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Provo pursues win-win deal

$3.3 proposal would benefit west, east side

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PROVO — For years, frustrated neighbors on Provo's west side have wanted a successful but sometimes noisy and smelly business to go away.

Meanwhile, over on the east side, a drive to sell lots in the city's new business park stalled after a major company backed out of an incentive-laden deal.

Provo leaders now hope they can solve both problems by spending $3.3 million.

The City Council has authorized Mayor Lewis Billings to buy the property of gun-range manufacturer Action Target on the west side for $2.65 million and pay another $650,000 to relocate the company to the Mountain Vista Business Park on the east side.

Mountain Vista is a new name for an area known for decades as Ironton, the contaminated former site of a U.S. Steel plant vacant for 45 years.

Now cleaned up and ready for business, Ironton has been repackaged as Mountain Vista Business Park, and lots are being marketed to companies by real-estate experts hired by the city.

For that and other reasons, the prospect of a multimillion-dollar deal to move Action Target, 1281 W. 220 North, is considered a win-win-win proposition by neighbors, most city leaders and the company.

  • Residents in the Dixon neighborhood are holding their breath hoping the deal is finalized. They have tussled with the business for five years over issues such as noise, idling trucks and industrial paint fumes that made some neighbors feel ill, though the Utah Division of Environmental Quality gave the company a clean bill of health.

"Everybody is really, really happy," resident Judy Kelsch said. "It will be a really great thing for the neighborhood and the company to have them relocate."

The City Council voted 6-1 for the deal. City leaders believe the plan would not only jumpstart the business park and quell one neighborhood's concerns but allow the city to push 200 North through the Action Target property to Independence Avenue and create a physical buffer between the residential area and land zoned for light industrial use.

The city also is in negotiations to sell some of Action Target's land on the west side to Neighborhood Housing Services for $1 million. NHS would build homes in the area, further bolstering one of Provo's central Pioneer neighborhoods.

Additionally, the city would sell land to Jones Paint and Glass for more than $500,000.

One councilmember disapproved during a meeting earlier this month.

"The price is too high for me," Steve Turley said, "to purchase land for $2.6 million, then the relocation for $650,000 for a total price of $3.3 million and then only recover $1.5 million. While I respect some of the benefits that will come from it, the price is too high."

Councilmember Cindy Richards countered, saying the $1.8 million difference is being made up with federal HOME funds. The money comes from federal taxes paid by Provo residents earmarked to build affordable housing for low-income households through government partnerships with nonprofit organizations such as Neighborhood Housing Services.

"It's almost like getting a tax rebate," Richards said. "We get tax money back to work on something that the private market can't do by itself. I'm grateful our own tax dollars that we never would have had come back to our community will come back because we have an NHS.

"They'll be able to do a nice development that will strengthen the nearby mobile homes where some dear, dear people live."

  • Action Target would enjoy a number of incentives if Billings exercises the option he secured in January to buy the company's four acres on the west side. The option expires Sept. 15.

First, Action Target would pay Provo $1.1 million for 10 acres in the business park, or $110,000 per acre. City leaders consider that a bargain but a nice profit, too.

"We purchased the property for $3,000 an acre," said Dixon Holmes, assistant director of Economic Development for Provo. "We'll make our money back 33 times. Action Target also is raising the value of the rest of the Mountain Vista property by setting that standard."

The deal includes bigger incentives. For one, payment wouldn't be due for a decade, creating a 10-year, interest-free loan.

That is similar to the offer made to Little Giant Ladders two years ago about the time the company's owner, Hal Wing, had given Billings $25,000 in campaign contributions in 2005. Wing eventually turned down the deal in late 2005 in favor of a developed space elsewhere because Little Giant didn't have time to delay expansion while a new building was constructed.

Provo is also offering Action Target an option to buy another 10 acres at $145,000 per acre. That price could be reduced by a performance incentive — for every new job created by the company in Provo, the purchase price would be reduced by $3,500.

That incentive would be capped at $350,000, or 100 new jobs for the city. If the company met that target, the price of the second 10 acres would be the same as the first, $1.1 million.

Action Target president Kyle Bateman has told the city Action Target expects to double its revenues and sales force — from 135 employees — over the next five years. The company makes sophisticated gun ranges for the U.S. military and police departments around the country.

"This is a growth opportunity for us," Bateman said. "We've found that whenever we increase the capacity of the plant, we grow our business."

Another incentive would allow Action Target to stay where it is for 18 months after Provo buys its property, but the proposed deal calls for the company to open its Mountain Vista building by September 2009.

E-mail: twalch@desnews.com