues through 2026.
"This project has been languishing for a while, and we're in a difficult position," Wicks said. "They've been holding off on receiving those funds with the hope that eventually it's going to pay off, and we're asking them to sit and wait."
Wicks cast a "hesitant" yes vote in favor of the agreement and land transfer.
Reviving the stalled Ogden River project
Bluffdale-based South River LLC will build 69 town homes, 125 apartments and up to 25,000 square feet of retail and commercial uses on 6.2 acres in the 60-acre Ogden River redevelopment area.
Section 1 • To break ground next month, will consist of 69 townhomes on 4.1 acres to be built and sold in four phases.
Section 2 • To launch by mid-2013, will include up to 125 apartments and 25,000 square feet of retail and commercial space on the remaining 2.1 acres.
The entire project is expected to finish by December 2014.