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Council Provided Information - 4/26/2024NWQ, LLC TAX INCREMENT REIMBURSEMENT Phases 2 & 3 RDA BOARD MEETING – MAY 14, 2024 MASTER PLAN, AUGUST 2016 •Establishes the vision and land use plan for future development, from which subsequent zoning amendments were based. ZONING & OVERLAY DISTRICTS, 2016 - 2018 •Establishes natural areas to protect sensitive lands and developable areas zoned as M1: Light Manufacturing. CRA ESTABLISHED, JANUARY 2018 •Enables the collection of tax increment to facilitate economic development and master plan implementation. •An interlocal agreement between Salt Lake City and the RDA establishes that the RDA collect 75% of tax increment for project area development activities over a 20-year term. The remaining 25% is retained by the City. DEVELOPMENT AGREEMENT, JANUARY 2018 •The RDA and City entered into a Master Reimbursement and Development Agreement with NWQ, LLC. •The Agreement establishes “reimbursement qualified expenses” that are eligible for a tax increment reimbursement. NWQ TI REIMBURSEMENT POLICY, AUGUST 2018 •Establishes the policies and procedures for evaluating and approving a Tax Increment Reimbursement Agreement. •Applications for a reimbursement of $1 million or more of tax increment shall be subject to a public benefits analysis completed by a third-party consultant. NWQ TI REIMBURSEMENT AGREEMENT, MAY 2020 •The RDA and NWQ, LLC entered into a tax increment reimbursement agreement for Phase I with a maximum reimbursement of $28 million. NWQ, LLC’s Phases 2 & 3 are adjacent to the already developed International Center, Phase 1, and within the area identified for development through the Northwest Quadrant Master Plan. APPLICANT: NWQ, LLC PROPERTY: 950.56 total acres Phase 2: 342.51 acres Phase 3: 608.05 acres RDA PARTICIPATION: 70% TERM: 20 Years or the sum of the remaining collection years of the Project Area, whichever is less MAXIMUM REIBURSEMENT: $49,562,855 ELIGIBLE EXPENSES: $288,283,201 •Systemwide Improvements: $48,173,936 Improvements that benefit the larger area within Phase 2 & 3 •Project-Specific Improvements: $240,109,264 NWQ, LLC’s improvements specific to Phase 2 & 3 of property development. Note: NWQ, LLC may only receive a reimbursement after the improvements are developed and the property generates sufficient tax increment. Note: Annual reimbursements subject to verification of the actual costs incurred by NWQ, LLC. NWQ, LLC’s Phases 2 & 3 will include light industrial warehousing that accommodate manufacturing, warehouse, and distribution tenants of varying size. Private investment for the planned system-wide improvements and the Phase I development includes over $1.8 billion million in capital expenditures. Approximately 14.7 million square feet of development will be generated to support over 7,300 jobs (PH 2: 2,842 & PH 3: 4,516 jobs). Source Moderate Scenario Value High Scenario Value Total City Tax Increment $81,506,526 $94,405,437 City Portion (25%)$20,376,632 $23,601,359 RDA Portion (75%)$61,129,894 $70,804,078 Note: Tax increment values are projections over the remaining 15 years of the Project Area term based on the Public Benefits Analysis completed by LRB Public Finance Advisors. Use %Moderate Scenario High Scenario Tax Increment Reimbursement 70%$42,790,926 $49,562,855 Affordable Housing 10%$6,112,989 $7,080,408 RDA Administration 10%$6,112,989 $7,080,408 Shared Costs 10%$6,112,989 $7,080,408 Total Uses of Tax Increment 100%$61,129,894 $70,804,078 Note: Tax increment uses are projections based on the Public Benefits Analysis completed by LRB Public Finance Advisors. •There are significant extraordinary infrastructure improvements in the NWQ area, including soil remediation, access to utilities and renewable energy investments. •Tax increment participation will assist with removing development impediments and the system-wide infrastructure investment will lead to substantial development within the remaining NWQ area. •The Development has the potential to create billions of new assessed value within an underutilized area that has generated very little tax revenue historically for the City. •The Development is projected to create over 7,300 new jobs. •“But for” the use of tax increment, this area will remain underutilized and vacant.