Politics & Government
Lehi Council approves development with tax break incentive in split vote; Project to bring Whole Foods and high-density housing
In a March city council meeting that extended past 1 a.m., the Lehi City Council approved a substantial tax increment financing (TIF) agreement for a large development project in northeast Lehi. The development will be located near the current Xactware and Ancestry buildings, promising to bring a high-end mixed-use complex to the area just north of SR92.
Matt Swain from Perry Homes, the developer behind the project, presented the proposal to the council. Swain has partnered with the developer of ‘The Village’ in Riverton and ‘Station Park’ in Farmington.
“We’re very excited about this project. We felt this specific property needed to be something special,” Swain said to begin his presentation on March 18.
The proposed development covers 29 acres and includes 133,000 square feet of retail space, 285 residential units, 11 of which will be deed-restricted for low to moderate-income housing (per state law) and 900 parking stalls. The retail component will feature a mix of high-end restaurants, national retailers new to the Utah market and a major grocery anchor. Whole Foods has been named the site’s grocer.
“This will be a very high-end, class A office, grocery anchor, and shopping center that’s going to cater toward sit-down restaurants,” Swain said. “We want to bring one-of-a-kind retailers.”
Swain’s proposal suggested significant employment opportunities, with an estimated 900 to 1,000 workers employed in retail, restaurant and grocery positions. The proposal cites that wages will vary across roles, ranging from $16.30 to $39.11 per hour.
Lehi resident and Councilwoman Michelle Stallings expressed concerns about the financial arrangement. Lehi resident Rob Ludlow voiced his objections, saying, “You’ve already given Perry Homes $100 million worth of profit in the mining rights, you’ve given them maximum flexibility on density rights already, and now they’re asking for $8 million more in tax subsidy.”
Councilwoman Michelle Stallings echoed these concerns, questioning the value for Lehi residents. “This is giving up 100% of sales tax revenue for the first eight years. What are the residents of Lehi getting in return?” she asked.
“We’ve been raising taxes every two years. It’s been a struggle to get sidewalks for our residents, yet we’re willing to give up $8 million in tax revenue to help a private developer put in something to make a profit on,” continued Stallings.
In response to concerns raised by Stallings, Lehi Economic Development Director Marlin Eldred assured the council that the city would still benefit significantly in the long term. “The city will be receiving $20 million in franchise tax for gas and electric and then full sales tax benefit after the initial 15 years,” Eldred said.
Under the agreement, the developer will receive through the Redevelopment Agency (RDA) 100% of sales tax revenue for the first eight years of the project, followed by 80% for the next four years and 60% for the remaining three years or until a cap of $7,927,672 is reached.
Swain emphasized that the project would not be feasible without the TIF agreement. “This development isn’t possible without this. The margins on this are razor-thin. We won’t be able to bring the grocer without the city’s help. It simply won’t work,” he said.
The other Councilmembers and Mayor Mark Johnson expressed unanimous support for the agreement despite Stalling’s objections.
“I used to have the same thoughts [as Stallings] on Tax Increment Financing, but I’ve been a fan of it when used sparingly. To me, this is a tremendous opportunity. It’s exciting. I’m hopeful we can get this through,” said Councilman Chris Condie.
Councilwoman Heather Newall also expressed her support of the project.
“A project of this caliber is just not going to happen without some kind of RDA. Residents ask me all the time, why don’t we have fine dining? When are you going to bring those in? I think the residents are going to be really excited about this… It’s going to be a great project,” said Newall.
The project will likely take 24 months to build out, but is now one step closer to becoming a reality after a 3-1 vote, with Stallings dissenting. The proposal also stated that Alpine School District and Utah County, the other taxing entities with jurisdiction for the property, were approached to participate in the tax agreement. Both declined.
The project will now go through the development process with Lehi City’s tax increment financing backing.
