OGDEN — It’s been more than 20 years since the shovels began to turn on what was then a radical development idea in the northwest corner of Ogden.
And more than two decades after initial construction began on the Business Depot Ogden, city officials say the benefits of the zone are still pouring in — and will likely continue to do so well into the future.
When the old Defense Depot Ogden closed in 1997 after a Department of Defense Base Realignment and Closure round, the federal government deeded Ogden City all of the land and facilities associated with the old military installation for free. The city ultimately entered into a partnership with Salt Lake City-based real estate developer the Boyer Co., which included a $12 million bond (about $30 million in 2021 dollars) that funded initial infrastructure improvements and the creation of the DDO Redevelopment Area, which froze the facility’s tax valuation and put the revenue generated from property tax increases back into the development.
The subsidy tool, known as tax increment financing, is often used to give developers an incentive to build in areas that would likely see no expansion under normal free market conditions. The financing model is meant to push development projects along by paying for things like street and utility improvements, hazardous waste removal, property acquisition and the demolition of blighted buildings.
Since the initial deal was made, the bond has been paid off and the tax increment collection period expired in 2019.
On Tuesday, Ogden Director of Community and Economic Development Tom Christopulos briefed the City Council on where the development stands today. Christopulos said the total acreage developed since establishing the redevelopment district at the site is just over 359 acres. According to city council documents, the original goal for the end of 2019 was for 143 acres to be developed, which means the park is essentially 30 years ahead of schedule. The original master lease agreement stipulated 242.5 acres be developed by Dec. 31, 2034.
Christopulos said the occupancy rate for BDO buildings is above 98%. A trio of new buildings were constructed in 2020, as well as improvements to roads inside the facility. The BDO now has about 6,500 employees, Christopulos said, and more than 125 individual businesses.
“That was one of our major goals,” Christopulos said. “To create employment.”
And while the facility contributes significantly to Ogden’s economy in general, there is a more direct benefit seen by the city. Before Ogden took over the depot land, it was all tax-exempt. Now, with the expiration of the tax increment collection period, the city receives about $1.5 million per year from the site in the form of property tax revenue. And the city still collects lease revenue from tenants at the BDO. After expenses, Ogden and the Boyer group split BDO lease revenue 50-50. Ogden Chief Administrative Officer Mark Johnson said the city takes in about $8 million per year there, a figure that doesn’t include the tax revenue.
“It provides us a significant amount of new income revenue,” Christopulos said, “which has been really needed.”
The city uses BDO funds to help pay for a variety of projects and measures. Most recently, the City Council approved the use of BDO funds to help pay for a community arts plaza that will be built downtown.
Christopulos said the site is “nearly built out,” but at least one major development at the BDO is still on the horizon.
“I don’t know exactly when we’ll run out of space, but it’s not long,” he said “It’s foreseeable.”
Earlier this year, the council approved an agreement between the city, the Utah Transit Authority and Weber County that will fund the purchase of an approximately 5-acre piece of property on west 2nd Street, immediately east of the Union Pacific rail tracks. The property will eventually be used for a new FrontRunner commuter rail station.
UTA currently owns exclusive track for FrontRunner up to only about 12th Street, but the agency wants to expand FrontRunner service north into Brigham City. UTA is currently looking to acquire other properties that would be needed for the extension, but there aren’t any hard dates for when the expansion could begin.