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Farmington pushing to build arena in Station Park, attract Utah Jazz G League team

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Farmington City has a new high school, miles of hiking and biking trails, a booming population and a popular shopping mall — and it might not be done yet.

The city is employing a full-court press in hopes of convincing the Utah Jazz professional basketball franchise to relocate its NBA G League team, the Salt Lake City Stars, to Station Park once the Stars’ lease with Salt Lake Community College expires in the near future.

Presentations made by city officials at recent Davis School District board meetings detail the city’s efforts to present the franchise with “the very best package,” which is centered around the construction of an approximately $40 million, 5,000-seat, multi-use arena located in a vacant lot near the Utah Transit Authority bus and FrontRunner station in Farmington.

That package, city officials said at board meetings, would make Station Park the ideal experience for concerts, basketball games and other events due to the arena’s proximity to restaurants and retail stores.

“There’s still a lot of hurdles that everybody needs to get over, whether it’s contract negotiations, leasing arrangements, utilities, all these things. That’s the big thing. This is super, super preliminary,” said Brigham Mellor, Farmington City’s economic development director.

In other words, the arena is still a big ‘if.’

The city’s pitch is contingent on the approval of an extension to an existing Redevelopment Area (RDA) at Station Park, which would pave the way for an arena to be built.

The RDA extension will be discussed and potentially approved, or not approved, at 9 a.m. Monday, June 10, at a Taxing Entity Committee (TEC) meeting at Farmington City Hall, according to a meeting agenda posted on the city’s website.

RDAs work by freezing the tax valuation for all taxable properties inside an area of land that’s been targeted for reinvestment. Farmington Station’s RDA was created in 2005.

For a specified time period or up to a certain dollar amount, future increases in property tax revenue are used in the development or redevelopment effort, a mechanism called Tax Increment Financing.

The TIF money is offered to developers as an incentive to build and it can be used for things like street and utility improvements, hazardous waste removal, property acquisition and the demolition of blighted buildings.

Ideally, when the duration or dollar thresholds are met, new development in an RDA has increased tax valuations in the area and government agencies see a new stream of cash that may not have otherwise been there.

In this situation, property tax money that would be going from Station Park to the taxing entities in Davis County would instead be used as a potential cost incentive to build an arena.

Mellor said that, at the absolute most, the public financial contribution to arena construction would be 20 percent of the cost, but he guessed it would be closer to 10 percent.

So far, the potential Farmington RDA extension has been mostly well-received. Most school board members have indicated support for it at board meetings.

The process has been criticized by some for depleting money that could be used for more immediate needs, particularly in the school districts.

Speaking to the school board at its June 4 meeting, Ronald Mortensen of Citizens for Tax Fairness asked, “...why taxpaying entities are so willing to provide taxpayer funds for certain privileged businesses?”

“I’d argue that that’s not the taxpayers responsibility, nor the schoolchildren’s’ responsibility, to take that money and subsidize a risky project,” he said.

DSD board member Cheryl Phipps pointed out during the board’s June 4 meeting that today, Station Park is not blighted nor is it in danger of not being developed without the help of tax dollars.

Station Park’s vacancy rate is at 1 percent, according to Mellor, who said it has outperformed any reasonable financial expectations.

Station Park’s RDA was created with a tax increment cap of $18.5 million, which was set with the promise that Station Park would generate $80 million in tax revenue over the 20-year lifespan of the original RDA.

It has instead generated a whopping $350 million in tax revenue, according to Mellor.

The city doesn’t need the arena and Mellor said so in a phone interview Wednesday with the Standard-Examiner, but the city sees a lot of potential with an arena.

“I think it fits with our identity to be the place you go when you want to do something fun and unique,” he said, calling Farmington a “gathering spot” since it is already the home of the Lagoon Amusement Park and Station Park.

The $18.5 million cap is set to be reached soon, meaning the taxing entities in Davis County will see a wave of cash come in to their coffers once either the cap is met or the RDA expires.

It also means the city and Station Park wouldn’t have additional incentives that it would like to put on the table for an arena.

The city wants to extend the RDA by one year and by an additional $4.06 million from the taxing entities so that it can extend the cap to $22.56 million.

A lion’s share of the additional money (approximately $2.5-2.7 million) would come from the school district, which is already set to raise property taxes later this year in order to fund raises for teachers.

The rest of the new money would come from the remaining taxing entities in Davis County such as the county, the mosquito abatement district, etc.

Station Park, operated by CenterCal Properties, LLC, would foot most of the bill for the arena construction and bring in a third party to run arena operations, Mellor said.

The Davis County Commission unanimously approved moving $1 million from its tourism fund and designating it as a potential contribution to the arena project, should it get built, at its Tuesday meeting.

School board members have expressed concern with the speed at which this issue has been presented.

The reason, according to the city, is so the RDA extension can get approved at the TEC meeting on June 10 before the county sets its official tax rates later that day.

If it’s not approved that day, there’s a feeling the arena opportunity goes down the drain.

“If the RDA isn’t extended, that opportunity to participate in the arena in Station Park is lost,” said Craig Carter, Davis School District’s business administrator, at the June 4 board meeting. “That doesn’t mean there aren’t other opportunities ... but that probably wouldn’t trigger the money that they need in the time that they feel they need.”

One provision of the proposal to extend the RDA is if the arena isn’t under construction by May 31, 2022, the taxing entities get their money back, Mellor said. If the RDA extension does go through and the arena is built, the DSD is set to net $300,000 over the lifespan of the RDA, Mellor said.

The arena may also be built whether or not the Utah Jazz move the Stars to Farmington, Carter indicated at the June 4 board meeting.

“All we’re doing right now is just setting up the possibility (for an arena) and I would say there’s a very good possibility that nothing happens,” Mellor said. “That’s kind of the way development works, it could be just another ice cream shop next year.”

When professional sports teams look for new arenas for either themselves or a minor league franchise they own, they often solicit pitches from multiple locations to see which one can offer the most financially friendly package. Many have questioned why wealthy pro sports teams solicit public money for new arena construction. The Utah Jazz organization is valued at $1.4 billion, according to Forbes.

Presentations to the board and comments made by city officials in the three recent school board meetings indicate the Utah Jazz are considering several locations for the Stars, including an additional, unnamed city in Davis County and an unnamed location in Salt Lake County.

Despite Farmington having an attractive option for the Utah Jazz to consider, the franchise may yet go elsewhere. However, the interest is mutual enough to the point where Mellor told the school board at its May 21 meeting that Jazz officials have made site visits and there’s a developer interested.

Derek Garduño, VP of communications for the Jazz, forwarded a request for comment Wednesday to Stars spokesman Matt de Nesnara. In an email, de Nesnara said the Stars would decline comment.

Farmington hopes the arena would host G League games as well as concerts and other events, potentially including high school graduations. Station Park already hosts a free summer concert series that attracts thousands of people each concert.

G League teams typically play 24 home games. The NBA G League is a professional, developmental basketball league operated by the NBA and founded in 2001. It now has 27 teams, many of which are directly owned by NBA franchises.

The Jazz purchased a G League team, the Idaho Stampede, in 2015 and moved it to Salt Lake City in 2016, renaming it the Stars. The Stars have played in Bruin Arena at Salt Lake Community College since the move.

In the 2018-19 season, the Stars averaged 1,342 fans in 20 reported games at SLCC — with a season-high of 2,391 — and 6,667 fans over three games played at Vivint Smart Home Arena.

Standard-Examiner reporter Mitch Shaw and sports editor Brett Hein contributed to this story.

Reach sports reporter Patrick Carr at pcarr@standard.net and follow him on Twitter @patrickcarr_.

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