Transmittal - 6/30/2022DEPARTMENT of ECONOMIC DEVELOPMENT
ERIN MENDENHALL
MAYOR
BEN KOLENDAR
DIRECTOR
CITY COUNCIL TRANSMITTAL
_______________________ Date Received: ___________
Lisa Shaffer, Chief Administrative Officer Date sent to Council: ___________
__________________________________________________________________
TO: Salt Lake City Council DATE: June 28, 2022
Dan Dugan, Chair
FROM: Ben Kolendar, Director - Department of Economic Development
SUB JECT: Sugar House Special Assessment Area (SAA) Due Diligence Findings
STA FF CONTACTS:
Will Wright, Project Manager - William.wright@slcgov.com,
Lorena Riffo Jenson, Deputy Director - lorena.riffojenson@slcgov.com
DOCUMENT TYPE: Information item
RECOMMENDATION : NA
BUD GET IMPACT: None.
COORDINATION: Representatives from the following entities: Department of Economic
Development, Zions Public Finance, Inc., Sugar House Chamber and Community Alliance
BACKGROUND/DISCUSSION: In Fall of 2021, the Department of Economic Development
(DED) received a request from the Sugar House Chamber and Community Alliance regarding the
creation of an economic promotion special assessment area (SAA) for the Sugar House area. In
FY22, budget amendment #4, the City Council allocated $60,000 to cover costs associated with
the research and feasibility of a special assessment within Sugar House.
Since receiving the request, staff members from the Department of Economic Development have
convened meetings with representatives from the Sugar House Chamber & Community Alliance
(Alliance) and Zions Public Finance (Zions), to discuss the overall process and review potential
scenarios for an assessment area. Zions provided three potential base-rate scenarios to the Sugar
House Chamber and Community Alliance. In each of the scenarios the boundaries remain the
same, due to the majority of the areas outside the boundaries being heavily residential and lacking
in commercial properties.
6/30/2022
6/30/2022
Lisa Shaffer (Jun 30, 2022 07:56 MDT)
Sugar House Area map/boundaries
(Ramona Avenue on the north, 1300 East on the east, I-15 on the south down to Fairmont Park
to Sugarmont Drive and then Sugarmont Drive to 900 East and then Simpson Avenue down to
700 East, and 700 E on the west.)
Potential Base Rate Scenarios
SUGAR HOUSE
ASSESSMENT
SCENARIO 1 SCENARIO 2 SCENARIO 3
TAXABLE VALUE $457,820,800 $457,820,800 $457,820,800
ASSESSMENT RATE .00142 .00060 .00225
ASSESSMENT AMOUNT
GENERATED
$650,000 $274,000 $1,030,000
INITIAL ADMINISTRATIVE FEE
EXPENSES (ONE-TIME FIXED
COSTS)
$208,000 $208,000 $208,000
3% RESERVE
WITHHELD /CONTINGENCY
$19,000 $8,000 $30,000
FINAL BUDGET $423,000 $58,000 $792,000
The Sugar House Chamber & Community Alliance representatives have reviewed each of the
scenarios and prefer Scenario 3. They expressed revenues in Scenarios 1 and 2 would be
insufficient to manage and operate an economic promotion area. Furthermore, the Alliance
believes that an assessment rate of 0.00225 is acceptable to Sugar House commercial property
owners, however at increasing rates, the support from property owners would likely wane.
Please note that $60,000 would be deducted from $208,000 Administrative fees to reimburse the
City’s General Fund, that was allocated in FY22, Budget Amendment #4.
Secondary Assessment: Specialty Lighting
Due to the regulations of State code, taxable value cannot be the sole assessment method and a
secondary assessment is required. The CBIA has, since its inception in the 1990’s, implemented a
secondary (holiday/specialty lighting) assessment based on the linear frontage of participating
parcels. The Alliance has indicated to DED that they would like the same for Sugar House and
that, indeed, holiday and specialty lighting is a primary motivating factor for the business and
property owners in the Sugar House area for an assessment area.
Zions has provided multiple scenarios for a lighting assessment that satisfies the secondary
assessment required by Utah code, including two possible lighting boundary maps and three rate
options.,
Sugar House Lighting Assessment Map/Boundaries
Option A
(Along 2100 South from 800 East to 1300 East and along 1100 East from Ramona Avenue to
Stringham Avenue.)
OPTION A COMPARATIVE FEE RATES , REVENUES G ENERATED AND IMPACTS FOR DECORATIVE LIGHTING
ANNUAL 3 YEARS
DESCRIPTION F RONTAGE LINEAR FEET
(LF)
F EE PER
LF
REVENUES
GENERATED F EE PER LF REVENUES
GENERATED
SLC
COMPARATIVE
TAX RATE
7,468 $4.26 $31,837 $12.79 $95,512
10% INCREASED
FEE 7,468 $4.69 $35,021 $14.07 $105,063
20% INCREASED
FEE 7,468 $5.12 $38,205 $15.35 $114,614
Option B
(Along 2100 South from 700 East to 1300 East and along 1100 East from Ramona Avenue to I-
80.)
OPTION B COMPARATIVE FEE RATES , REVENUES G ENERATED AND IMPACTS FOR DECORATIVE LIGHTING
ANNUAL 3 YEARS
DESCRIPTION F RONTAGE LINEAR FEET
(LF)
F EE PER
LF
REVENUES
GENERATED F EE PER LF REVENUES
GENERATED
SLC
COMPARATIVE
TAX RATE
10,688 $4.26 $45,566 $12.79 $136,698
10% INCREASED
FEE 10,688 $4.69 $50,123 $14.07 $150,368
20% INCREASED
FEE 10,688 $5.12 $54,679 $15.35 $164,038
The lighting tables above have been taken from Zions proposal and provided to illustrate how an
increase of 10% and 20% respectively to the $12.79/linear foot of frontage that the CBIA currently
assesses for holiday/specialty lighting, would affect the assessment for both option A and option B.
Conclusion
The Sugar House Chamber and Community Alliance’s preferred base rate assessment is Scenario 3,
with a rate of 0.00225, and a final budget of $702,000 for the 3 -year assessment period. The
Alliance’s preferred holiday/specialty lighting assessment Option A with an assessment of
$12.49/linear foot of frontage. They prefer the $12.49 as a baseline because it is what is paid by
downtown property owners for the CBIA-22 lighting assessment. Ultimately, any lighting
assessment would be determined by the cost of the lighting contract chosen by the entity selected
to manage the Sugar House Assessment Area.
The creation of an assessment area is a lengthy and complex process that is governed by State law,
has numerous noticing provisions, public hearings, and other requirements that involve a variety
of City Council actions over an approximately one-year period to meet various deadlines and
requirements of the “Assessment Area Act” (Utah Code Chapter 11-42).
Relevant Statutes and Ordinances
The definition of "economic promotion activities" in the SAA statute, Utah Code Section
11-42- 102(18) is as follows:
(18) "Economic promotion activities" means activities that promote economic growth in a
commercial area of a lo cal entity, including:
(a) sponsoring festivals and markets.
(b) promoting business investment or activities.
(c) helping to coordinate public and private actions; and
(d) developing and issuing publications designed to improve the economic well-being of
the commercial area.
The creation of an assessment area is a significant administrative undertaking for the City and
requires significant involvement in the form of staff time and resources from multiple City
departments; with the majority of the heavy lifting for an Economic Promotion Assessment Area
falling on the Department of Economic Development.
Over the past few years, the Department of Economic Development has been charged with
shepherding the Economic Promotion assessment process. Each time, the Department’s limited
staff members are pulled from other priorities to run the process.
If the City Council decides to proceed with the creation of a Sugar House Assessment Area, the
Department of Economic Development staff can begin setting the tentative 10 to 15-month
timeline and determine staffing and resources to lead the process.
If the Council decides to proceed with a scenario provided, the Administration will work with the
City Attorney’s Office and Bond Counsel on a notice of intent that captures the information
contained in the selected scenario. The Council may wish to have small group meetings as a next
step to determine if any of the scenarios might be modified to meet other policy objectives of the
Council. If the Council chooses not to proceed with the Sugar House Special assessment area, staff
will notify the Sugar House Chamber and Community Alliance of the decision.