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With the exception of Macy's department store, the 57-acre Cottonwood Mall property sits vacant in Holladay, a victim of the recent recession.

However, buildings soon could sprout on the sprawling space if its new developer, Dallas-based Howard Hughes Corp., can obtain a four-year extension from the city and other affected government entities on the scheduled start date of a 20-year tax subsidy.

A 2008 agreement channels 75 percent of new property tax dollars generated by the urban renewal project back to the developer over a 20-year period, starting no later than 2013. Holladay city also pledged to give back 75 percent of its sales tax revenue during that time.

Howard Hughes consultant Kris Longson told the Holladay City Council last week that the company needs more time to build the first phase, which is why it needs an extension on the subsidy.

"We need to represent to our board that it's all still in place that if they move forward, they can still make it work financially," Longson told the council.

At stake is $96 million in new property-tax dollars to offset the project's infrastructure costs.

Longson seeks a new vote of the project's taxing entity committee — which includes the county, city, school district and others — that would authorize the 20-year diversion of new tax dollars to begin no later than 2017.

Completion of Cottonwood's Phase 1 will start the flow of tax dollars to the developer. As previously agreed, the Howard Hughes Corp. must invest a minimum of $226 million into Phase 1, constructing 134 residential units and adjacent retail and office amenities.

General Growth Properties owned the 1960s-era mall and razed it in 2008, intending to invest $550 million to build a high-end, phased neighborhood of homes, retail and office space in its place. Preliminary work took place to reroute Cottonwood Creek through the property and also to raise portions of it several feet.

However, the economic downturn drove GGP toward bankruptcy, stalling the ambitious construction project for more than three years.

In November 2010, General Growth emerged as two publicly traded companies, having completed the spinoff of the standalone Howard Hughes Corp., which focuses on master-planned developments.

On its website — — the company touts the Cottonwood project as a town center that will one day "serve Salt Lake City's most affluent neighborhoods."

At build-out, the property could feature 614 residential units, 575,000 square feet of retail and 195,000 square feet of office space.

Randall Feil, attorney for Holladay's Redevelopment Agency, said Howard Hughes Corp. would need all 20 years of tax incentives to make the project work.

"If they finish [Phase 1] in 2014, the trigger year would be 2015," Feil told the City Council.

City Manager Randy Fitts remains cautiously optimistic about how soon and how fast the immense overhaul can happen.

"When they arrive in our building permit office and lay some plans down, then we'll get excited," Fitts said.

The start of actual construction will be cause for celebration in this small east-side city, Fitts added. "Next to our city's incorporation, that will be probably the biggest news we've had."

Twitter: @catmck —

What's next forCottonwood Mall?

P Holladay's Redevelopment Agency board, made up of City Council members, votes Thursday on a resolution expressing support for the Howard Hughes Corp. proposal to delay the onset of a 20-year tax subsidy to 2017 at the latest.

The project's taxing entity committee — made up of representatives from the county, city, school district and others who would lose tax revenue because of the subsidy — must then vote on postponing the 20-year start date. That meeting has yet to be scheduled.

The board of directors of Howard Hughes Corp. meets in late June to discuss further action on the $550 million project.

O More information about the company and its vision for the Cottonwood Mall >