OGDEN — The pieces are quickly falling into place for a new city redevelopment district that could result in more than $200 million worth of new construction in a six-block section of Ogden’s downtown.
Weber County and the Ogden City School District recently approved interlocal agreements with Ogden on the city’s proposed Continental Community Reinvestment Area.
The CRA, which is located in the approximate six-block area bounded by Wall Avenue and Washington Boulevard between 25th and 27th streets, aims to use certain tax incentives to help fund a bevy of redevelopment items: vacant building removal, the development of new housing units, public infrastructure improvements and the renovation of existing buildings.
Brandon Cooper, Ogden’s deputy director of Community and Economic Development, said the centerpiece of the effort involves the redevelopment of the old Hostess factory.
The building that formerly occupied the site was demolished earlier this year, making way for a large-scale, mixed-use development that would stretch between Lincoln and Grant avenues — from 26th Street to the alley immediately behind businesses on the south side of 25th Street — and would include space for condos, rental units and office buildings.
A developer has expressed interest in the site and Cooper said financing could close on the project (with construction commencing soon after) by the end of 2019 or early in 2020.
Other key projects associated with the CRA include the construction of new attached single-family and multi-family units, consolidation of parking and the redevelopment of portions of the municipal block.
“Everything is really oriented to support 25th Street,” Cooper said.
Project expenditures for the CRA could total as much as $236.2 million.
Redevelopment Areas like the Continental CRA, freeze the tax valuation for all taxable properties inside a section of land that’s been targeted for reinvestment.
For a specified time period and/or up to a certain dollar amount, future increases in property tax revenue are used in the redevelopment effort, a mechanism called Tax Increment Financing.
The TIF money is often offered to developers as an incentive to build and it can also be used for things like street and utility improvements, hazardous waste removal, property acquisition and the demolition of blighted buildings.
In Ogden, RDAs typically collect those tax increases from the city, the county and the school district.
As part of the Continental CRA plan, tax increment would be collected from the three entities at a rate of 90 percent for up to 22 years, or until certain dollar thresholds are met. The CRA asks for a maximum contribution of $7.1 million from the county, $7.8 million from the city and $20.1 million from the school district.
“We have decided there needs to be about $35 million worth of public incentive available,” Cooper said. “Without that, the investment is highly unlikely to take place. We don’t think, without public subsidy, anything will happen here in the near term.”
The 90 percent collection rate differs from how the city has operated past redevelopment districts and means instead of a total valuation freeze, the taxing entities will be able to collect up to 10 percent of any new property tax revenues generated by the development.
“All the entities, including the city, would get a little bit of a bump every year,” Cooper said.
With several non-taxable government buildings in the project area, the current valuation there is about $19 million. The city estimates about $163 million in added taxable valuation by the time the venture is complete.
The Continental CRA does not require a blight study and does not include eminent domain, which means any property acquisitions will occur under a “willing buyer, willing seller” scenario.
Ogden City Council Executive Director Janene Eller-Smith said the council will likely take action the the plan and budget for the project in January.