Inland Port: A Controversial Vote Explained

October 11th, 2019|Action of the Day|0 Comments

The proposed Utah Inland Port has created environmental concerns and legislative control issues since its inception, resulting in disputes, contention and protests. Efforts are underway to study and monitor environmental impacts, but the sustainability goals of the project remain unclear. In the midst of ongoing controversy, Salt Lake City recently held a controversial vote. What did it do and why did it matter? Let’s dig into the details

A tax cut for control

In a controversial vote last month, Salt Lake City council approved a proposal that would grant a $28 million tax reimbursement to developers in the northwest quadrant. Although the tax break seems counterproductive, the council explained their reasoning:

Salt Lake City currently maintains jurisdiction over the land and control over the taxing and land-use authority because of agreements in place between the developer and the municipality before the state took control of the port area. Originally in March of 2018, the city approved the developer’s contract just weeks before the Utah legislature created the inland port. According to Mayor Jackie Biskupski, the tax increment agreement is the final step of fulfilling the City’s contracts with NWQ, LLC who is willing to develop their property and operate with the City as a fair partner. 

What if the Council had voted “no”?

A “no” vote by the council would NOT have guaranteed that the development would not happen eventually anyway. Instead it would mean that the City’s oversight would end and the land would presumably be handed over to the state. Breaking the contract would result in the city losing planning control, environmental standards and tax revenue from 7,000 acres of the northwest quadrant, including 4,000 acres of sensitive wetlands that will remain undeveloped.

What does the Council’s “yes” vote mean?

By voting “yes,” the City maintains tax and land-use authority over the Inland Port development. Council members assured residents they felt it was necessary to maintain their seat at the table when it comes to the development decisions. 

What happens to the property tax within this deal?

The annual property tax value on the Inland Port property is estimated at $724K a year, but could increase to around $4.2 million annually after the development of phase one. The initial phase is projected to generate over 6 million square feet of industrial space within 10 warehouses and up to 2,900 jobs. Over the next 20 years, some 54% of new tax increment will go back to the developer, while 25% will go to the city’s general fund. An estimated 14% will go to affordable housing and to RDA administrative costs, divided equally.

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