The Tooele County School District may be a hard sell when it comes to deferring property tax revenue from a proposed retail center in Tooele City.
The Tooele County School Board had a discussion about redevelopment agencies with Randy Sant, Tooele City’s economic development consultant, Tooele City Councilman Scott Wardle, and councilwoman and Tooele City Mayor-elect Debbie Winn during the school board’s Nov. 14 meeting.
As council members, Winn and Wardle are also members of the Tooele City Redevelopment Agency Board. Wardle chairs the city’s RDA board.
Tooele City’s RDA is looking to ask the school board to participate in a tax increment finance package for a 31-acre parcel on West 1000 North, behind Wendy’s, according to Sant.
Tax increment financing freezes the amount of property tax paid to taxing entities to the amount collected in the base year of the RDA project.
Additional property tax collected over the base amount, called “increment,” goes to the RDA to pay for infrastructure, incentives, and other projects in the RDA area.
The school district’s willingness to participate in a tax increment program for the retail center is important because the school district is the largest recipient of property tax dollars in the county.
In 2017, $69 out of every $100 paid in property tax in Tooele City will go to the school district.
School board members warned Tooele City officials that getting their participation might be an uphill battle.
“It’s good to have collaboration and discussion,” said Maressa Manzione, Tooele County School District board chairwoman. “We are not against economic development. But the school board is not a big fan of RDAs. Deferring property tax is a difficult pill to swallow. It’s hard to raise taxes and give taxes away.”
Sant explained the parameters of the agreement that the RDA might ask the school board to approve.
“The project is a mixed use development,” he said. “We’re only asking for increment from the commercial part of the development. What we are looking at is a $28 million investment by the developer with the RDA keeping 60 percent of the increment for 15 years or up to $2.5 million, whichever comes first. If you want the full tax sooner, we could talk about a higher percentage.”
School board member Kathy Taylor said the school board never seems to get back its investment in RDAs, whether associated with Tooele City, Grantsville, or the county.
“I’ve been in this system for 34 years,” Taylor said. “I was never a fan of this program. We beg for people to vote for taxes. I haven’t seen an RDA give us back a lot of money. We’ve lost more than we ever got back.”
While the school district may not have received a lot back from RDAs, the school district’s relationship with Tooele City has been very beneficial to the school district, according to Wardle.
“Tooele City and the school district have developed partnerships that benefit the school district, like the partnership with Settlement Canyon on park use,” Wardle said. “The agreement saved the school district millions of dollars by not needing to build a playfield for children and not having to go up in the construction.”
Wardle also cited partnership agreements on the use of the city pool, baseball and softball fields. He also reminded the school board that the Community Learning Center was built on land that came from the city’s RDA.
Sant suggested other ways the RDA and school district could partner together, including the sale of the former Harris Elementary School and the purchase of property near the school district office for a new bus yard.
“There are things we can do for you,” Sant said. “We just need to find out what you need so we can be better partners.”
Carol Jensen shared her reluctance to support RDAs.
“We’ve not had good experiences with RDAs,” Jensen said. “We’re darned if we do, darned if we don’t. We just barely passed this levy. Taxpayers sent a loud message. It’s a hard pill to swallow to ask for a tax increase and then give a tax break.”
Sant said that none of the revenue from the recently passed levy would be included in the new RDA increment.
In the next five to 10 years, the school district is going to need roughly $200 million to build a new high school, junior high, and two elementary schools, according to Scott Rogers, Tooele County School District Superintendent.
“Half of our revenue comes from property tax,” Rogers said. “We’re already poor when it comes to our tax base. It doesn’t logically follow that we would give up half of our revenue from a new development.”
Tooele City is willing to help the school district realize a return on its investment in an RDA, according to Sant.
“We as a city understand what you are under,” Sant said. “We just want to see if there are different ways we can get the money back to you that gives you a return on on your investment.”
The school board will review a proposed interlocal agreement with the Tooele City RDA for tax increment financing for the 1000 North redevelopment project area during its December meeting, according to Manzione.