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After a monthlong delay, the Utah Transit Authority Board on Wednesday voted to green-light a controversial development project near its Clearfield FrontRunner station.
The deal will allow Clearfield City to purchase about 24 acres on a 70-acre site near the train station, that the city plans to then resell at a discounted price to the Swiss rail-car manufacturer Stadler Rail. The proposal also makes another 8.75 acres available to Clearfield for purchase to accommodate a future Stadler expansion.
The company is expected to eventually bring about 1,000 jobs to the city.
The board resolution, which conditionally designates the land as surplus UTA property, passed on a 11-2 vote. Board Chairman Robert McKinley recused himself because his law firm has done work for Stadler. The deal will only be finalized once UTA and the city have reached an agreement on a set of terms, including a fair-market price for the land and a memorandum of understanding.
Two additional conditions were tacked on during the board's 90-minute plus discussion:
• UTA want the city to agree to a minimum building height for future developments erected on the land the agency will still hold and
• first right of refusal to repurchase the property if the deal between Stadler and Clearfield falls apart or if Stadler ever abandons the property.
Those conditions didn't ease the concerns of board member Brent Taylor, who along with Babs De Lay voted against the proposal.
Taylor, who is also the mayor of North Ogden, said he was troubled by the project's emphasis on economic development and jobs.
"I don't think that is our central mission," he said. "This land is owned by the taxpayers … was bought by the taxpayers for a purpose and our decision, in my opinion, has to be solely what is in the best interest of the taxpayers."
Taylor also said that UTA rules prohibit the sale of agency property to a private landowner without a public bidding process. Selling to another governmental agency, which will turn around and sell it to Stadler, is just twisting the rules to make a "square peg fit into a circle," he said.
Taylor and others also expressed concern about the valuation of the land, which has been appraised twice; Clearfield's appraisal set the value at $6.8 million, while UTA's sets it at $11 million.
Some on the board asked whether UTA had offered the site up on the open market to see if anyone is willing to pay top dollar. De Lay wasn't alone in that concern, but others noted that the property has been in the possession of the Thackarey Garn Company for the past five years and they were not able to develop it as planned.
UTA's board was expected to vote on the transaction in April, but delayed after learning that Sheldon Killpack, who resigned from the UTA board amid a travel scandal involving Stadler in 2015, will get a contract to build the rail-car plant.
The board wanted to look into whether Killpack's involvement violated any conflict of interest rules for ex-members or created any legal issues. UTA has a policy that bars former board members from involvement with transit-oriented development projects for a year after leaving the agency.
There was also concern about any possible impact on UTA's immunity deal with federal prosecutors, who are investigating the agency's handling of past transit-oriented development (TOD) sites, real-estate transactions and international travel. Former UTA officials, employees and others are also being scrutinized as part the probe.
Killpack traveled with other UTA officials to Switzerland in 2015, a trip that included a stop at Stadler's headquarters and discussion with company officials. The trip caused UTA to scrap a bidding process with companies seeking to lease part of a UTA maintenance facility, because Stadler was in the mix and the board feared the appearance of favoritism.
UTA General Counsel Jayme Blakesley said staff had investigated the issue since April, meeting with Clearfield City, Davis County and Stadler, as well as trying to elicit information from Utah's U.S. attorney's office.
Federal prosecutors declined to comment, as expected, Blakesley said.
Killpack's company, West One, has been hired, along with other contractors, to do pre-construction work for Stadler, but none stand to personally benefit from the land deal, Blakesley said.
Some board members nevertheless expressed continued concern.
"I think the conflict is not actual, but is certainly perceived and I don't know how you clean that," said Greg Bell, former Utah lieutenant governor.
De Lay, a real-estate agent, was more emphatic and suggested UTA should keep the land, rework the parcels and try and get a more lucrative deal.
"Previous relationships with former board members and Stadler make this fish continue to stink," she said. "Start over … re-plat, rezone and re-market."