Standard-Examiner

BDO expires next year; school district, county, city to get tax dollar influx

Sunday , February 11, 2018 - 5:00 AM

This photograph, taken Sept. 11, 2012, shows construction at Business Depot Ogden.

Business Depot Ogden

This photograph, taken Sept. 11, 2012, shows construction at Business Depot Ogden.

OGDEN — In 2019, after more than 20 years, the Business Depot Ogden redevelopment area will expire, sending a torrent of new tax dollars to the Ogden School District, Ogden City and Weber County.

Redevelopment areas, or RDAs, freeze the valuation for all taxable properties inside a geographical area that has been identified by the city for reinvestment. For a specified time period, or up to a certain dollar amount, revenue generated from property tax increases is put back into the RDA.  

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The subsidy tool is called “Tax Increment Financing.” The money collected through TIF is often offered to developers as an incentive to build. It  can also be used for things like street and utility improvements, hazardous waste removal, property acquisition and the demolition of blighted buildings.

Ogden City has multiple active RDAs, which typically collect the aforementioned tax increases from the city, the county and the school district.

The BDO RDA was established in 1998, a year after the federal government gave the land and buildings associated with Defense Depot Ogden to Ogden City.

The former military installation closed in 1997 during the Department of Defense’s Base Realignment and Closure process. The land was deeded (free of charge) to Ogden City, who entered into a public-private partnership with Salt Lake City-based real estate developer the Boyer Company.

The RDA and the city partnership with Boyer resulted in the 1,118 acre business park seen at the site today.

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According to Ogden City Redevelopment Agency documents, the taxable value of the BDO in 1998 was $22,686. If that number seems low, it’s because most of the land and buildings were owned by the military — making the properties exempt from taxes.

In 2016, the taxable value of the BDO stood at $437.6 million. When the RDA expires and all property taxes at the BDO start going back onto tax rolls, the OSD will begin seeing about $3 million per year from the development. The city and the county will get somewhere near $1 million annually. Those numbers will go up if property values in the BDO continue to increase.

“The BDO has been the poster child, in terms of what you want to see happen (in an RDA),” said Ogden City Chief Administrative Officer Mark Johnson. “There was this mostly vacant, not taxable piece of property that has since become a thriving business park that generates millions of dollars.”

OSD Business Administrator Zane Woolstenhulme told the Standard-Examiner the district participates in Ogden RDAs because they often offer a “deferred benefit.” In most cases, Woolstenhulme said, the district’s participation nets them more tax revenue then they otherwise would have received.

He pointed to the BDO as an example. 

“We’re chomping at the bit, waiting for the BDO thing to come off,” he said. 

RELATED: Ogden will extend tax break period for West Ogden development

For a variety of reasons, the city sometimes extends RDA timelines, further deferring tax money. Most recently, in the summer of 2017, the city extended the West Ogden Trackline RDA by 12 years. City officials said the extension of the 122 acre RDA was needed  to cover costs associated with unforeseen conditions at the site, related to power and utility construction and environmental remediation work.

Johnson said unequivocally, the BDO RDA would not be extended.

“This one will not be extended,” he said. “It’s going to expire next year and it’s going to be a nice payday for the district, the city and the county.”

Blake Wahlen, BDO General Manager, said Boyer wouldn’t be impacted too much when the BDO RDA comes off the table. He said development plans at the park have been made with the 2019 expiration date in mind. 

“We’ve kind of mapped out how the remaining funds will be spent,” Wahlen said.

There are about 6,200 employees working out of the BDO, scattered among 11.2 million square feet of building space. Wahlen said there are about 200 to 250 acres of land open for additional development and build-out should occur in another 10 to 15 years. When it does, the BDO will house more than 10,000 employees.

You can reach reporter Mitch Shaw at mishaw@standard.net. Follow him on Twitter at @mitchshaw23 or like him on Facebook at Facebook.com/MitchShaw.StandardExaminer.