Salt Lake City board vents after receiving developers' $51M tax incentives request

KEY TAKEAWAYS

• Salt Lake City officials express concern over $51 million tax incentives requested for the Silo Park project.
• Its developers seek waivers from sustainable development requirements, citing constraints.
• Community Reinvestment Agency board debates potential adjustments to ensure fewer policy waivers.

SALT LAKE CITY — Leaders of Utah's capital city appeared less than thrilled when a developer who was recently punished over a demolished historic building submitted a request to receive incentives on another much larger project.

Blaser Ventures and Lowe Property Group submitted a tax incentives request for their Silo Park project last week, seeking 90% reimbursement from tax increments over the next 25 years, which translates to more than $51.5 million of the $58.4 million increase anticipated over that time.

However, members of the Salt Lake City Community Reinvestment Agency board, who are all members of the Salt Lake City Council, spent most of a discussion on the application Tuesday talking about a pair of waivers the developers requested, which turned into debates over potential agreement process adjustments.

"There are a lot of concerning things yet again from what I see," said board member Alejandro Puy, who is also chairman of the City Council.

Seeking incentives

The controversy stems from a piece of the request Blaser and Lowe filed with the Reinvestment Agency last week for a project that is already underway. Their plan calls for the redevelopment of 8.2 acres between 400 West and 500 West and by 500 South and 600 South in the Granary District southwest of downtown. It would add over 1 million square feet of development planned out to be built over five phases.

The first two phases, featuring an 180-unit affordable housing complex, a 65-unit market-rate housing complex, and a small park, are under construction. Another 495 market-rate and workforce housing units are planned for future phases, along with a hotel and 31,000 square feet of commercial space. All of it is being constructed around historic silos that are to be preserved.

Blaser Ventures and Lowe Property Group announced last month that they had inked an agreement with Texas-based Free Range Concepts to bring the Rustic and Bowl & Barrel restaurant brands to the space.

The full buildout is estimated to cost approximately $390 million, but it falls within a housing and transit reinvestment zone, or HTRZ, that unlocks potential incentives to help ease costs for public benefits included in developments. This helps support affordable housing, other residential costs, infrastructure and parking that is included in the project.

Developers can receive up to 90% of any bumps to property value created by their project, which, in this case, is "essential to bridging the financial gap and securing the long-term success of the project," Blaser and Lowe wrote in the request to the city. There is a funding gap of about $22 million at the moment, they added.

The companies also requested waivers to bypass parts of the city's sustainable development incentive requirements for city funds.

One would allow for gas cookstoves in commercial kitchens, gas amenities within residential common areas and gas water heating in commercial and nearly three-quarters of the housing units. All-electric construction, the companies said, would add $500,000 to the total project, adding new budget constraints.

"(It's) an increase that was not economically viable given the significant funding gap the project was already navigating," they wrote, adding that some of the gas features requested creates better marketability of the area.

The other seeks to waive a net-zero emissions requirement, citing a lack of rooftop space for solar panels for the whole development. They proposed participating in Rocky Mountain Power's Blue Sky and Salt Lake City's Community Clean Energy programs — a pair of renewable energy programs — to offset many of the anticipated energy costs.

Despite these waivers, the company said it would also commit to 30 electric vehicle charging stations, and 96 EV-ready stalls, along with electric-ready commercial kitchens, drought-tolerant landscaping, bike lanes and pedestrian pathways.

The group also requested a "timely review," writing that it's "critical to maintaining project momentum and securing the necessary financing."

The city's concerns

Puy quickly took issue with the proposed waivers, though, pointing out that the sustainable development incentive requirements were in place well before any construction began.

"We have a policy on the books; the developer decided to ignore it," he said. "(They're) coming to us asking us for a waiver of the policy after the fact, and saying, 'Give me all of the money.' ... I struggle with it yet again, especially knowing the track record."

The debate brought flashbacks to another Blaser Ventures project.

Board members voted in April to allow for a 90% reimbursement on tax increments for up to 15 years on the Pickle & Hide project, but reduced the maximum reimbursement rate cap by $1 million after the historic Utah Pickle Company was demolished without board approval. The reduction covered benefits that would have been given to preserve the building, which was ultimately rebuilt to resemble the historic building.

Others on the board said the situation isn't the same, but they see the concerns. They believe it's a sign to make incentive rules clearer, so developers know that they will receive fewer incentives if they don't meet certain requirements.

"That means we stipulate a lot more clearly in any negotiation and we come to the table with things much more clearly," said Councilwoman Victoria Petro. "And we make it so that under no condition in any place where there is a vacuum of information or authority do we create a structure where asking for forgiveness rather than permission is ever the best course."

The next steps

While it wasn't clear what that could look like, the city ought to avoid creating a precedent for other developers or projects to bypass certain requirements, said Councilwoman Sarah Young.

The board can include language that penalizes incentives if terms aren't met, said Danny Walz, director of the Reinvestment Agency. It's up to the city to determine how far the punishments might go to clarify those steps. City documents show a potential incentive reduction of $500,000 to over $5.5 million, if certain elements are found noncompliant.

Councilman Dan Dugan, who also serves as the board's chair, said the Reinvestment Agency is working on a response to the request, while it potentially addresses gaps in policy and communication. There's no timeline for its decision.

"If you want this to happen quickly, respond quickly and we'll get back to you in a timely fashion because we don't like to sit around either," he said.

The Key Takeaways for this article were generated with the assistance of large language models and reviewed by our editorial team. The article, itself, is solely human-written.

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Carter Williams

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Carter Williams is a reporter for KSL. He covers Salt Lake City, statewide transportation issues, outdoors, the environment and weather. He is a graduate of Southern Utah University.