Glauser discussed the main idea of the project, stating that
it is about the replacement of the Central Business District Redevelopment area
established in the 1970s. The Redevelopment Agency’s ability to use tax increment
financing for this area will expire under Utah State law after 2015.
What is tax increment financing? According to Glauser, it is
a process used to “level the playing field” between suburban and urban
development sites. Glauser said tax increment financing is relevant when a
developer considers costs of a new project, and whether suburban areas will be
more attractive locations due to low cost of construction and development than
urban areas with higher costs. In order to encourage developers to build in
urban areas, and increase the tax base of those urban areas by increasing
property values, the Redevelopment Agency uses “tax increment financing” to
help make up for the cost differential that the developer will incur in
choosing to develop in an urban area.
This means that the four taxing entities which affect the
development (Utah County, Provo City, Provo School District, and Central Utah
Water) may pledge to use their share of new tax revenues generated by a project
in an urban area in its early years to offset the cost gap of developers
investing in an urban project.
“I want to emphasize that this is about renewing a tax
increment financing area which we've had from the 70s. It’s about responding to
new development opportunities. It has absolutely nothing to do with an
assessment or with raising taxes,” Glauser said. “It’s only about how tax
revenues from new developments may be used, and not about increasing the
development tax rate, or anyone else’s tax rate.”
Glauser also said that even after the Project Area Plan is
approved, nothing will change until or unless the affected taxing entities
agree to go forward with individual development deals. The proposed area for a new district will range from 600 W.
to 200 E. and from 100 N. to 100 S.
On June 18, a public hearing will be held on the proposed
Project Area Plan. The Council will also consider whether to adopt the Area
Plan. If the project area is approved, the Redevelopment Agency will then bring
specific development deals within the area to the four taxing entities for
their consideration and approval on a case by case basis.
If you have comments
for the Council about the proposed Project Area Plan let them know by
commenting here, or reaching them directly. You may also consider attendance at
the June 18 hearing.
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