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HomeMy WebLinkAboutCouncil Provided Information - 4/14/2026Redevelopment Agency of Salt Lake City RESOLUTION NO. _16_ Housing and Transit Reinvestment Zone Tax Increment Reimbursement Program Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY ADOPTING THE RDA HOUSING AND TRANSIT REINVESTMENT ZONE TAX INCREMENT REIMBURSEMENT PROGRAM POLICY WHEREAS, the Utah Housing and Transit Reinvestment Zone Act (HTRZ Act) was enacted to further a number of objectives including promoting a higher utilization of public transit and increasing the availability of housing including affordable housing. WHEREAS, pursuant to the Act, the Redevelopment Agency of Salt Lake City (RDA) administers the tax increment, including entering into reimbursement agreements (also known as tax increment reimbursement agreements) with project developers or property owners associated with an HTRZ Committee approved Housing and Transit Reinvestment Zone (HTRZ) for the purpose of utilizing the funds as allowed by the HTRZ Act. WHEREAS, the Board of Directors of the Redevelopment Agency of Salt Lake City Board) supports the distribution of tax increment associated with an HTRZ pursuant to the process outlined below. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, that we do hereby establish policy guidelines for the RDA HTRZ Tax Increment Reimbursement Program to include the following: 1. GENERAL a. Purpose The RDA HTRZ Tax Increment Reimbursement Program (Program) may provide project developers or property owners a tax increment reimbursement Reimbursement) for the development of improvements in or associated with an HTRZ that meet the goals and objectives of the HTRZ Act, the executed interlocal agreement between the RDA and Salt Lake City, and the RDA’s Mission and Values, and provides significant public benefit. The Program is designed to provide reimbursements that are calculated using Salt Lake County’s assessed property value. The developer or property owner will receive a percentage of the tax increment generated from its project for a specified timeframe, and the RDA will receive the residual tax increment generated by the project. b. Authorization The RDA shall determine whether a project meets the goals and objectives of the HTRZ Act, the executed interlocal agreement between the RDA and Salt Lake City, the approved HTRZ, and the RDA’s Mission and Values. As provided in the HTRZ Act, a Reimbursement can only be authorized pursuant to a Reimbursement Agreement (Agreement), the terms of which are approved by the Board. The Board reserves the right to modify or deny a tax increment reimbursement application at any time for any reason. The Board’s approval of an Agreement shall be made by resolution and include a description of the development the applicant will undertake, the amount of funds the applicant may receive, and the terms and conditions under which the applicant may receive the funds. c. Tax Increment Calculation The formula to calculate the Reimbursement generated from the proposed improvements shall be as follows: i. Step 1: Estimate the Total Annual Tax Increment. o Determine the property's taxable value as shown upon the assessment roll last equalized prior to the construction of improvements on the property. This value is referred to as the property’s Base Taxable Value. o Calculate the difference between the Base Taxable Value of the property prior to improvements and the property’s estimated taxable value after the improvements have been made. This difference is referred to as New Growth. o Multiply New Growth by the current effective tax rate. New Growth) x (Effective Tax Rate) = Total Annual Tax Increment TI) ii. Step 2: Estimate the Annual TI Received by the RDA. o Total Annual TI multiplied by the percentage of TI received by the RDA. (Total Annual TI) x (% of TI received by the RDA) = Total Annual TI Received by the RDA. iii. Step 3: Estimate the Annual Reimbursement Payment. o Using the developer/property owner reimbursement rate Reimbursement Rate) established in the Agreement, calculate the estimated annual reimbursement payment. o (Total Annual TI Received by the RDA) x (Reimbursement Rate) = Estimated Annual TI Reimbursement Payment. Refer to Section 2 for more information on calculating the participation rate between the RDA and the developer. iv. Step 4: Calculate the Maximum Amount of Tax Increment Available to the Developer or Property Owner Over the Term of the Agreement. o (Estimated Annual TI Reimbursement Payment) x (the Term of the Reimbursement Agreement) = Total TI Available to Developer or Property Owner Over the Term. An annual growth multiplier based on current economic conditions may be applied to this calculation, at the RDA’s sole discretion. Actual Reimbursement is dependent on the increment being generated by the project. d. Eligible Costs The tax increment reimbursement will be limited by state law as indicated by Section 63N-3-607(4) of the HTRZ Act and Section 11-41-103 of the Prohibition on Retail Facility Incentive Payments Act. The RDA may determine, in its sole discretion, if the entire project or only specific project elements are eligible. e. Design Review Projects approved for Reimbursement must follow the RDA’s administrative design review process. Projects will be required to be in conformance with all Salt Lake City policies, ordinances, and codes. 2. REQUIREMENTS AND STRUCTURE a. Threshold Requirements of Projects that Incorporate Housing i. Projects must meet all applicable standards and objectives of the HTRZ Act and the approved HTRZ; and, ii. At least 10% of housing units within a project must be affordable to those earning 60% the Area Median Income (AMI) and below, or, 20% of units must be affordable to those earning 80% AMI and below. Income averaging of units within a single project may be utilized to achieve AMI thresholds; and, iii. Projects must include activated, ground floor space if not a private residence. Activated, ground floor space means a minimum of 50% of all ground floor, street-facing building facades must contain an active (commercial, retail, or office) use that is not exclusive to the tenants of the building; and, iv. Projects must comply with the RDA’s Sustainable Development Policy; and, v. The applicant must provide sufficient evidence (including, but not limited to the project pro forma, senior lender agreement(s), equity investor agreements, etc.) that tax increment funding is necessary for the project to succeed and to verify that the request is reasonable. b. Threshold Requirements of Projects that Do Not Incorporate Housing i. Projects must meet all applicable standards and objectives of the HTRZ Act and the approved HTRZ; and, ii. Projects must meet at least two (2) of the RDA’s qualifying livability benchmarks: permanent job creation; affordable commercial spaces; ownership; transportation opportunities; neighborhood safety; community engagement and support; public art; public space; walkability; and building preservation, rehabilitation, or adaptive reuse (collectively, Qualifying Livability Benchmarks). iii. Projects must include activated, ground floor space; and, iv. Projects must comply with the RDA’s Sustainable Development Policy; and, v. The applicant must provide sufficient evidence (including, but not limited to the project pro forma, senior lender agreements, equity investor agreements, etc.) that the Reimbursement is necessary for the project to succeed and to verify that the request is reasonable. c. Affordable Housing Requirements. i. Deed Restriction – If the project qualifies for a Reimbursement based on the incorporation of housing, prior to executing an Agreement, a restriction shall be recorded against the property that requires continued use of the specified units as affordable housing for at least 30 years. Both rent and income restrictions shall be included to limit the maximum rent that can be charged for a unit and to require that the unit be made available only to households with qualifying incomes. ii. Bedroom Count Mix – The affordable units shall be located on different floors of the building and spread among bedroom counts (1-bedroom, 2- bedroom, 3-bedroom, etc.) in the same proportion as the units available within the rest of the project. d. Eligible Project Locations Eligible projects shall be located in or associated with an active HTRZ that allows tax increment reimbursements pursuant to the HTRZ Act. e. Maximum Reimbursement Term The Reimbursement term will be negotiated based upon a project’s level of public benefits and demonstrated financial need and shall be consistent with the HTRZ Act. f. Maximum Reimbursement Rate i. Base Level Reimbursement – The maximum reimbursement rate for Projects that only meet the Threshold Requirements is 60%. ii. Increased Reimbursement Incentives – Projects may be eligible to receive an additional 10% increase in the reimbursement rate for meeting elements listed below, with each element being worth an additional 10%. The possible total maximum reimbursement rate is 90%. The elements are: 1. Incorporating Qualifying Livability Benchmarks in the project beyond the Threshold Requirements. 2. Providing an additional 10% of total affordable units at 60% AMI and below beyond the Threshold Requirements. 3. The inclusion of 3- and 4-bedroom units in projects that incorporate housing. 4. Meeting a priority identified in the RDA’s Annual Housing Funding Strategy established pursuant to the Housing Allocation Funds Policy. g. Maximum Reimbursement Amount The maximum Reimbursement amount will be negotiated based upon a project’s eligible costs, level of public benefits, and demonstrated financial need, and shall be consistent with the HTRZ and HTRZ Act. 3. EVALUATION AND APPROVAL PROCESS a. Applications that meet the requirements detailed in Section 2 will be evaluated and processed as detailed below. i. Step 1: Application Processing and RDA Staff Review. All applications shall be made to RDA staff, on standard RDA forms. All applications must be complete to be evaluated, and if either the applicant or proposed project fails to demonstrate the ability to meet application requirements, RDA staff may deny the application. ii. Step 2: RDA Finance Committee Review. RDA staff shall forward complete applications that meet the threshold requirements to the RDA Finance Committee. The RDA Finance Committee shall evaluate applications, supplemental materials, and other documentation necessary to thoroughly review the application and formulate a recommendation to the Board. iii. Step 3: Board Consideration of the Tax Increment Reimbursement Agreement Terms. Upon review of the application and supporting material, the Board may consider for approval a resolution detailing the Agreement terms. iv. Step 4: Agreement Finalization. Once the terms of an agreement have been authorized by the Board through an approved resolution, the RDA and developer will execute an Agreement consistent with the terms approved by the Board, and any other legal agreements (including an affordable housing restriction) deemed necessary by the City Attorney’s Office. 4. AGREEMENT TERMS a. Participation and Reimbursement Agreement Terms In addition to any other terms as recommended by legal counsel, the following terms shall be included in the Agreement: i. Reimbursement to Benefit Owner: RDA Discretion The RDA intends that the beneficiary of the Reimbursement will be the owner of the project for the life of the Agreement. In the event of a transfer or sale of the project or property, the Agreement and all benefits conferred under the Agreement shall benefit the project and be recorded against the property to run with the land, with the intent that all Reimbursements will remain with the owner of the real property and project. In the event that the ownership of the real property and improvements are severed, the RDA will have sole discretion to determine the beneficiary of the tax increment. If the Agreement is executed and the real property and project are conveyed to a third party while the improvements are still being constructed, the RDA will retain the right to consent to the transfer the Agreement to the new owner, in order to ensure that the benefits the RDA anticipated receiving under the original Agreement with the original developer are consistent with the new developer. If RDA does not consent to the transfer of the Agreement, the Reimbursement will cease and the Agreement will terminate. ii. Tax Appeals All reimbursement recipients shall be required to notify the RDA if they have applied for a property tax appeal with Salt Lake County. In the event that any such appeal results in a reduction in property taxes, the percentage share of the Reimbursement payable by the RDA to the recipient will decrease, and the percentage share of the tax increment received by RDA shall be increased, so that the dollar amount received by the RDA is the same as if no appeal of the assessed value had been made. iii. Recapture Provisions in the Event of Default Agreements shall require the recapture of Reimbursement funds allocated to a project that fails to meet the requirements as provided in the Agreement. iv. Participant Reporting Requirements Agreements shall require the following reporting from Reimbursement recipients as per the following: 1. Project Completion: Upon project completion, Reimbursement recipients shall provide a report that includes, but is not limited to, the total cost of improvements, a summary of completed improvements, and outcome metrics relating to project-specific requirements. 2. Annual Pre-Reimbursement: Contingent upon receiving an annual Reimbursement, Reimbursement recipients shall provide a report that includes a notification of any tax appeals and outcome metrics relating to project-specific requirements. As applicable, the report shall include relevant data that is certified by a financial officer or public accountant. b. Interest Interest will not accrue against the RDA on the anticipated or projected tax increment to be reimbursed to the developer. 5. REPORTING REQUIREMENTS a. Reporting The RDA shall provide a written briefing to the Board once per fiscal year, which contains an update on the RDA’s Reimbursement portfolio. Such briefing shall include a summary of new Agreements, anticipated budget impacts, and project metrics. 6. EXCEPTIONS The Board, by a majority vote of those present, may waive requirements or make exceptions to the foregoing criteria and procedures with a finding that the RDA’s mission and values will be furthered by such waiver or exception. RDA staff will prepare a written recommendation and statement regarding the waiver or exception. The statement will be placed in the project file. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this day of December 12th, 2023. Chair Approved as to form: __________________________________ Salt Lake City Attorney’s Office Allison Parks Date:____________________________ The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Attest: City Recorder Allison Parks (Dec 15, 2023 10: 51 MST) Dec 15, 2023 Daniel Dugan (Dec 20, 2023 13:09 MST) Erin Mendenhall (Dec 20, 2023 14:01 MST) 4 Granary District Alliance (GDA) Granary District, Salt Lake City Granarydistrictslc@gmail.com March 31, 2026 To: Salt Lake City Council and Mayor’s Office and CRA Director Danny Walz Re: Pickle Building Demolition and Revised Development Plans Dear Mayor Mendenhall, City Council Members and Mr. Walz, We at the Granary District Alliance (GDA) as well as many community members, are deeply saddened by the loss of the historic Pickle Co Building which has been an iconic and important historic structure in our community. As mentioned in our previous letter, The GDA endorsed the original plan in 2023 as it was an adaptive reuse for the building, preserving a portion of the front facade and retrofitting the rest of the building preserving its original character. We understand that Blaser Ventures was within their rights to demolish the building as a revised demolition permit was issued by Salt Lake City building services. The developer has expressed regret and apologized for the lack of transparency with the GDA board with the change in plans and the demolition carried out last week. After discussions with the Blaser team and witnessing their development of the site, we applaud the new building that is currently being built with similar architectural elements (namely the arched windows and parapet), constructed reusing the bricks from the original Pickle building, and believe it is the best path forward for the site. This revised development also includes publicly accessible open space in the form of a pocket square behind the rebuilt building.This revised plan dovetails with the developer’s plans for the Kilby development parcels east of the site. This will create a walkable, connected space with existing buildings that maintain the original character of the Granary district, something the GDA highly values. www.thegranarydistrict.com @thegranarydistrict Our formal recommendation, as voted on and approved unanimously by our board on May 28th, 2025, and again on March 23, 2026 is to support the new concept of the Blaser Pickle Building rebuild including the proposed open space. We encourage the City Council and CRA to follow through with their agreement with the developer to issue the $6M in tax increment reimbursement funding previously allocated to the project. We also support including a stipulation in this agreement to ensure that the public open space or pocket square in the current plan gets constructed as a condition of the agreement for public benefit. We understand that these funds are required for the project's financing and future feasibility. As a board, we would like to see the site thrive. We believe it is the best solution moving forward to avoid blight to the neighborhood that such a stalled or abandoned project would cause. We encourage the CRA and City Council to support this new vision of the Pickle Co building and issue the CRA funding agreement. This funding will facilitate the reconstruction of the building and the proposed public space as the best case scenario for this site. Please reach out if you have any questions or would like to engage in additional discussions on this matter. Thank you for your time and consideration. Sincerely, The Granary District Alliance Board Annastasia Kaessner, Granary District Alliance, Chair 2026 www.thegranarydistrict.com @thegranarydistrict Pickle & hide Tax increment reimbursement APRIL 2026 Original project scope Phase I Renovation of “Hide” building •5,500 sf commercial •141 units of residential (38% at 60-80% AMI) Phase II Renovation of “Pickle” building •14,500 sf of commercial Renovation of “Ed’s Restaurant” •2,500 sf of commercial Activated ground floor use: 50% of the ground floor, street- facing building facades contain an active use not exclusive to building tenants. Salt Lake City Community Reinvestment Agency Policy WAIVERs & Conditions HTRZ Tax Increment Policy 1.Affordability minimum term reduced from 30 years to 15 years 2. Emission Free Building •Waived for designated restaurant spaces 3. “On site net zero” a.RMP Blue Sky Participation at $350/mo for Phase I energy needs b.SEDI for Pickle and Ed’s Restaurant c.Water-wise landscaping, smart irrigation, zero emissions landscaping equipment d.Easement for midblock walkway Salt Lake City Community Reinvestment Agency Approved reimbursement terms Reimbursement Rate: 90% Base Rate (60%) + Public Benefits (10% each) 1.Building Preservation, Rehabilitation, and Adaptive Reuse 2.Walkability 3.Neighborhood and Commercial Services (FY25 Housing Funding Priority) 15 years $6,909,585 $6,094,254 Salt Lake City Community Reinvestment Agency Modified project scope •Risk and uncertainty •$1 million in project costs •Shotcrete and steel stabilization Building demolished on May 21, 2025 Salt Lake City Community Reinvestment Agency Modified project scope 40% of materials salvaged for reuse •50,000 bricks + 70,000 bricks from Granary District •Star anchors •Sandstone for fireplace •Timber for site furnishings •Roof trusses +28 parking spaces for 192 total parking stalls Salt Lake City Community Reinvestment Agency Policy WAIVERs & Conditions HTRZ Tax Increment Policy 1.Affordability minimum term reduced from 30 years to 15 years 2. Emission Free Building •Waived for designated restaurant spaces •Requested waiver for common area amenities (3 community fireplaces and 2 grills) 3. “On site net zero” a.RMP Blue Sky Participation at $350/mo for Phase I energy needs b.SEDI for Pickle and Ed’s Restaurant c.Water-wise landscaping, smart irrigation, zero emissions landscaping equipment d.Easement for midblock walkway Salt Lake City Community Reinvestment Agency Approved reimbursement terms Reimbursement Rate: 90% Base Rate (60%) + Public Benefits (10% each) 1. 2.Walkability 3.Neighborhood and Commercial Services (FY25 Housing Funding Priority) Term: 15 years $6,909,585 $6,094,254 Salt Lake City Community Reinvestment Agency Building preservation, rehabilitation, adaptive reuse “To acknowledge a neighborhood’s history and maintain its unique character through preservation, rehabilitation, or repurposing of historic or underutilized structures. The project will preserve, rehabilitate, or repurpose an existing structure for a land use that contributes positively to the surrounding neighborhood.” Pickle Building was one of three buildings considered in this public benefit, along with the preservation of the Hide Building’s facades and the full adaptive reuse of Ed’s Restaurant. Salt Lake City Community Reinvestment Agency Modified Scope & Term revisions Salt Lake City Community Reinvestment Agency •Requested policy waiver for Sustainable Development Policy •Possible reduction of Tax Increment Reimbursement Rate o Pro rata share of Pickle building (3.3% = $223,456) o Full reduction of Public Benefit (10% = $677,139) o No reduction Next steps Salt Lake City Community Reinvestment Agency Amended Term Sheet and Resolution Tax Increment Reimbursement Agreement CITY COUNCIL OF SALT LAKE CITY 451 SOUTH STATE STREET, ROOM 304 P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476 SLC.GOV/COUNCIL TEL 801-535-7600 FAX 801-535-7651 BOARD STAFF REPORT COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:CRA Board Members FROM:Kate Werrett Budget and Policy Analyst DATE:April 14, 2026 RE:PICKLE AND HIDE MIXED-USE DEVELOPMENT TAX INCREMENT REIMBURSEMENT REQUEST TERM REVIEW ________________________________________________________________________________ ISSUE AT-A-GLANCE The Board will receive a briefing and consider adopting a resolution that would approve modifications to the terms of a Tax Increment Reimbursement Agreement with Mountain West Development, LLC (Developer), also known as Blaser Ventures, for the Pickle & Hide development in the 900 South Housing and Transit Reinvestment Zone (HTRZ) located at approximately 739 South 400 West (see background section for information on the HTRZ, which was the first approved in SLC). On March 18, 2025, the Board adopted Resolution No. 5 of 2025 approving the original tax increment reimbursement agreement term sheet. After obtaining the necessary permits, the developer demolished the Utah Pickle Co. building which the application and term sheet identified for adaptive reuse. This prompted reconsideration of the previously approved tax increment reimbursement term sheet. This staff report includes a request from the Community Reinvestment Agency (CRA) staff for guidance regarding potential modifications to Resolution No. 5 of 2025. Under this resolution, the CRA agreed to support the developer via a tax increment reimbursement agreement by contributing up to 90% of the tax increment collected from the development within the HTRZ. Due to the demolition, CRA staff is seeking guidance from the CRA Board on how to proceed with the tax increment reimbursement agreement (Agreement). Goal of the briefing: Receive details regarding changes to the existing resolution, discuss the proposed modifications, and provide direction to CRA staff. The CRA Board may take action at its discretion. POLICY QUESTIONS 1. Should the CRA Board require modifications to the waivers previously granted under the Sustainable Development Policy, given the original basis was granted due to the preservation and adaptive reuse of the demolished Pickle Building? Waivers include: o Sustainable Development Policy Section 3.a.b: The emission-free building operation requirement was waived to accommodate restaurant gas stovetops. As proposed and originally approved, the rest of the project must comply with this requirement and have no on-site fossil fuel combustion. Schedule: Page | 2 o Sustainable Development Policy Section 4.a.ii: The on-site net zero building requirement was waived and adjusted to require “off-site next zero” standards as part of the original approval. 2. Should the CRA Board allow partial reimbursement, considering some construction materials were incorporated into the project? 3. How should the city balance partial compliance (e.g., material reuse, other redevelopment benefits) against the loss of the community valued building? 4. What safeguards can the CRA impose to guarantee that future term sheets for HTRZ tax increment reimbursements won't also change after board approval? 5. Should the CRA establish financial or legal consequences for developers who fail to meet project commitments or for changing project plans when applying for incentives after board approval? 6. Should there be a formal mechanism to prevent similarfailures in future tax increment reimbursement projects? 7. Should the CRA require CRA Board approval for any significant demolition in future projects receiving tax incentives or establish a requirement for formal board discussion/straw poll as was the case in the USA Climbing development? ADDITIONAL & BACKGROUND INFORMATION Housing and Transit Reinvestment Zone Tax Increment Reimbursement Program In December 2023, the CRA Board adopted Resolution 16 of 2023 - Housing and Transit Reinvestment Zone Tax Increment Reimbursement Policy (HTRZ Policy). The HTRZ policy outlines the purpose of the program, threshold requirements, general terms for base level reimbursement, and options to receive increased reimbursement incentives. The purpose of the program is to provide developers tax increment for the development of qualifying improvements. The base level program participation provides a 60% property tax reimbursement from the application parcels. The program allows for an increased reimbursement rate by incorporating the following: - Additional Qualifying Livability Benchmarks - Increased affordable housing percentage - Inclusion of family-sized units - Incorporating CRA Annual Housing Funding Strategy priorities By incorporation of the above items, applicants may be eligible to receive up to a 90% property tax reimbursement, the program’s maximum participation rate. Mountain West Development, LLC Program Participation In January 2025, the developer, Mountain West Development, LLC, submitted a tax increment reimbursement application for its Pickle & Hide development. In the original application, the Developer requested and was granted by the CRA Board three program and policy waivers: 1. HTRZ Policy Section 2.c.i: A reduction in the affordable housing deed restriction from 30 years to 15 years. 2.Sustainable Development Policy Section 3.a.b: The emission-free building operation requirement was waived to accommodate restaurant gas stovetops. As proposed and originally approved, the rest of the project must comply with this requirement and have no on-site fossil fuel combustion. 3.Sustainable Development Policy Section 4.a.ii: The on-site net zero building requirement was waived and adjusted to require “off-site next zero” standards as part of the original approval. Page | 3 The Developer requested the maximum property tax reimbursement and was approved to receive a 90% reimbursement by the CRA Board due to the inclusion of Increased Reimbursement Incentive elements in the application. The application materials included the following Increased Reimbursement Incentive elements: Revised Application/Reconsideration of Program Participation ATTACHMENTS