Taxing Entity Committee
Redevelopment Agency of
Tremonton City, Utah
Minutes
June 11, 2018
11:00 a.m.
Tremonton City Council Chambers
Tremonton City Hall
102 South Tremont Street
Tremonton, Utah 84337
1. Welcome
Chairman Fridal called the meeting to order at 11:04 a.m. and welcomed those present. The meeting was held at the Tremonton City Council Chambers on June 11, 2018 at 11:00 a.m.
2. Introduction of Committee Members
a. Identification of voting members of the Committee and which taxing entity that they represent
The following Taxing Entity Committee Members were in attendance: Board Member Rod Cook representing Box Elder School District, Board Member Steve Carlsen representing Box Elder School District, Board Member Mitch Zundel representing Box Elder County, Alternate Von Hortin representing Utah State Board of Education, Director Shawn Warnke Tremonton City, Mayor Roger Fridal Tremonton City, and Linsey Nessen TEC Secretary.
Also in attendance was Tremonton City Attorney Dustin Ericson.
Excused: Natalie Grange, Utah State Office of Education, Lyle Holmgren, Tremonton City Councilmember, Jeff Scott, Box Elder County, and Dave Forsgren, Bear River Water Conservancy District and Box Elder Mosquito Abatement.
3. Approval of Minutes – June 13, 2017 – stands as approved
4. 2017 Tax Increment and Distribution – Shawn Warnke
a. West Liberty Foods Economic Development Area
1. West Liberty Foods:
Director Warnke said this project area started about 10 years ago and there is about $100 million of property in this area and it is split pretty equally between real and personal property. This project area has concluded with this last distribution. We have worked on the necessary documents to dissolve this district so the various taxing entities should see an increase in their property tax by virtue of this project area.
In this project area, $1.3 million was received in tax increment in 2017 and $269,000 (20%) was taken off the top for affordable housing, which is just the way this project area was structured. The amount of tax increment that was distributed back to West Liberty Foods was $980k. Over the life of this project area, based on the $100 million of investment, we distributed $9 million back to West Liberty Foods.
This has been a successful project area. West Liberty and Millard came online closely after Lay-Z-Boy shut down and helped our residents transition. There were about 600 jobs created with this project area. Mayor Fridal said as of one month ago, West Liberty has 750 jobs.
2. Millard Refrigeration:
The other investment included in this project area is Millard Refrigeration, which, based on taxes paid, received $97k back for a total return over ten years of $1.1 million.
3. Moderate Income Housing Funds:
Steve Carlsen asked where the 20% of tax increment for affordable housing goes. Director Warnke said it goes to Bear River Association of Governments (BRAG), who is the housing authority for this area. The RDA also retains some of those funds and we have partnered with Box Elder County and Neighborhood Non-Profit to complete some great projects, which are listed in the report.
b. Tremont Center Community Development Project Area
1. Tremont Center, LLC:
The taxing entities consented to a 15 year project life for the Tremont Center CDA, or $4.3 million, whichever occurs first, because it is a pretty aggressive project for the Tremonton market. The RDA gets 75% of new growth and the other 25% will be returned to the taxing entities.
We hope in the end there will be increment for the RDA to help improve Main Street in general but at this specific site there was a big canal that has acted as a mote between Main Street and where this retail development was going to occur so the developer put in a box culvert the entire length of the frontage along with burying power lines. The first increment that is being received is being returned to the developer who is making the investment and installing the infrastructure.
There is also a building on Main Street that had been vacant for at least two years and has since been redeveloped and broke up into several smaller store fronts, which is in the project area and has been a great success and is helping to revitalize the area and add value and increment.
We are two years into this project area. The first year this project area was at $31k based upon the partial assessment of some of the development. It is now at $91k in 2017 so in total $123k has been returned to the developer. This project area has a cap of 15 years or $4.3 million, whichever occurs first, based upon the project area budget. Director Warnke stated the forecasted funds versus the funds we have actually received these two years are pretty close. The forecasted funds start to climb real steeply, while the developer has some projects on line, we do not believe we will meet that.
The developer is working on apartments as part of the development but the thing we are finding is that the construction costs between here and Salt Lake are relatively the same, but the rent is not the same and the developer is having a hard time filling that gap between his investment and the return on that investment. The developer has about $43 million associated with anticipated investment in the apartments. But the developer will also be pulling a building permit soon for a 6,000 square foot retail space.
Mitch Zundel asked if there is still a need for apartments and a demand for them that is not being filled. Director Warnke said there is. Mitch Zundel wondered if we should be using some of the affordable housing funds for this project to help bridge the gap. Director Warnke said the hard part is that would create a lot of reporting requirements and it is not that significant of a cost to the overall project so in the end we felt it would not be a benefit.
Steve Carlsen asked what kind of units the proposed housing is. Director Warnke said what is nice about the project is it is a little different housing product and gives a little variety. Along with that type of density, there is a lot of amenities; club house, swimming pool, recreation, etc. We are hoping to use this as a catalyst to improve the area and improve Tremonton with a little higher end housing with the amenities and even the architecture.
Mayor Fridal asked if there were any questions. Mitch Zundel thanked Director Warnke for his work and the thoroughness of the reports.
5. 2017 Annual Agency Reports – Shawn Warnke (Item 4 and 5 were discussed together)
a. West Liberty Foods Economic Development Area
b. Tremont Center Community Development Project Area
6. Discussion and information pertaining to a clerical error associated with the base year values contained in the Tremont Center Community Development Project Area Interlocal Agreement with each Taxing Entity and the RDA’s request to amend the interlocal agreement to remedy the error – Dustin Ericson, RDA Attorney
Director Warnke said there was a clerical error as it relates to the Tremont Center CDA and asked Attorney Dustin Ericson to walk the committee through it. Attorney Ericson said what happened is in an agreement the Tremonton RDA had with each of the taxing entities, the figures that were contained in that agreement, one for the total base year value of the area and the other for the annual revenues, were swapped. However, the exhibit accurately called out the base year amount versus the annual revenues the figures were just swapped in the actual agreement. We have a proposed amendment to each of those agreements, which is just a page or two and it just calls out that change.
Attorney Ericson said the amendment has no real substantive effect on the agreement, it was only a clerical error and the attached exhibits had the correct amounts in the correct spots. Director Warnke said the County Auditor has been distributing the revenue based on the correct agreement otherwise there would be a huge amount of increment flowing to the RDA. We do want to correct it so someone doesn’t look back and wonder why we haven’t been receiving more increment.
Attorney Ericson said based on the Code associated with local government entities, and also based on our prior agreement, there is not a need for any public input and it is a situation where the taxing entities, if they so choose, can take this amended agreement before their executive director for approval where it was just a clerical error and not something substantive that has changed. Rod Cook clarified that tax increment has been distributed based on the correct numbers and there doesn’t need to be a change in distribution. Director Warnke said it has been distributed correctly.
Von Hortin asked if a motion is needed from the Board of Education for this change. Attorney Ericson said it does not require legislative action, just a signature from someone in authority. Von Hortin said he will need to take this agreement before the Board. Director Warnke said we did not draft an amended agreement up for the State. Attorney Ericson said we will have to use a different vehicle for the State as this was drafted as an amendment to the interlocal agreement signed with the local taxing entities and the State was not a signatory on any of the agreements we had. Director Warnke asked about having the State countersign on the agreement with the School District. Attorney Ericson said that would work if the State is comfortable with that or put an “approved as to form and content” by the State on the agreement. Director Warnke asked Von Hortin what he would like us to do. Von Hortin asked Attorney Ericson to email him the agreement as he suggested with the “approved as to form and content” signature line.
7. Questions or comments from TEC Committee members
There were no questions or comments.
8. Adjourn
Motion by Steve Carlsen to adjourn the meeting. Seconded by Von Hortin. Vote: Rod Cook – aye, Steve Carlsen – aye, Mitch Zundel – aye, Von Hortin – aye, and Mayor Roger Fridal – aye. Motion approved.
The 2018 Taxing Entity Committee Meeting adjourned at 11:50 a.m.
The undersigned duly acting and appointed secretary for the Taxing Entity Committee hereby certifies that the foregoing is a true and correct copy of the minutes of the Taxing Entity Committee Meeting held on the above referenced date. Minutes were prepared by Linsey Nessen.
Dated this 25th day of June, 2019.
____________________________
Linsey Nessen, Secretary