A Salt Lake developer hoping to build a 350,000-square-foot retail center anchored by a ShopKo store in Sugar House cleared two major hurdles this week to an October 1990 completion date for the project.
Clark Financial dropped a request Tuesday afternoon for a $1.75 million subsidy from the city, breathing new life into its plan to bring the 17-acre retail center to Sugar House in southeast Salt Lake City.And following a nearly six-hour meeting Tuesday night, the City Council unanimously approved a zoning change to pave the way for a possible Nov. 15 groundbreaking for the project, billed as the economic savior for Sugar House.
The project could produce 500 full- and part-time jobs.
When Clark backed down from its proposed subsidy, to be funded by Salt Lake taxpayers paying sales tax, it reduced Clark's proposed city contribution toward the $19 million project to $4.2 million.
The proposal had called for a $1.75 million investment in the ShopKo project by the city issuing lease revenue bonds to be repaid with increased sales tax revenue.
"It makes the project leap forward in terms of feasibility because that was a major stumbling block," said Salt Lake Mayor Palmer DePaulis.
In a briefing before the City Council Tuesday afternoon, Clark Development director James McGuire said the subsidy was a "bold proposal but nonetheless necessary."
But a memo prepared by City Treasurer Buzz Hunt calculated that the subsidy would cost $4.8 million over 20 years, the life of the bond to finance the subsidy. The memo also questioned the ability of the ShopKo development to generate enough tax revenue to pay off the bonds.
Clark claimed the project would generate $2.7 million in sales tax revenue over 20 years while the city estimated the development would create only $1.9 million in 20 years.
Clark, however, retreated from the request during the council briefing, saying site costs for the project have declined below initial estimates, eliminating the need for the $1.75 million subsidy.
While Clark and the city have agreed to scuttle the sales tax subsidy, the development company is still asking the city and its Redevelopment Agency for $4.23 million in assistance.
The RDA, whose board of directors is the City Council, has already tentatively approved an $830,000 tax increment subsidy for Clark.
The developer also wants the city to convert a development loan to a grant worth $900,000, and contribute 245,000 square feet of city-owned alleys and streets valued at $2.5 million to the 17-acre project.
Setting the finance issue aside, the council approved broadening zoning regulations in the 17-acre project area to accommodate development. The zoning change will go into effect when the first building permit for the project is filed.
The council, however, left room for the city to negotiate with Clark over the issue of east-west traffic flow in the development area.