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AMENDED PROJECT AREA BUDGET OLYMPUS HILLS COMMUNITY REINVESTMENT AREA (CRA) MILLCREEK COMMUNITY REINVESTMENT AGENCY, UTAH JANUARY 22, 2024 [FINAL ADOPTED VERSION] ---PAGE BREAK--- Page I 2 Table of Contents TABLE OF CONTENTS 2 SECTION 1: INTRODUCTION 3 SECTION 2: DESCRIPTION OF COMMUNITY DEVELOPMENT PROJECT AREA 3 SECTION 3: GENERAL OVERVIEW OF AMENDED PROJECT AREA BUDGET 4 SECTION 4: PROPERTY TAX INCREMENT 5 SECTION 5: COST/BENEFIT ANALYSIS 7 EXHIBIT A: PROJECT AREA MAP 8 EXHIBIT B: MULTI-YEAR BUDGET 9 ---PAGE BREAK--- Page I 3 Section 1: Introduction The Millcreek Community Reinvestment Agency (the “Agency”), following thorough consideration of the needs and desires of the City of Millcreek (the “City”) and its residents, as well as understanding the City’s capacity for new development, has carefully crafted the Amended Project Area Plan (the “Amended Plan” or “Amended Project Area Plan”) for the Olympus Hills Community Reinvestment Project Area (the “Project Area”). The Amended Plan is the result of a comprehensive evaluation of the types of appropriate land-uses and economic development opportunities for the land encompassed by the Project Area which includes land east of Interstate 215 East along Wasatch Blvd near the freeway interchange. The Amended Plan is envisioned to define the method and means of development for the Project Area from its current state to a higher and better use. The City has determined it is in the best interest of its citizens to assist in the development of the Project Area. This Amended Project Area Budget document (the “Amended Budget”) is predicated upon certain elements, objectives and conditions outlined in the Amended Plan and intended to be used as a financing tool to assist the Agency in meeting Amended Plan objectives discussed herein and more specifically referenced and identified in the Amended Plan. The creation of the Project Area is being undertaken as a community reinvestment project pursuant to certain provisions of Chapters 1 and 5 of the Utah Community Reinvestment Agency Act (the “Act”, Utah Code Annotated (“UCA”) Title 17C). The requirements of the Act, including notice and hearing obligations, have always been observed throughout the establishment of the Project Area. Section 2: Description of Community Development Project Area The Project Area includes land east of Interstate 215 East along Wasatch Blvd near the freeway interchange. The Project Area is comprised of approximately 42 acres of property. A map of the Project Area is attached hereto in EXHIBIT A. ---PAGE BREAK--- Page I 4 Section 3: General Overview of Amended Project Area Budget The purpose of the Amended Project Area Budget is to provide the financial framework necessary to implement the Project Area Amended Plan vision and objectives. The Amended Project Area Plan has identified that tax increment financing is essential to meet the objectives of the CRA Project Area. The following information will detail the sources and uses of tax increment and other necessary details needed for public officials, interested parties, and the public in general to understand the mechanics of the Amended Project Area Budget. Base Year Value The Agency has determined that the base year property tax value for the Project Area will be the total taxable value for the 2017 tax year which is estimated to be $3,768,320. Using the tax rates established within the Project Area the property taxes levied equate to $56,412 annually. Accordingly, this amount will continue to flow through to each taxing entity proportional to the amount of their respective tax rates being levied. Payment Trigger The Project Area will have a twenty-year (20) duration from the date of the first tax increment received by the Agency. The collection of tax increment will be triggered at the discretion of the Agency prior to March 1 of the tax year in which they intend to begin the collection of increment. The following year in which this increment will be remitted to the Agency will be Year 1, e.g., if requested prior to March 1, 2023, Year 1 of increment will be 2024. The Agency anticipates it will trigger tax increment by March 1, 2026, but in no case will the Agency trigger the first year of tax increment collection after March 1, 2027. Projected Tax Increment Revenue – Total Generation Development within the Project Area will commence upon favorable market conditions which will include both horizontal and vertical infrastructure and development. The Agency anticipates that new development will begin in the Project Area in 2020. The contemplated development will generate significant additional property tax revenue as well as incremental sales and use tax above what is currently generated within the Project Area. Property Tax Increment will begin to be generated in the tax year (ending Dec 1st) following construction completion and Tax Increment will be paid to the Agency in March or April after collection. It is projected that property Tax Increment generation within the Project Area could begin as early as 2025 or as late as 2027. It is currently estimated that during the 20-year life of the Amended Project Area Budget, property Tax Increment could be generated within the Project Area in the approximate amount of $4.56 million or at a net present value (NPV)1 of $3.21 million. This amount is over and above the $1.13 million of base taxes that the property would generate over 20 years at the $56,412 annual amount it currently generates as shown in Table 4.1 below. 1 Net Present Value of future cash flows assumes a 4% discount rate. The same 4% discount rate is used in all remaining NPV calculations. This total is prior to accounting for the flow-through of tax increment to the respective taxing entities. ---PAGE BREAK--- Page I 5 Section 4: Property Tax Increment Base Year Property Tax Revenue The taxing entities are currently receiving - and will continue to receive - property tax revenue from the current assessed value of the property within the Project Area (“Base Taxes”). The current assessed value is estimated to be $3,768,320. Based upon the tax rates in the area, the collective taxing entities are receiving $56,412 in property tax annually from this Project Area. This equates to approximately $1,128,235 over the 20-year life of the Project Area. TABLE 4.1: TOTAL BASE YEAR TO TAXING ENTITIES (OVER 20 YEARS) Entity Total NPV at 4% Salt Lake County $152,617 103,706 Salt Lake County Library 42,130 28,628 Granite School District 589,516 400,586 Millcreek City 151,637 103,040 South Salt Lake Valley Mosquito Abatement District 1,130 768 Mt. Olympus Improvement District 21,027 14,288 Central Utah Water Conservancy District 30,147 20,485 Unified Fire Service Area 140,031 95,153 Total Revenue $1,128,235 $766,654 Property Tax Increment Shared with RDA It is anticipated that Salt Lake County will not participate in the Amended Project Area Budget, but all other taxing entities will participate. Specifically, Granite School District will participate at 75% for a 15-year period, Millcreek City for 90% for a 20-year period, and other taxing entities at a 65% for a 20-year period, as depicted below in Table 4.2. The City, County and the State will not contribute any portion of their incremental sales tax to implement the Amended Project Area Plan. Table 4.2 shows the amount of Tax Increment shared with the Agency assuming the participation levels discussed above. TABLE 4.2: SOURCES OF TAX INCREMENT FUNDS Entity Percentage Length Total NPV at 6.5% Salt Lake County 0% - $ - $ - Salt Lake County Library 0% - - - Granite School District 75% 15 Years 2,634,976 1,592,975 Millcreek City 90% 20 Years 987,986 524,129 South Salt Lake Valley Mosquito Abatement District 0% - - - Mt. Olympus Improvement District 65% 20 Years 92,324 48,978 Central Utah Water Conservancy District 0% - - - Unified Fire Service Area 65% 20 Years 649,214 344,409 Total Sources of Tax Increment Funds $4,364,500 $2,510,491 ---PAGE BREAK--- Page I 6 Uses of Tax Increment The Agency will use 5% of the tax increment to administer the CRA. Most of the remaining tax increment collected by the Agency will be used for redevelopment activities in the Project Area Including: offsetting certain on-site public infrastructure costs, land assemblage, development incentives, Agency requested improvements and upgrades, desirable Project Area improvements, and other redevelopment activities as approved by the Agency. The remaining 10% will go towards affordable housing, as required by the Act. TABLE 4.3: USES OF TAX INCREMENT Uses Total NPV at 6.5% Redevelopment Activities $3,709,825 $2,133,917 CRA Housing Requirement 436,450 251,049 Project Area Administration 218,225 125,525 Total Uses of Tax Increment Funds $4,364,500 $2,510,491 A multi-year projection of tax increment is including in EXHIBIT B. Total Annual Property Tax Revenue for Taxing Entities at Conclusion of Project As described above, the collective taxing entities are currently receiving approximately $56,412 in property taxes annually from this Project Area. At the end of 20 years an additional $458,398 in property taxes annually is anticipated, totaling approximately $514,812 in property taxes annually for the area. “But for” the assistance provided by the Agency through tax increment revenues, this greater than 700 percent increase in property taxes generated for the taxing entities would not be possible. TABLE 4.4: TOTAL BASE YEAR AND END OF PROJECT LIFE ANNUAL PROPERTY TAXES Entity Annual Base Year Property Taxes Annual Property Tax Increment at Conclusion of Project Total Annual Property Taxes Salt Lake County $7,631 $58,016 $65,647 Salt Lake County Library 2,106 15,349 17,455 Granite School District 29,476 250,950 280,426 Millcreek City 7,582 57,777 65,359 South Salt Lake Valley Mosquito Abatement District 57 358 415 Mt. Olympus Improvement District 1,051 7,476 8,527 Central Utah Water Conservancy District 1,507 15,906 17,413 Unified Fire Service Area 7,002 52,568 59,570 Total Revenue $56,412 $458,398 $514,812 ---PAGE BREAK--- Page I 7 Section 5: Cost/Benefit Analysis Additional Revenues Other Tax Revenues The development within the Project Area will also generate sales taxes for the City and County. Table 5.1 shows the total revenues generated by the Project Area. This total includes the anticipated property tax increment and sales and use tax. TABLE 5.1 TOTAL REVENUES Entity Property Tax Sales Tax Total Revenues Salt Lake County (Including Library) $1,393,924 $4,700,520 $6,094,444 Granite School District 4,768,052 - 4,768,052 Millcreek City 1,097,762 9,401,039 10,498,801 South Salt Lake Valley Mosquito Abatement District 6,800 - 6,800 Mt. Olympus Improvement District 302,206 - 302,206 Central Utah Water Conservancy District 142,037 - 142,037 Unified Fire Service Area 998,790 - 998,790 Total Revenues $8,709,571 $14,101,559 $22,811,130 Additional Costs The development anticipated within the Project Area will also likely result in additional general government, public works, and public safety costs. These costs, along with the estimated budget to implement the Amended Project Area Plan, are identified below. TABLE 5.2 TOTAL EXPENDITURES Entity CRA Budget General Government Public Works Public Safety Total Expenditures Salt Lake County (Including Library) $ - $39,158 $ - $ - $39,158 Granite School District 2,634,976 384,500 - - 3,019,476 Millcreek City 987,986 190,836 224,965 405,414 1,809,201 South Salt Lake Valley Mosquito Abatement District - 542 - - 542 Mt. Olympus Improvement District 92,324 25,715 - - 118,039 Central Utah Water Conservancy District - 15,966 - - 15,966 Unified Fire Service Area 649,214 64,275 - - 713,489 Total Expenditures $4,364,500 $720,992 $224,965 $405,414 $5,715,871 The total net benefit to the taxing entities participating in the Project Area is $17,095,259, with the City’s net benefit being $8,689,600. ---PAGE BREAK--- Page I 8 Exhibit A: Project Area Map ---PAGE BREAK--- Page I 9 Exhibit B: Multi-Year Budget ---PAGE BREAK--- Millcreek Community Reinvestment Agency ASSUMPTIONS: Olympus Hills CRA Discount Rate 6.500% Tax Increment and Amended Project Area Budget Analysis Amended - JANUARY 22, 2024 Payment Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Tax Year 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 TOTALS NPV Cumulative Taxable Value Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Porsche Development Dealership - 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 19,763,918 Adjacent Project (Class A Office - 40,000 SF) - 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 Residential - - - - - - - - - - - - - - - - - - - - Total Assessed Value: - 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 Value of Current Property 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 1,264,300 Less Base Year Value (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) (1,264,300) TOTAL INCREMENTAL VALUE: - 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 39,763,918 TAX RATE & INCREMENT ANALYSIS: 2022 Rates Salt Lake County 0.001459 - 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 1,102,296 584,770 Salt Lake County Library 0.000386 - 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 291,629 154,710 Granite School District 0.006311 - 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 250,950 4,768,052 2,529,461 Millcreek City 0.001453 - 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 57,777 1,097,762 582,365 South Salt Lake Valley Mosquito Abatement District 0.000009 - 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 6,800 3,607 Mt. Olympus Improvement District 0.000188 - 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 7,476 142,037 75,351 Central Utah Water Conservancy District 0.000400 - 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 302,206 160,321 Unified Fire Service Area 0.001322 - 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 52,568 998,790 529,860 Totals: 0.011528 - 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 8,709,570 4,620,446 TOTAL INCREMENTAL REVENUE IN PROJECT AREA: - 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 458,398 8,709,570 4,620,446 PROJECT AREA BUDGET 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Sources of Funds: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 TOTALS NPV Property Tax Participation Rate for Budget Salt Lake County 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Salt Lake County Library 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Granite School District 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 0% 0% 0% 0% 0% Millcreek City 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% South Salt Lake Valley Mosquito Abatement District 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Mt. Olympus Improvement District 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% Central Utah Water Conservancy District 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Unified Fire Service Area 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% 65% Property Tax Increment for Budget Salt Lake County - - - - - - - - - - - - - - - - - - - - - - Salt Lake County Library - - - - - - - - - - - - - - - - - - - - - - Granite School District - 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 188,213 - - - - - 2,634,976 1,592,975 Millcreek City - 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 51,999 987,986 524,129 South Salt Lake Valley Mosquito Abatement District - - - - - - - - - - - - - - - - - - - - - - Mt. Olympus Improvement District - 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 92,324 48,978 Central Utah Water Conservancy District - - - - - - - - - - - - - - - - - - - - - - Unified Fire Service Area - 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 34,169 649,214 344,409 Total Property Tax Increment for Budget: - 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 91,028 91,028 91,028 91,028 91,028 4,364,500 2,510,491 Uses of Tax Increment Funds: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 TOTALS NPV Redevelopment Activities (Infrastructure, Relocation, 85.0% - 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 237,354 77,373 77,373 77,373 77,373 77,373 3,709,825 2,133,917 CRA Housing Requirement 10.0% - 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 27,924 9,103 9,103 9,103 9,103 9,103 436,450 251,049 RDA Administration 5.0% - 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 13,962 4,551 4,551 4,551 4,551 4,551 218,225 125,525 Total Uses - 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 279,240 91,028 91,028 91,028 91,028 91,028 4,364,500 2,510,491 REMAINING TAX REVENUES FOR TAXING ENTITIES 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 TOTALS NPV Salt Lake County - 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 58,016 1,102,296 584,770 Davis County Library - 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 15,349 291,629 154,710 Granite School District - 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 62,738 250,950 250,950 250,950 250,950 250,950 2,133,076 936,486 Millcreek City - 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 5,778 109,776 58,237 South Salt Lake Valley Mosquito Abatement District - 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 358 6,800 3,607 Mt. Olympus Improvement District - 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 2,616 49,713 26,373 Central Utah Water Conservancy District - 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 15,906 302,206 160,321 Unified Fire Service Area - 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 18,399 349,577 185,451 Total - 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 179,158 367,371 367,371 367,371 367,371 367,371 4,345,071 2,109,955 INCREMENTAL TAX ANALYSIS: Tax Increment Budget Milcreek CRA - Olympus Hills Multi Year Model_1.22.2024(Final).xlsx