Draper's dreams of turning the area around its FrontRunner station into a complex of high-rise towers catering to high-tech companies took a big step forward Friday.
In a specially called meeting, the Salt Lake County Council unanimously agreed to authorize the Mayor's Office to negotiate an interlocal agreement with the city that would commit a portion of the county's future tax revenue from that area to develop the infrastructure to serve it a multi-story parking terrace as well as water and sewer lines, roads, semaphores, storm drains and street lighting.
"We jumped a major hurdle today," said Draper Mayor Darrell Smith, hesitating to call it a done deal just yet.
While the council signed off on being part of the project, described by Economic Development Corp. of Utah Executive Director Jeff Edwards as "an employment center … another economic engine for the county," issues exist that must be dealt with in the agreement to ensure the county's investment is worth it.
That agreement will have to be negotiated by incoming Mayor Ben McAdams and approved by the council.
"But I don't see this as an impossibility," said Ralph Chamness, a deputy district attorney and member of the county's Debt Review Committee, which advised the county to explore the "intriguing endeavor" but to proceed cautiously.
One area of concern for the Debt Review Committee and more skeptical council members, such as Jim Bradley, involve the accuracy of Draper's forecasts for the development timetable and the project's ultimate value.
Those projections are jaw-dropping.
The largely undeveloped 353 acres within the city's proposed Community Development Area (CDA) is now valued at $6 million. But if this project pans out as planned, Draper is projecting its value will increase by the early 2030s to $1.2 billion.
But to get this economic-development ball rolling, the county and seven other taxing entities (Canyons School District being the largest) have agreed to bypass three quarters of their new tax revenue from those properties over the next 20 years.
That money ($44 million from the county, $199 million from all the taxing entities) would be used to reimburse the project developer for building the infrastructure that could entice major technology companies to put headquarters or major operations there, directly accessible by rail.
"Business goes where it's wanted and where the pieces are in place that make it clear the community wants that type of business," said EDCU's Edwards. "This is an opportunity for the county to put a clear stake in the ground that it wants to be involved in the amazing [technology] nexus that has formed in southern Salt Lake County and northern Utah County."
That sounds great, said Bradley, but $44 million is a lot of money to bypass, about $11 million more than for all of the county's half dozen other CDAs combined. The county better make sure its money is used wisely, he added.
The council asked the mayor's office to address a few key issues in the agreement:
• Seek the same terms as Canyons School District received in forwarding to the project only 70 percent of its new tax revenue, not 75 percent as currently requested;
• Explore the possibility of shrinking the size of the CDA, with a review perhaps seven years later to decide whether to add the rest, depending on how the first phase is going.
• Secure the right to review reimbursements to Draper's developer.
The developer has been identified as Draper Holdings, Inc. One of its consultants is Terry Diehl, a former Utah Transit Authority board member and private developer who was involved in the early stages of the project and helped obtain rezoning to accommodate the high density, high-rise office towers.
While details remain to be worked out, Draper Mayor Smith said the council's action lets the city tell companies interested in the site that "it's going to happen. … This area is the bull's-eye."
The following taxing districts have agreed to bypass portions of their future tax revenues over the next 20 years to help develop high-rise office towers and other facilities on 353 acres around Draper's FrontRunner station (13000 South):
Canyons School District
Salt Lake County
Salt Lake County Library
Central Utah Water Conservancy District
Jordan Valley Water Conservancy District
South Valley Sewer District
South Salt Lake Valley Mosquito Abatement
Source • Draper city