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Some Answers to Questions asked about the North Logan Community Development Area (CDA) Plan
Q. What will the tax increment money be used for? A. The current CDA plan would include the purchase of land (about 6 to 8 acres) for the Hotel Conference Center, the land for the Village Green (about 4 to 5 acres to be owned as city park land), the construction of some infrastructure in the area including half the cost of water and sewer lines and about three-fourths the cost of roads in the area. The rest of the cost for the infrastructure would come from impact fees. The plan also includes some “overhead” types of costs for the CDA including some design work and financing costs in the event that a bond is needed to up front the installation of the infrastructure or the purchase of the property.
Q. Will the tax increment be used to help entice retail business into the area such as another “big box” for North Logan? A. No. The concept plan for the 100+ acres includes modifying the zones for the area to one of two “Mixed Use Zones”. The North Logan City Council recently changed the zone of the area to a mixed use zone, would exclude any big box from the CDA designated land. A bog box is not what NLC wants in this area, especially not in the 40 acres of the City Center. It is intended that the area will eventually include some retail businesses but no incentives are planned for any businesses other than the land for the hotel conference center.
Q. Will property taxes be rebated or deferred on the properties within the CDA when those properties are developed? A. No. The property taxes will be paid by the businesses and other property owners of the area. Once the taxes are paid by the property owners, whether the land stays undeveloped as it is now or whether it is fully developed as planned, the County then distributes the taxes paid thusly: 1. The property taxes currently being collected on the undeveloped property will continue to go to the School District, Cache County, North Logan City and the Mosquito Abatement District as they do now. 2. 50% of the taxes generated due to new growth, but only when and if the property is developed, will be additional taxes sent to the School District and Cache County. 3. 50% of the taxes generated due to new growth, when and if the property is developed, will be available for use by the Redevelopment Agency to invest in accordance with the plan (i.e. for some land, sewer and water mains, and some roads).
Q. If this is such a good project, why does the development need any public funds at all? A. There are many reasons which have led North Logan officials and staff to conclude that if not for some public participation, this development would not occur. Such as: 1. North Logan essentially has a hole in its development between what is on along Main and the residential development that has occurred east of about 400 or 600 East. The hole is not just a lack of development of the properties but it is also a hole in the development of infrastructure in this area – roads plus water and sewer lines. It is doubtful that any developer would develop anything of significance in this area if they had to put in their own infrastructure, perhaps bringing it from several blocks away. 2. The types of things NLC wants to see in this area need to feed off each other. Building a walkable community center, with retail shops, some service businesses, some apartments and condos, and restaurants, will work best if they all go in at roughly the same time. Leaving a restaurant out in the middle of a field for several years, until things grow up around it, would not help make that restaurant successful. 3. The hotel and conference center is the key to bringing to this area that which will really make it work. Without that, some other anchor would need to be found. It would need to be an anchor that brings in customers from outside the valley who want to shop, eat, and enjoy downtown North Logan. A hotel conference center makes sense in this location between the Innovation Campus and the airport. That’s why the market analysis for this type of development turned out so positively - positive enough to attract Hilton Hotels. With the CDA paying for the land for the hotel and conference center, it makes their numbers work out so their debt ratio matches what they need to get the financing for the project. 4. Bottom line here is that the plan may happen without this “kick start” but it would take years to accomplish it. It would be years before it would generate even a portion of the property taxes that will still flow to the school district and the county under the CDA. 50% of something this big – now, is much greater than 100% of nothing or something smaller drawn out into several years in the future.
Q. What criteria should the school district and/or the county use to determine whether or not to support a CDA in one city versus another? A. Support for a CDA or any other type of tax increment financing need not be a decision to choose one city over another, or one project over another. The following criteria are possible points upon which such a decision could be made: 1. Does the project make financial sense, both in the short term as well as the long term? 2. Will the taxing entities gain more by supporting the project than by not doing it at all? 3. Does the project benefit other cities and the county as a whole? 4. Would the project happen as planned, both in time and with the same degree of chances for success, without the assistance of the tax increment? 5. Does the project place an undue burden on the public entities that overshadows the revenue generated by the project? Is the project going to be a drain on the school system, the county, or the city without its generating sufficient new revenue to pay for needed support services?
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