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Holladay • In a 7-1 vote earlier this week, nearly all of the nearby tax-collecting groups signaled support for Dallas-based Howard Hughes Corp. to revive the slumbering 54-acre Cottonwood Mall redevelopment project.
The corporation's board of directors meets next week to discuss which of a dozen projects it should invest in first. Hughes consultant Kris Longson wanted to assure them that the $550 million project could still tap a full 20 years of tax subsidies.
The votes, cast by representatives from Holladay, Salt Lake County, Granite School District, State School Board and other taxing districts, delay the trigger date for tax bills to flow to the developer, from 2013 to 2017 at the latest.
That start date for the 20 years could happen sooner, once Hughes invests $226 million into the project's first phase.
The four-year extension would give the corporation enough flexibility to design the massive mixed-use neighborhood, sign on major retail tenants and erect its first phase possibly as soon as 2014.
The $96 million in tax incentives approved in an earlier agreement with former owner General Growth Properties include 75 percent of new property taxes and 75 percent of the city's increase in sales-tax revenue generated by the project.
The official groundbreaking for a revived Cottonwood Mall took place in May 2008. By then, General Growth Properties had demolished the 45-year-old original structure (except for Macy's), rerouted Big Cottonwood Creek, built bridges and raised portions of the property out of the flood plain.
"We've got a lot of money invested," Longson said. "We need to start realizing a return."
The economic downturn halted the project, and by April 2009, General Growth had declared bankruptcy. In October 2010, the commercial real-estate giant reorganized into two publicly traded companies, with Howard Hughes Corp. taking on development of master-planned communities.
General Growth still owns and operates Fashion Place Mall in Murray, which is being expanded, as well as Cache Valley Mall in Logan; Newgate Mall in Ogden; Provo Towne Centre; and Red Cliffs Mall in St. George.
School Finance Director Larry Newton, representing the State School Board, cast the lone "no" vote. "We continue to believe that this area would be developed anyway without the tax incentives," Newton said. "The whole idea is to remove blight and remediate land to a clean and raw state. That's where it is now."
Newton would agree to reimbursing the companies for their investments so far, "but that would be as far as I would go," he said.
Holladay Councilman Lynn Pace, who heads the Taxing Entity Committee, viewed it differently, calling the redevelopment project "a matter of enormous importance."
"We're clearly past the point of no return," Pace said, "and it's in all our interests to do whatever it takes to move this project forward as soon as possible."
Cottonwood Mall's future
At build-out, the 54-acre property could include up to 575,000 square feet of retail, 195,000 square feet of office space and 614 residential units.