Redevelopment Areas, or RDAs, freeze the tax valuation for all taxable properties inside a swath of land that’s been targeted by the city for reinvestment.
For a specified time period — 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.
The process has been criticized by some for depleting money that could be used for more immediate needs, particularly in the school district.
But Ogden officials say development in some areas would never occur without the tool. School district officials say while it can take some time, they ultimately benefit from the agreement.
Later this year, the city council will take a final vote on the proposed Adams Community Reinvestment Area — a 150-acre RDA in Ogden between 23rd and 28th streets from Washington Boulevard to Jefferson Avenue.
There’s about $124 million in potential construction projects associated with the Adams CRA and city officials say redeveloping the area — which includes remodeling decades-old, vacant buildings — will stimulate economic growth, create jobs and connect the downtown with neighborhoods in east-central Ogden.
Tax increment would be collected from the city and Weber County for 25 years at a maximum contribution of $2.5 million and $2.4 million, respectively. It would be collected from the Ogden School District for 20 years, with a maximum contribution of $5.7 million.
If the RDA board (which is made up of the seven members of the city council) approves the plan, it would be Ogden’s 17th open RDA.
During a recent city council work session, newly sworn in council member Angela Choberka said multiple constituents have expressed concern about the size, time span and number of RDAs in the city.
Brandon Cooper, Ogden’s deputy director of Community and Economic Development, said a recent analysis conducted by business management consultant Lewis Young Robertson and Burningham, Inc. found that the tax valuation of properties inside Ogden RDAs grew four times faster than other city properties.
“The hypothesis is that by including certain parcels in a project area and then targeting investment in that area, the value of those parcels will grow faster than they would through normal appreciation," Cooper said. “So at the end of that tax period the (city, county and school district) will receive more than they would've had they just allowed natural growth to occur.”
Tom Christopulos, director of the CED department, said the mechanism is essential in revitalizing older, depressed portions of Ogden. He said Ogden is the second oldest city (behind only Salt Lake City) in Utah and has areas where development “needs a push.” He said the projects that typically accompany an RDA must be significantly more valuable than what is currently in the area.
“Everybody assumes that the investment that goes into an RDA would occur, even if the RDA wasn't there,” he said. "I don't know how those assumptions are made. Now if you were to look at a place like Alpine, you can make the argument, fairly successfully, that the growth is going to happen. (Ogden) is a significantly different prospect.”
As for the school district, Business Administrator Zane Woolstenhulme said the district sees itself as a partner of the city and generally speaking, what's good for Ogden is good for the district.
“Ameliorating blight, encouraging economic development — ultimately that's going to work to our advantage,” he said. “We’re looking to draw families that want to come to Ogden and stay here. Most young families don’t want to come move into a neighborhood that’s blighted — some have no choice, I understand that and don’t want to come across as unsympathetic — but we’re going to be better off with (neighborhoods) that will attract families that are inclined to stick around.”
As a percentage of its overall tax base, Woolstenhulme said the OSD likely has more money tied up in RDAs than any other district in the state. But he believes the district and the school board (which grants final approval for district participation in RDAs) have been deliberate in evaluating the benefits of each proposal.
“In a lot of cases, we really have nothing to lose by participating,” he said. “From our standpoint, by partnering with the city and deferring the tax benefits, in the end we're going to end up with more than what we would have had otherwise. That's kind of the bottom line. It’s a deferred benefit. That's how we look at it.”
Woolstenhulme also said the district is pleased with the recent trend of identifying fixed dollar amount targets in the district’s RDA participation, rather than simply agreeing to divert tax increases for a set number of years.
“That's a good thing because it means it's not necessarily going to last 20 years," he said. “As soon as you hit the dollar target, the school district is done participating.”