Property taxes and assessed valuations for businesses operating in Salt Lake City's central business district are competitive with those of downtown areas in other cities in Utah and other Western states, according to a new study commissioned by the Downtown Alliance.
Robert Farrington Jr., executive director of the alliance, a non-profit business/government economic development organization, said the study by Bonneville Research was commissioned to determine where tax dollars are generated in the central business district, who receives funding from those taxes, how the money is spent and whether those taxes are in line with similar areas.Prior to the study, said Farrington, there was a presumption that tax assessments on downtown businesses were higher than other business areas in Salt Lake County and other cities in the state and region. "This study shows downtown is not out of kilter with those areas," he said.
In its study, Bonneville Research concluded that any effort to increase the tax values of downtown properties should focus on five blocks and six taxpayers who represent nearly half of the property values in the central business district. The property owners are:
1. Block 75, ZCMI Center
2. Block 76, Crossroads Mall, Marriott Hotel
3. Block 79, The Delta Center
4. Block 69, First Interstate Bank, Kearns Building
5. Block 57, One Utah Center
The study lists the six major property taxpayers with major holdings in the downtown area as:
- US WEST
- Utah Power
- AT&T
- Questar
- Boyer Block 57 (One Utah Center)
- Beneficial Properties (ZCMI Center and other Zions Securities properties)
The study further states that efforts to increase retail sales downtown should focus on finance, insurance, clothing, hotel and automobile sales, since more than 59 percent of all of the city's motor vehicle, finance, insurance, real estate, hotel/motel and business services sales occur downtown.
A prime beneficiary of the taxes paid by downtown businesses, according to the study, is the Redevelopment Agency of Salt Lake City. Bonneville found that RDA receives - and spends - $16 million a year from central business district taxes.
In its report to the Downtown Alliance, Bonneville Research makes two recommendations for future actions based on its findings:
1. Conduct regional competitive tax rate analyses for the specific businesses that are most important to downtown Salt Lake City. This would comprise a detailed analysis of tax rates on real estate, equipment, personal property, sales and inventory to determine whether downtown taxes are competitive with other cities and suburban areas in Salt Lake County.
2. Major downtown property owners should seek representation on the city's RDA advisory committee. The committee currently consists of eight members and one vacancy. They are appointed by RDA directors - the Salt Lake City Council.
Farrington said the Downtown Alliance doesn't necessarily agree with Bonneville Research's conclusions on which businesses should be targeted for higher property tax valuations.
"That's their recommendation. If you were strictly looking at how you got the biggest bang for the buck, I suppose that is a route you would take, but we were more interested in the statistical analysis as ammunition for recruiting certain types of businesses, such as the automobile businesses located in the south part of downtown."
On the recommendation that the largest downtown property owners seek representation on the RDA advisory committee, Farrington noted that the RDA believes its board is representative of downtown interests, but that he tends to agree with Bonneville that it is not and that major downtown property owners should join the group.