Salt Lake City: Official Development News Thread - Part 5

[Stenar]

No money is spent upfront, which is what we were both saying, so we're not both wrong on that point. Can you point to any city or community in the country that has become insolvent because of tax breaks? Large tax breaks like this have been going on for over a generation.
No city is stupid enough to offer large tax breaks to everyone. They have to be used strategically.

Originally Posted by hammersklavier

You two are both wrong and i-15 is right. Just because there's no apparent spending of money with a tax break doesn't mean money isn't being spent. What would be fair to say is that a tax break denies public coffers taxable income over the long run -- in other words, any individual tax break seems like a good idea because of the apparent short-term benefits, but as you start amassing tax breaks over time in order to lure businesses you might find that you're unable to tax your most economically productive entities, making it significantly harder to keep investing and reinvesting in your physical plant ... Do this enough times and with enough businesses and you might find your city structurally insolvent in, oh if I had to guess ... a generation or so in the future.

[hammersklavier]

Originally Posted by Stenar

No money is spent upfront, which is what we were both saying, so we're not both wrong on that point. Can you point to any city or community in the country that has become insolvent because of tax breaks? Large tax breaks like this have been going on for over a generation.
No city is stupid enough to offer large tax breaks to everyone. They have to be used strategically.

You're seriously missing the point.

Say we have a municipality with 100 square miles of taxable land that had previously been mostly agricultural. Now it wants to announce it's open for business ... So it strikes a deal with a company, let's say Company A, to occupy a shiny new business park for tax breaks. Let's say such a business park occupies about a square mile of land. Now the municipality has, in effect, 99 square miles of taxable land, even as the maintenance obligation has doubled (agricultural communities don't incur a lot of infrastructural demands).

So some more businesses comes to town, let's call them Companies B and C, lured by Company A ... and they're willing to set up shop, but only if they get tax breaks as well. This is the fallacy of the strategic claim; once somebody gets tax breaks, everybody's gonna want them. This wasn't what the city wanted but they grit their teeth and gives Companies B and C their tax breaks. Now there are 97 square miles of taxable land in town, even though the maintenance obligation is now 4x what it was before.

Now things are humming, and Companies D, E, F, and G all want to relocate! But hearing that Companies A, B, and C all came to town on a promise of tax breaks, they all want them too. This is becoming a serious problem for the city, but they need to keep things going, keep it seeming like things are going swimmingly, so they hand them out. There are now 93 square miles of taxable land in the city, even as the maintenance obligations the city are now 8x what they were when it was still an agricultural community ...

Can you see the problem yet? It's like a shell game, except the city's screwed up, it's running a shell game it can't win. But the problems aren't apparent in the first handful of instances; instead, corporate demand for tax breaks is ramping up on an exponential curve, while the mismatch between obligations incurred and available resources to pay for it is increasing on a quadratic curve (because every new tranche of obligations incurred has a concomitant loss of taxable land to pay for them). Eventually, in its pursuit to maintain that things are business as usual, the city will become structurally insolvent.

It's true the first tax breaks began in the 80s, but at the time they were still few and far between. Now they've ramped up to the point where nearly every corporate location and relocation demands tax breaks -- and the problems associated with them are becoming clearer. Tax breaks aren't free money; they're effectively a bribe of future resources to make things seem hopping now.

[Marvland]

Originally Posted by hammersklavier

You're seriously missing the point.

Say we have a municipality with 100 square miles of taxable land that had previously been mostly agricultural. Now it wants to announce it's open for business ... So it strikes a deal with a company, let's say Company A, to occupy a shiny new business park for tax breaks. Let's say such a business park occupies about a square mile of land. Now the municipality has, in effect, 99 square miles of taxable land, even as the maintenance obligation has doubled (agricultural communities don't incur a lot of infrastructural demands).

So some more businesses comes to town, let's call them Companies B and C, lured by Company A ... and they're willing to set up shop, but only if they get tax breaks as well. This is the fallacy of the strategic claim; once somebody gets tax breaks, everybody's gonna want them. This wasn't what the city wanted but they grit their teeth and gives Companies B and C their tax breaks. Now there are 97 square miles of taxable land in town, even though the maintenance obligation is now 4x what it was before.

Now things are humming, and Companies D, E, F, and G all want to relocate! But hearing that Companies A, B, and C all came to town on a promise of tax breaks, they all want them too. This is becoming a serious problem for the city, but they need to keep things going, keep it seeming like things are going swimmingly, so they hand them out. There are now 93 square miles of taxable land in the city, even as the maintenance obligations the city are now 8x what they were when it was still an agricultural community ...

Can you see the problem yet? It's like a shell game, except the city's screwed up, it's running a shell game it can't win. But the problems aren't apparent in the first handful of instances; instead, corporate demand for tax breaks is ramping up on an exponential curve, while the mismatch between obligations incurred and available resources to pay for it is increasing on a quadratic curve (because every new tranche of obligations incurred has a concomitant loss of taxable land to pay for them). Eventually, in its pursuit to maintain that things are business as usual, the city will become structurally insolvent.

It's true the first tax breaks began in the 80s, but at the time they were still few and far between. Now they've ramped up to the point where nearly every corporate location and relocation demands tax breaks -- and the problems associated with them are becoming clearer. Tax breaks aren't free money; they're effectively a bribe of future resources to make things seem hopping now.

You are going to get even madder really soon, when the biggest industrial inland port concept in North America gets built with post-performace tax incentives in the NW quadrant of SLC. TIF is one of the primary tools of urban redevelopment and one of the only ones that actually works from a raw investment standpoint. You are basically arguing for the disbandment of redevelopment zones. I get it, you don't like it. However, it will continue for the foreseeable future and thank god for that or vast swaths would just sit there for ever.

[asies1981]

Originally Posted by airhero

It seems the buildings along the 400 S corridor keep looking better with each subsequent development. Hopefully 400 E 400 S keeps up with that trend (though Wadsworth is a primarily suburban developer so I'm not getting my hopes up).

Nobody is asking for this, but in any case, in order of completion date, here's a short qualitative evaluation and grade for recent developments on 400 S:

1. Seasons on the Boulevard, 460 E 400 S: Horrible design, appalling finishes, sterile and ugly at street level. F
2. Encore Apartments, 489 E 400 S: Ugly design, horrible street presence. D-
3. Liberty BLVD, 734 E 400 S (almost completed, already occupied): Okay design, I personally like the rusted panels and the signage, street level restaurant on 400 S. It's probably Cowboy's best design so far, tho the phrase "Cowboy's best" is almost an insult. B-
4. 4th and 4th, NW corner of 400 E and 400 S intersection (nearing completion): Decent design, but plans at the street level a bit disappointing. C+
5. The Exchange building 1, 320 E 400 S (planning docs in for review): Nice design, tall for 400 S (9 stories), apparent finishes leave something to be desired for me personally, great looking street level retail spaces on all sides. B+
6. The Exchange building 2, 340 E 400 S (planning docs in for review): Based on what I'm seeing of their plans, great design, great mix of uses with residential, office, and retail somehow packed into this seemingly small building. I love it. A

Really hope the exchange gets built. We haven't heard anything about it since January.

Great list except you were too kind in your rating of Encore, that should also be an F for its street frontage, lol.

[Stenar]

The Facebook data center ought to have been built in West Jordan, which is almost entirely built out, which wouldn't have led to sprawl in Eagle Mountain. But Dabakis, McAdams and uninformed Utahns shot themselves in the foot with that one.

Originally Posted by Always Sunny in SLC

Keep in mind this is how sprawl is enabled. Many millions in utilities being put in by Facebook with enable developments to sprout up for much lower costs than developers would have otherwise spent. This is an example of how business is used to subsidize sprawl. Back in, I believe, 2008 the legislature passed a law that reallocated sales tax money collected municipalities and spread it more evenly among the cities. The reason was bedroom communities, exurbs and cities that otherwise zone out all but a little commercial were complaining that they didn't have enough revenue to run their cities. So the state took money from cities that had larger sales tax bases and sent it to ones that had little to none.

If we instead expected cities to fund themselves (at least all the core services) by the property taxes they collect and not rely on businesses subsidizing their towns through the sales tax, we would slow sprawl significantly. It would more clearly illustrate to people how expensive single family development is and how much it needs that sales tax money to exist. It would put much more pressure to infill than jumping to the fringes of our cities and counties.

[delts145]

I think the writing on the wall is being set in stone. Cedar Valley will only accelerate Utah Valley's already hyper growth rate. This Facebook/infrastructure shot in the arm, and the many subsequent followup companies will put North and Northwestern Ut. County's growth on steroids. It will be interesting to see over the next 20 or so years how Lehi's size and influence will be affected. Will Lehi become larger in population than Provo? Will it be second only to Salt Lake City in population, and will Utah County become more populous than Salt Lake County? I sincerely hope that Lehi will protect and reaffirm it's impressive historic core.

Add the former prison site to the mix, and the developing inland port, the Wasatch Front is in for some pretty heady perhaps kind of scary growth.

Prediction: If it doesn't already exist in an infant stage, I see a major University building it's foundations in the not too distant future in the Lehi area.

.

[delts145]

2018 - RANKED TOP 3 IN NATION FOR OFFICE ABSORPTION AND RISING RENT RATES

http://www.orionprop.com/topfive/tem...market-in-u-s/

1. PHOENIX'S CITY OF TEMPE

2. SEATTLE'S LAKE UNION

3. SALT LAKE CITY'S SOUTH VALLEY

[airhero]

I wonder what effect the infrastructure improvements due to the data center will have on sprawling development in Eagle Mountain. Most the demand for new units in Eagle Mountain seems to be closest to the urban corridor in the northeast part of town. The data center is as far as you can get from that corridor within city limits. Maybe this new infrastructure will shift new growth south a bit, but overall it's hard for me to see this having a huge effect on total population growth in the city, and any effect would likely be negligible at the county level.

Additionally, I think the state has been overly bullish on Utah County's population growth. To pass or even catch up to SL County in population, it's got to have consistent numerical growth greater than SL County. The only decade that has happened was 2000-2010. Utah County outgrew SL County by 35,000 people. I think that's when the bullishness really ramped up. According to census bureau estimates, SL County is outpacing Utah County again in numerical growth, by about 16,000 people between 2010 and 2017. The state uses The Kem C. Gardner population projections, and they are already way off. The populations they projected at the time for 2017 in Utah and SL counties were 623,706 and 1,127,117, respectively. Recent estimates for the counties for 2017 put them at 606,425 and 1,135,649. It's been two years since the projections came out and already Utah County is -17,281 and SL County is +8,532 from what they projected. That's a very significant difference in two years. Granted, the numbers from the census bureau are only estimates. And still Utah County could make up for that -17,281 with very robust growth the next few years, but I'm thinking it won't, and this does seem to be a small confirmation of what I suspected when the projections first came out. I also thought growth projections for the state as a whole were overly bullish and so far the state has fallen behind projections. I think that's a good thing because the growth they have been projecting is absolutely scary. We'll see if these last two years are indicative of the future.

[San Diego-Honolulu]

Two things that are not being mentioned much when it comes to potential northern/southern Utah County growth and southern SL County growth is the importance of a new U.S. interstate highway on the west side of that area (with that also just a better road system) and the importance of the Provo Airport growing into not just a secondary aiport or reliever airport to the SLC airport but it’s own airport system. Similar to what Orange County airport is to LAX. With more major companies in that area, the growing population, more and more traffic building between Utah County and SL county, and two major universities in Utah county, the Provo airport should try to attract major airlines to the airport. Having a new interstate highway would help as well. I’m hearing the growth of that area is a lot further ahead of the infrastructure and current road system.

[Ironweed]

Originally Posted by Always Sunny in SLC

Keep in mind this is how sprawl is enabled. Many millions in utilities being put in by Facebook with enable developments to sprout up for much lower costs than developers would have otherwise spent. This is an example of how business is used to subsidize sprawl. Back in, I believe, 2008 the legislature passed a law that reallocated sales tax money collected municipalities and spread it more evenly among the cities. The reason was bedroom communities, exurbs and cities that otherwise zone out all but a little commercial were complaining that they didn't have enough revenue to run their cities. So the state took money from cities that had larger sales tax bases and sent it to ones that had little to none.

If we instead expected cities to fund themselves (at least all the core services) by the property taxes they collect and not rely on businesses subsidizing their towns through the sales tax, we would slow sprawl significantly. It would more clearly illustrate to people how expensive single family development is and how much it needs that sales tax money to exist. It would put much more pressure to infill than jumping to the fringes of our cities and counties.

Well said sir! I agree 100%

[Wasatch Wasteland]

Originally Posted by San Diego-Honolulu

Two things that are not being mentioned much when it comes to potential northern/southern Utah County growth and southern SL County growth is the importance of a new U.S. interstate highway on the west side of that area (with that also just a better road system) and the importance of the Provo Airport growing into not just a secondary aiport or reliever airport to the SLC airport but it’s own airport system. Similar to what Orange County airport is to LAX. With more major companies in that area, the growing population, more and more traffic building between Utah County and SL county, and two major universities in Utah county, the Provo airport should try to attract major airlines to the airport. Having a new interstate highway would help as well. I’m hearing the growth of that area is a lot further ahead of the infrastructure and current road system.

Mountain View Corridor is being extended around the point and down through Saratoga springs. Essentially a west side interstate.

[RC14]

^
MVC may, eventually extend as far south as Santaquin along the west side of Utah lake.

[Utah_Dave]

Originally Posted by RC14

^
MVC may, eventually extend as far south as Santaquin along the west side of Utah lake.

It needs to tie into the 201 and I-80 asap on the north end. Then Trucks from the inland port can bypass I-15 south altogether

[I-15]

Originally Posted by Utah_Dave

It needs to tie into the 201 and I-80 asap on the north end. Then Trucks from the inland port can bypass I-15 south altogether

Funding is in place to extend it from 4100 S to SR-201 with construction beginning in 2019 and lasting through 2021.

The final north extension to I-80 is not currently funded.
The section from Bluffdale to 2100 North in Lehi is also not funded.

https://www.udot.utah.gov/mountainview/

And unfortunately it will be many more years before its upgraded along its entire length to a limited access freeway that trucks would use as a bypass.

[urban.cyclist]

I've been trying to figure out what the city's current requirements are for an ADU in R1-5000 zones. Do you guys know? Building Salt Lake doesn't have any links to authoritative sources and I can't find anything in the zoning code. I'm looking at buying a property to develop and I want to make sure an ADU can be built.

The last authoritative thing I heard was within 1/4 mile from a trax line... but did they end up voting to allow them anywhere in the city?

[Makid]

Originally Posted by urban.cyclist

I've been trying to figure out what the city's current requirements are for an ADU in R1-5000 zones. Do you guys know? Building Salt Lake doesn't have any links to authoritative sources and I can't find anything in the zoning code. I'm looking at buying a property to develop and I want to make sure an ADU can be built.

The last authoritative thing I heard was within 1/4 mile from a trax line... but did they end up voting to allow them anywhere in the city?

I don't think they have finalized the overlay area yet. There was a work session about a month ago (prior to the budget and sales tax increase) where they were working on the changes for it. I was listening to it while at work. Unless they finished it, I think they are planning on finishing it after the budget work is finished here in the next few weeks.

[Liberty Wellsian]

Originally Posted by urban.cyclist

I've been trying to figure out what the city's current requirements are for an ADU in R1-5000 zones. Do you guys know? Building Salt Lake doesn't have any links to authoritative sources and I can't find anything in the zoning code. I'm looking at buying a property to develop and I want to make sure an ADU can be built.

The last authoritative thing I heard was within 1/4 mile from a trax line... but did they end up voting to allow them anywhere in the city?

I'm pretty sure that the ADU ordinance requires the property to be owner occupied.

The city is looking to add mother in law apartments not a bunch of shacks owned by slumlords(not saying that you are such a person just that is what they are trying to avoid)

[urban.cyclist]

Originally Posted by Liberty Wellsian

I'm pretty sure that the ADU ordinance requires the property to be owner occupied.

The city is looking to add mother in law apartments not a bunch of shacks owned by slumlords(not saying that you are such a person just that is what they are trying to avoid)

It does, it at least did last I heard. That is my plan.

[asies1981]

So Salt Lake City's rents were the 2nd fastest growing in the country last year. Also, we are still racially segregated as a metro area.

[TonyAnderson]

Originally Posted by airhero

It seems the buildings along the 400 S corridor keep looking better with each subsequent development. Hopefully 400 E 400 S keeps up with that trend (though Wadsworth is a primarily suburban developer so I'm not getting my hopes up).

Nobody is asking for this, but in any case, in order of completion date, here's a short qualitative evaluation and grade for recent developments on 400 S:

1. Seasons on the Boulevard, 460 E 400 S: Horrible design, appalling finishes, sterile and ugly at street level. F
2. Encore Apartments, 489 E 400 S: Ugly design, horrible street presence. D-
3. Liberty BLVD, 734 E 400 S (almost completed, already occupied): Okay design, I personally like the rusted panels and the signage, street level restaurant on 400 S. It's probably Cowboy's best design so far, tho the phrase "Cowboy's best" is almost an insult. B-
4. 4th and 4th, NW corner of 400 E and 400 S intersection (nearing completion): Decent design, but plans at the street level a bit disappointing. C+
5. The Exchange building 1, 320 E 400 S (planning docs in for review): Nice design, tall for 400 S (9 stories), apparent finishes leave something to be desired for me personally, great looking street level retail spaces on all sides. B+
6. The Exchange building 2, 340 E 400 S (planning docs in for review): Based on what I'm seeing of their plans, great design, great mix of uses with residential, office, and retail somehow packed into this seemingly small building. I love it. A

Really hope the exchange gets built. We haven't heard anything about it since January.

They're basically all D's. Huge amount's of parking and no ground-level retail in them. The lack of ground-level in any of these projects means you're definitely driving to get things you need and want. They're basically creating a dense car-oriented core for the city. Liberty blvd has ground-level, but it's also a 4-story sprawling building that takes up an entire huge SLC block.