LEHI — City officials think they have found a way to recoup money spent on road, sewer and water line improvements in the Thanksgiving Point area.
Earlier this month the City Council approved a new public assembly ticket tax that targets the new Stadium 8-plex theater scheduled to open on Memorial Day. The tax is specific to the leased theater operation and will affect no other Thanksgiving Point-owned entity, such as the North American Museum of Ancient Life (which is next door to the theater) or events (including the Utah County Fair, which is held at Thanksgiving Point).
The ordinance imposing the tax also exempts the city-sponsored Lehi Roundup rodeo.
"It's very narrow. It is specific for that particular project," said Mayor Ken Greenwood, who applauded when the theater project was first announced. He pointed to the sales tax revenue it would generate and the convenience for city residents. Greenwood, who said he still supports the project, maintains the tax is designed to benefit the theater development.
The bottom line though, is moviegoers will be paying between 50 cents and $1 more for tickets and theater manager Tony Rudman doesn't see the tax as a benefit.
"We've never had such a tax," said Rudman, referring to the 100 or so screens operated in several western states by Westates Theatres, which will operate the Stadium complex.
Greenwood said the tax will be collected by the city and will be used to repay special improvement district debt, freeing the theater developer from having to use revenue raised by selling concessions to pay those bills.
"It's a weird thing. I know it sounds kind of strange," Greenwood said. "And it only stays in place if they (Thanksgiving Point officials) agree to it."
Greenwood said the situation is somewhat unique in that the property owner, Thanksgiving Point, came to the city asking for the tax in behalf of the theater company.
And that is the rub for Rudman.
"We were told because Thanksgiving Point is a resort, Lehi City was imposing a resort tax," Rudman said. "I went to no one. I'd just as soon not pay any taxes. It raises the price of our tickets."
Ed Collins, the city administrator, said the city is trying to recover some of the money spent providing water and sewer lines and road improvements to the new $3.5 million facility which is included in a special service district created by the city.
"There's been a tremendous amount of money spent on roads and water lines," Collins said. "The amount of tax (collected) will be based on the amount of cost recovery involved."
David Church, legal counsel for the Utah League of Cities and Towns, said he has not seen the ordinance but is familiar with Utah law giving that option to the cities.
Utah Code allows ticket taxes on public assembly facilities which are wholly or partially funded by public moneys.
Thanksgiving Point general manager Greg Gagon did not return phone calls about the tax.