University Place CDA
UNDERSTANDING THE FACTS OF THE UNIVERSITY PLACE REDEVELOPMENTThe University Mall is looking at a major redevelopment to create a “City Creek of the South” feel here in Orem. There are plans to build class A office space that will create approximately 2,500 new jobs in the community. There will be additional restaurants, retailers, new housing, an expansion of the movie theater, and much more. The empty Mervyn’s building and the existing parking lot will be replaced with office space and a wonderful park that can be enjoyed by all. If Woodbury is willing to invest their money in Orem, rather than take it elsewhere which they have been approached about, the City Council has made a decision to incentivize the development through the creation of a Community Development Area (CDA). Woodbury has been approached by other communities about alternative investment options and their willingness to give incentives, but the City Council realizes the benefit of having that investment in our community.
How the Money WorksThere will be no tax increase to any citizen or business in Orem. Woodbury currently pays approximately $1.6 million in annual property tax. Woodbury’s $500 million investment will increase the property value at University Place. As their property value goes up, so will their annual property tax payment. Woodbury will continue to pay the $1.6 million, as they do today, and will receive a 75% rebate on the additional property tax created with the new investment. The rebated property tax dollars will only be used for infrastructure needs (park, roads, utility replacement and upgrades, etc.). The other 25% will go to the School District, the City, and the County. At the end of the life of the incentive (20 years) 100% of the property tax will go to the respective taxing entities. The estimated annual property tax payment made by Woodbury will go from $1.6 million to approximately $6.5 million. The incentive only comes from their increased property tax. They City will keep 100% of the increased sales taxes and franchise taxes. the property taxes paid by any citizen or business will not be used as a part of the incentive. Below is a graph showing the tax breakdown over the 20 year proposed plan.
The Impact of this Development on the Alpine School DistrictWhile this development and incentive is a long-term investment in the vibrancy of our community, it is false to say that the Alpine School District is going to suffer because of the creation of a Community Development Area either in the short-term or the long-term. Woodbury is already making a $100 million investment in the University Place Development. However, with the incentive, Woodbury will make an additional $400 million investment for a total of $500 million. Below is a chart showing the difference between a $500 million investment, even with the use of a CDA, rather than a $100 million investment, without the use of a CDA, in terms of property tax revenue to the Alpine School District.
|$100 Million Investment (without a CDA)||$500 Million Investment (using a CDA)|
|Property tax revenue during years 2018-2038||$37,147,000||$37,377,000|
|Property tax revenue during years 2039-2059||$38,240,000||$92,004,000|
|Total Property Tax Revenue over the next 40 Years||$75,387,000||$129,381,000|
Here are the FACTS of what this CDA means to you
- Taxes will not be increased on any citizen or business in Orem because of this incentive;
- Woodbury will invest approximately $500 million of private money into a redevelopment of the University Mall;
- The development will receive incentives only if they build the planned development; the City takes no risk in this development;
- Even with incentives the City, and all taxing entities, will receive additional revenue above and beyond the incentive to help pay for the City’s general services (roads, public safety, parks, etc.);
- The City takes no risk because the incentives are paid out of new tax revenue created by the development’s increased property value;
- All of the incentives go towards facilities that the public will enjoy (roads, parks, better parking, utilities that the City would have had to pay to upgrade regardless);
- Creation of approximately 2,500 jobs within the City of Orem (currently companies are leaving Orem for other cities because they are being offered incentives to leave: Adobe, Attask, Xactware, DoTerra, and others);
- The sales tax base in Orem stays strong; that allows all of us to enjoy lower property taxes;
- The school district has stated that they anticipate a neutral impact in terms of students, so all of the revenue received in additional property tax will be able to support existing expenses;
- Simply, without the incentive the $400 million of the $500 million investment doesn’t happen in Orem. Other cities have offered the same incentive and redeveloping an area is much more expensive than developing an empty field.
- Council Presentation on 9/23/2014
- Video from the Council Meeting
- Project Budget
- Project Plan
- Legal and Financial Impacts
Letters of Support
Click on a community leader’s picture to read their letter of support.
|UVU President Matthew Holland||Orem Mayor Richard Brunst Jr.||Utah County Association of Realtors CEO Taylor Oldroyd||Governor’s Director of Economic Development Val Hale|
Provo Mayor John Curtis
“From my perspective, the University Place project is a rare opportunity for a city. Most municipalities would love to have this type of project. I applaud Orem and its leaders for using the State-allowed CDA tools to build the economic base vital to this important area.”
Support from the Chamber of Commerce