Transmittal - 3/24/2023SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director
DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: March 24, 2023
PREPARED BY: Lauren Parisi, Marcus Lee, and Kate Werrett, RDA Project Managers
RE: Housing and Transit Reinvestment Zone (HTRZ) Creation
REQUESTED ACTION: Information Only – Review and discussion regarding HTRZ process
POLICY ITEM: Project Area Creation
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: In 2021, the State of Utah adopted Senate Bill 217 establishing the Housing
and Transit Reinvestment Zone (“HTRZ”) Act (“Act”). In 2022, the State amended the bill to include the
revisions set forth in Senate Bill 140. During the 2023 Legislative Session additional amendments to the
Act were adopted in Senate Bill 84. Intended to help address Utah’s severe housing crisis, this legislation
allows for municipalities to capture tax increment revenue around certain public transit facilities to facilitate
mixed-use, multifamily, and affordable housing development and, ultimately, a higher utilization of public
transit. This memo reviews HTRZ regulations, 2023 legislative updates, explores potential areas in Salt
Lake City where HTRZs could be implemented, and details the RDA HTRZ next steps.
ANALYSIS:
HTRZ Regulations.
In 2021, Senate Bill 217 adopted the Housing and Transit Reinvestment Zone Act (“Act”), establishing the
objectives and requirements to create HTRZs. The Act was updated in 2022 with the passing of Senate Bill
140 to clarify the process, requirements, and objectives of the HTRZs.
An HTRZ is a specific type of project area located adjacent to public transit intended to promote sustainable
mixed-use development, affordable housing, and public transportation. Up to 80% of incremental property
tax generated within the project area can be collected to promote these objectives.
1.General HTRZ Requirements. Project area requirements that apply to every HTRZ project area
include:
•Property Tax Maximum Increment Participation: 80%
•Housing
o Affordable Housing: At least 10% of housing units must be affordable to 80% AMI
households
o Must include a mixture of housing units to ensure a reasonable percentage of dwellings
with more than one bedroom
• Land Use: 51% of developable area must be residential
• Density: an average of 50 dwelling units per acre is required.
o There is a caveat that if a Bus Rapid Transit’s (“BRT’s”) tax increment collection is
reduced to 60%, its project area may have a reduced density of 39-49 dwelling units
per acre.
• Tax Increment Collection Cap: Determined by the proposal
• HTRZ Administration Fees: 1% of the HTRZ funds + cost to complete the gap analysis
described in 63N-3-604(2) of the Act.
2. Transit Stop Requirements. A unique difference between HTRZs and other types of projects
areas is that HTRZs must be established within a specified distance of a transit stop. The Act
provides requirements and limitations dependent on the type of transit stop an HTRZ encompasses.
Certain limiting factors are defined by the project area transit stops for commuter rail, light rail,
BRT, or those located within an Opportunity Zone.
Examples of varying allowances dependent on the type of transit stop include:
• Size of Project Area
• Maximum Acreage
• Term and Phase Length
• Number of HTRZ project areas per transit stop type allowed per county
The table below shows the differences between possible project areas within Salt Lake City.
FRONTRUNNER TRAX/S-LINE BRT OPPORTUNITY
ZONE
BOUNDARY DISTANCE FROM STATION
1/4 MILE X X
1/3 MILE X
1/2 MILE X (regardless of
transit type)
Note: Any parcels bisected by the radius boundary can be included in their entirety
MAXIMUM ACREAGE
NONCONTIGUOUS
ACRES 125 100 100 Dependent on
station type
TAX INCREMENT
TERM & PHASE
LENGTH
25 year phases
within a 45-year
period
15 year phases within a 30-year period Dependent on
station type
NUMBER OF HTRZ PROJECT AREAS ALLOWED PER COUNTY
HTRZs per County (#) Not defined 8 3 1
3. HTRZs Comparison with Community Reinvestment Areas (“CRAs’) – While similar to
existing tax increment project areas such as CRAs, HTRZs vary in some significant ways as
summarized in the table below. CRAs are subject to Title 17C of the Utah State Code.
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HTRZ CRA
Creation
• HTRZ proposal is submitted to the Governor’s
Office of Economic Opportunity
• State appointed HTRZ Committee
commissions a gap analysis and
reviews/approves proposal
• Survey Resolution adopted by the
Redevelopment Agency of Salt Lake
City’s (“RDA’s") Board of Directors
(“Board”)
• Project Area Plan & Budget Public
Hearing
• RDA Board adopts Plan & Budget
• City adopts ordinance approving the Plan
& Budget
Taxing
Entities
• Required taxing entity participation as agreed
to by the HTRZ Committee and formalized
with interlocal agreements
• Taxing entities may opt out of participation
• Participation is negotiated and established
with interlocal agreements
Tax
Increment • Participation Rate: up to 80% of property tax
increment
• Participation Rate: Property tax increment
as negotiated
RDA Board
Controls
• HTRZ goals/policy decisions
• Budgeting of funds
• Tax Increment Reimbursement Agreements
(TIRAs) & other development assistance
programs
• RDA Board reviews and approves CRA
creation and implementation throughout
the process
• Budgeting of funds
• Tax Increment Reimbursement
Agreements (TIRAs) & other development
assistance programs
NOTE: Other tax increment funding sources are available, and applicability varies dependent upon the type of project. Two possible options are
PIDs and TRZs.
4. Use of HTRZ Funds – Per 63N-3-607, HTRZ funds may be used to pay for a portion of the costs
associated with the following:
a. Income targeted housing costs
b. Structured parking within the HTRZ
c. Enhanced development costs
d. Horizontal construction costs
e. Vertical construction costs
f. Property acquisition costs
g. HTRZ Administration, including the State’s gap analysis
h. Public infrastructure
5. 2023 Legislative Update – During the 2023 Legislative Session, Senate Bill 84 was adopted which
amends the HTRZ Act as follows:
a. Amends provisions related to the objectives and required characteristics of an HTRZ
b. Restricts how much land a proponent county may own within a HTRZ
c. Requires a HTRZ proposal to include certain maps of the proposed area
d. Requires the Governor’s Office of Economic Opportunity (“GOEO”) to provide notice to
certain relevant entities after receiving a HTRZ proposal
e. Requires the State Tax Commission to provide feedback to a housing and transit
reinvestment zone regarding their ability to administer the tax implications of the proposal
f. Amends the membership of the HTRZ committee.
HTRZ Objectives.
1. State Objectives – As summarized by Zions Public Finance in a 2021 HTRZ White Paper, the Act
represents an “all-hands-on-deck” approach to helping mitigate the housing affordability crisis
along the Wasatch Front, and to better utilize transit infrastructure and investment. It intends to
encourage transit-oriented development (TOD) near UTA FrontRunner stations, and other transit
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stops, through tax increment financing and integral city and agency planning efforts. The Act
includes seven main objectives as follows:
a. Higher utilization of public transit
b. Increasing availability of housing, including affordable housing
c. Conservation of water resources through efficient land use
d. Improving air quality by reducing fuel consumption and motor vehicle trips
e. Encouraging transformative mixed-use development and investment in transportation and
public transit infrastructure in strategic areas
f. Strategic land use and municipal planning in major transit investment corridors
g. Increasing access to employment and educational opportunities
2. Alignment with City Objectives – While various city plans provide guidance regarding the State’s
overarching HTRZ objectives, encouraging transit-oriented and affordable housing development
in strategic areas of the city – especially as a means to conserve water, improve air quality, and
increase access to employment and education – are objectives that city plans and the RDA’s
Guiding Framework (see attached) generally support. Multiple guiding principles within the
citywide vision plan, Plan Salt Lake (2015), directly align with the objectives of HTRZ creation,
particularly the promotion of:
a. Growing responsibly while providing people with choices about where they live, how they
live, and how they get around.
b. Access to a wide variety of housing types for all income levels throughout the City,
providing the basic human need for safety and responding to changing demographics.
c. A transportation and mobility network that is safe, accessible, reliable, affordable, and
sustainable, providing real choices and connecting people with places.
d. Air that is healthy and clean.
e. Protecting the natural environment while providing access and opportunities to recreate
and enjoy nature.
f. A balanced economy that produces quality jobs and fosters an environment for commerce,
local business, and industry to thrive.
Current HTRZ Application: 900 South/200 West TRAX Stop
In November 2022, in an effort to provide an equitable opportunity for property owners who are considering
development to be included in the HTRZ, a survey was sent to commercial and multifamily residential
property owners within two potential HTRZ boundaries. The survey area included property owners within
a half mile radius of the 900 S/200W TRAX station and the 650 S Main TRAX station.
Due to the high concentration of recent construction and proposed development projects in the area, RDA
staff will move forward with an HTRZ proposal for the area surrounding the 900 South/200 West TRAX
station.
The area primarily covers the Salt Lake City’s Granary District, Central Ninth neighborhood, and a portion
of downtown. The area is comprised of a mix of land uses including office, commercial, single-family and
multi-family residential. While the area is experiencing growth, public support is needed to facilitate
sustainable affordable housing opportunities that are needed throughout the City and especially adjacent to
the Central Business District’s employment center. Much denser, transit-oriented development is also
needed to take full advantage of existing light rail that runs through the proposed HTRZ and the associated
public transit community benefits.
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The Granary District is
transitioning from primarily
industrial uses and warehouse
buildings to the City’s center of
creativity – with makerspaces for
artists and tradespeople, culinary
and recreational experiences, life
sciences, and local businesses of all
types and sizes. Due to the
industrial history of this area, the
neighborhood has developed
without the infrastructure
commonly found in the rest of the
city. Many streets do not have the
basic pedestrian enhancements such
as sidewalks, street trees, park
strips, curb and gutter. Public
infrastructure investment is greatly
needed to support this
neighborhood’s growth and the innovation happening within it. Transformative public projects that are
anticipated to be supported through the creation of this HTRZ include affordable housing, the Green Loop,
the Grand Boulevards, infrastructure improvements, and a public transit extension.
If not for funding provided by the proposed HTRZ, growth may happen sporadically, and not contain the
affordability, nor the density to support the revitalization of the area in alignment with city plans. It’s
anticipated that tax increment will be used for the following categories:
• Private Development Support (must incorporate public benefits)
• Public Project Support
• HTRZ Administration
RDA staff is finalizing an HTRZ application centered around the TRAX light rail station located at 900
South and 200 West to submit to GOEO for consideration.
City HTRZ Creation and Implementation Policy Considerations.
The selection and prioritization of future HTRZ project area locations are the next steps for moving forward
with any future HTRZ project area creation. City policy considerations, equitable opportunities, and the
data needed to submit a proposal are important factors in selecting where to create an HTRZ and what
parcels to include.
1. HTRZ Considerations – In addition to the Act’s alignment with citywide objectives and the
RDA’s Guiding Framework, the Board may also wish to consider the following when analyzing
potential areas of the city to establish an HTRZ:
a. How can HTRZ creation be done in the most equitable manner to benefit Salt Lake City
residents?
b. What area(s) of the city are in need of RDA investment to support housing, transit and
public infrastructure (transit-oriented development) in alignment with State, City and RDA
objectives?
c. What area(s) of the city encompass specific sites where public and/or private catalytic
development projects are being planned with quantifiable funding gaps?
d. What area(s) of the city could leverage existing growth and other funding sources to make
the greatest impact when reinvested into the neighborhood?
INCLUDED
PARCELS
HTRZ
BOUNDARY
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2. Potential HTRZ Locations. Given the legislation’s quota of eight (8) HTRZs adjacent to light rail
stations per county and one (1) HTRZ in an Opportunity Zone associated with light rail per city,
the RDA must contemplate which transit stops would make the most of the HTRZ tool if submitted
to the State. In addition to the 200 West and 900 South TRAX stop, potential HTRZ areas include
the following:
a. Intermodal Hub.
Salt Lake City’s
intermodal transit
hub, at approximately
600 West and 300
South, encompasses
the Station Center
development making
this a top priority
location for tax
increment
opportunities.
Located a block east
of the Rio Grande
Depot, this hub
includes multiple
public transportation
connections, including the FrontRunner, TRAX blue line, and the Greyhound bus. With these
lines all convening at this point, “first and last-mile” improvements are critical. As this area is
adjacent to a FrontRunner station, the potential project area is excluded from the State’s quota
of eight light rail HTRZs per County and; therefore, will not be submitted as the Agency’s first
HTRZ request to the State, but should be submitted in the near future as a means to support the
Agency’s Station Center planning efforts, the Downtown Plan’s Green Loop along 500 West,
and the potential light rail extension project. More generally, there is significant potential here
to facilitate improved east-west connectivity.
b. 200 West/1300 South (Ballpark) TRAX Stop.
Investment in the
Ballpark neighborhood
is one of the current
administration’s top
priorities. Tax increment
could be used in this
area to redevelop city-
owned parcels that
would produce revenue
to fund improvements
and maintenance for the
ballpark. Pedestrian-
safety enhancements
and general activation
are much needed as a
mechanism to combat
crime in the area.
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Quantifying the specific funding gap required by the State may be more straightforward in this
area than others.
The maximum tax increment collection for parcels included in HTRZs is 80%. If parcels are
included in both the State Street CRA and a potential Ballpark HTRZ, the maximum combined
collection will be 80% from each taxing entity. Overlapping tax increment project areas and
timeframes will not increase the maximum tax increment collection from taxing entities for the
parcels.
c. Sugar House S-Line.
There is potential for an
HTRZ along the S-Line in
Sugar House, particularly
centered around the
Fairmont and Sugarmont
stations. The establishment
of this project area could
support the extension of the
TRAX line to the east;
however, other potential
funding sources could also
be used to support this
extension. A possible option
is a Transit Reinvestment
Zone (TRZ). Additionally,
support has been requested
for the Thackeray – a multi-
family project planned at 2100 South and 900 East. Tax increment could be used to push
affordable housing requirements beyond the minimum.
Next Steps.
1. Submission of 900 South/200 West HTRZ Application – Section 63N-3-604 of the Act provides
requirements for the application submission to GOEO. These requirements include defining the
project boundary, identifying included parcels, establishing a base year and collection years,
explaining how the State Objectives will be met, the tax increment projections, and other several
other requested items. The HTRZ Committee uses the tax increment projection included in the
proposal to set the HTRZ cap.
RDA staff is finalizing an HTRZ application for development surrounding the 900 South/200 West
(Granary) TRAX Stop. Neighborhood impacting benefits above what the market would normally
create are the focus of the proposal submission.
2. HTRZ Tax Increment Reimbursement Policy – RDA staff is preparing a tax increment policy
specific to HTRZs for the Board’s consideration. The existing tax increment reimbursement policy
is subject to the requirements of the Utah Community Reinvestment Agency Act (17(c)), rather
than the Housing Transit Reinvestment Zone Act. The policy will outline threshold requirements
for participation in reimbursement agreements associated with HTRZ project areas.
3. HTRZ Implementation – If the HTRZ Committee approves the 200 West/900 South HTRZ
proposal, taxing entity participation as established by the HTRZ Committee will be formalized and
potential developer incentives will be considered.
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ATTACHMENTS:
A. Eligible HTRZ Locations Map
B. Transit Station Map
C. Guiding Framework
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ATTACHMENT A: ELIGIBLE HTRZ LOCATIONS MAP
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ATTACHMENT B: TRANSIT STATION MAP
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ATTACHMENT C: GUIDING FRAMEWORK
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